Changing cellular network paradigms are driving a shift in the architecture of base stations from traditional macrocells to distributed base stations and toward the growing use of small cell base stations.
The primary drivers for this transition are the increasing data traffic demand and the OPEX and CAPEX cost savings inherent in deploying small cell equipment.
Operators will initially deploy small cell equipment as in fills on the pico and microcell layers, but will quickly transition to deploying them as a fundamental part of a network rollout. In fact, the number of LTE small cells sold (127,000) will surpass the number of LTE macrocells, forecast at 113,000, as early as 2014. However, LTE base station revenues will continue to be dominated by macro base station revenue with small cell revenue of $1.09 billion representing only 5.2% of the total revenue of $20.86 billion in 2014 and growing to $4.44 billion or 23.9% of the total $18.60 billion LTE base station market by 2016.
Equipment manufacturers have been quick to respond to this shift in RAN architecture. Ericsson acquired BelAir networks as part of its “HetNet” initiative, Nokia Siemens Networks announced Flexi Zone, Alcatel-Lucent continues to expand its lightRadio™ portfolio and Huawei has announced its AtomCell products.
Nick Marshall, principal analyst, networks, comments, “This mobile broadband-driven data storm is stretching traditional macrocell network capacity to the limit and driving the move to heterogeneous networks.”
Likewise, semiconductor suppliers are also positioning themselves to participate in this market with TI, Freescale, Cavium, Mindspeed, and DesignArt among the manufacturers offering new “base station-on-a-chip” SoCs.
“These base station baseband SoCs are among the most complex ICs on the market today and raise the bar in terms of complexity,” says Marshall.
ABI Research’s new report, “The LTE Base Station Market,” examines the ecosystem and outlook for LTE base stations. The report looks at base station topology and the uptake of small cells and remote radio heads (RRHs) as elements of the distributed base station. The report also examines the merchant semiconductor baseband processor suppliers for these base stations.
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