NLOS Scales for Small Cell Deployments
Posted on Oct 04, 2012 by Frank Rayal
In July, ABI Research forecasted that the number of outdoor small cells will reach 1 million this year, surpassing the macrocell market. Outdoor small cells will reach 9.4 million in 2017. But the question for me, as for many of us in the industry, is how will millions of new small cell base stations be backhauled?
I have often said that NLOS backhaul is well suited for ‘scalable’ small cell deployments. Scalability means the ability to roll out large numbers of small cells in a timely and cost effective manner. Here, I will look into the financial aspects of scalability using my financial model for small cell deployments as described in my whitepaper “The Small Cell Wireless Backhaul Business Case” where I compare the financial cost of different types of wireless backhaul solutions.
In my opinion, financial models would quickly identify what does not make sense, but they often don’t say how well something will work (recall the old adage: garbage in, garbage out). One way to improve confidence in the results is to implement a stochastic approach to financial analysis using Monte Carlo methods. Therefore, an input such as spectrum pricing, pole attachments fees and other expenses is defined by a probability distribution function with parameters that mirror market data.
Using this approach, we can see how well NLOS wireless backhaul compares to LOS solutions (e.g. 10 – 42 GHz microwave and 60 GHz millimeter wave solutions). For a network of 3,000 small cell base stations NLOS wireless backhaul is more cost effective than LOS solutions 99.7% of the time and on average by 21% as shown below.
Note that since spectrum for NLOS is licensed as a block and is amortized over the total number of NLOS links, the amount of savings is directly related to the number of deployed small cells. Greater percentage of savings is achieved with larger number of deployed small cells. This is evident in Figure 2 that shows the cost of a single LOS and NLOS backhaul links. While the cost of LOS link remains constant (hence, the total cost linearly increases with number of deployed small cells), the cost of a single NLOS link decreases as the number of small cells increases because the cost of spectrum license is divided by larger number of links.
Figure 2 Wireless backhaul cost on per link basis.
So at when does it make sense to deploy NLOS wireless backhaul as opposed to other solutions? Figure 3 provides the answer: it takes 1600 small cells to achieve financial breakeven between NLOS wireless backhaul and LOS solutions. This is a rather small number considering the millions of forecasted small cell to be deployed in the next 5 years.
The story the numbers tell is loud and clear. The cost of small cell backhaul is a major expenditure: NLOS is uniquely positioned among other types of wireless backhaul solution to deliver the most scalable solution for small cell deployments.
Figure 3 Number of Deployed Small Cell Base Stations Required to Achieve Financial Breakeven between NLOS and LOS Solutions.
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