Sprint Relies on 2.5 GHz and Small Cells for a Competitive Edge

There are tangible signs that mobile telcos around the world are starting to incorporate small cells into their network strategy. Nokia has reported a significant uptick in small cell shipments. At a recent Nokia analyst event in Vietnam, Nokia reported that Taiwanese mobile telcos had purchased thousands of small cells. Furthermore, a number of the Chinese mobile telcos are purchasing Nokia’s small cell solutions. Even though Chinese mobile telcos have deployed 2.5 million macrocells to help boost 4G and, to a lesser extent, 3G coverage, they are now switching a proportion of their investments to small cell. In 2016, small cell investments accounted for 5% of radio access network (RAN) capital expenditure (CAPEX). In 2017, it is estimated that 20% of China Mobile's annual cell-site upgrades/deployments are small cells, which is equivalent to 100,000 units.

While Europe is facing challenges rolling out small cells due to zoning laws, Asia and the U.S. are demonstrating the value of deploying small cells. All the major mobile telcos in the U.S. are interested in small cells, but Sprint, in particular, has taken them to heart. 

Sprint has some unique spectrum real estate, 160 MHz of 2.5 GHz, which it inherited from its acquisition of the worldwide interoperability for microwave access (WIMAX) telco Clearwire. Sprint is keen to roll out 2.5 GHz on a significant number of cell sites, especially on small cells, which are supplied in part by Nokia and Airspan. Sprint is in the process of rolling out three component carrier aggregation (3CCA). 3CCA is in place in Chicago, Dallas, Kansas City, and San Francisco. Much of its existing stock of cell-sites are 2CCA-capable. Sprint has not given an explicit date, but it is likely to start rolling out 4CCA from mid to late 2018. In U.S. urban cities like Manhattan, the operator has a high dependence on small cells.

While Sprint does deploy indoor solutions (such as the Airspan “Magic Box,” which can cover up to 30,000 sq. ft. of indoor space) where it is cost-effective to do so, the operator can use its small cells to essentially “blast” the signal into the insides of large buildings using these outdoor, local proximity small cells, which means it does not have to intensively rely on indoor solutions to give occupants a viable link budget for high-speed data traffic.

Sprint will use fiber-optic cables to backhaul traffic where the links are available, but if there is no viable fiber-optic cable in place, Sprint will relay traffic to a macro basestation using a time division duplex (TDD) channel. This helps to reduce the total cost of operations over the lifetime of the small cell site. 

Proof that Sprint’s 2.5 GHz and small cell strategy is working is the remarkable fact that 50% of Sprint traffic is being carried on 2.5 GHz spectrum. This takes the strain off of its lower frequency assets so that they can primarily focus on wide area coverage, as well as high mobility users (cars, trucks, etc.).

5G is looming fast. Korea will demo some prototype 5G networks and even a 5G handset (Samsung claims). In 2020, Japan will take it to the next level for its Tokyo Olympics. However, the U.S. carriers are keen to roll out fixed 5G services in 2019. Small cells will be an essential 5G network feature for mobile, but mobile telcos will also be interested in deploying 5G on their macrocell sites. Sprint has been hinting that its 2.5 GHz spectrum will be invaluable for its 5G plans as it has 160 MHz of the spectrum and also has attractive wide area coverage characteristics.

Sprint may be in fourth place in the U.S. market but its small cell and 2.5 GHz strategy could well enable the operator boost its ultrafast broadband competitiveness versus the other U.S. carriers. The next three to five years could be very interesting.