The global small cell 5G network market size is estimated to be worth around USD 28.5 billion by 2027, advancing at a substantial CAGR of 77.6% during the forecast period from 2020 to 2027. The ongoing advancements in 5G technology that have become more frequent with the passage of time are primarily responsible for the promising development of this industry. Small cell 5G networks allude to the base stations that serve a small segment of a macro site, being widely deployed in densely-populated areas such as railway stations, malls, stadiums, and any other location that has a high data capacity requirement. As the development of 5G infrastructure assumes a high significance in the telecom industry, the need to provide consumers with high-speed, uninterrupted data connectivity in various settings such as industrial, healthcare, and entertainment means that small cell networks has become blatantly obvious.
A better understanding of small cell 5G networks would be a cross between a Wi-Fi router and a macrocell (a base station that sends and receives signals through antennas and towers, offering a larger coverage) for cellular networks. Small cells have a compact size and consume less power, which serves to highlight their importance in metropolitan regions and cities.
Key Industry Insights & Findings from the report:
- Asia Pacific captured the largest market share of more than 30% in 2019 and is estimated to grow at a CAGR of 72.8% from 2020 to 2027. The growth is attributed to the rapid investments in deploying 5G infrastructure by major telecom operators across key countries such as China, Japan, and South Korea.
- The robust deployment of small cell 5G networks in homes and offices to leverage enhanced bandwidth capacity is expected to lead to the indoor segment growth from 2020 to 2027.
- With huge investments by key players to deploy cloud-based RAN to reduce the overall infrastructure costs, the virtualized network architecture segment is anticipated to see massive growth over the forecast period.
- With the rapidly growing deployment across several mass gathering places such as stadiums, malls, and airports, the commercial segment is expected to capture the largest market share from 2020 to 2027.
- Key market players such as Ericsson and Nokia Corporation are actively focused on developing new 5G-based small cells to strengthen their product portfolios and their market presence across several geographies.
Small cell 5G network market growth & trends
The small cell 5G network industry has been classified mainly on the basis of component infrastructure, which includes femtocells (offer output power of 0.001-0.25 W, with a cell radius of 0.010-0.1 Km), picocells (offer output power of 0.25-1 W, with a cell radius of 0.1-0.2 Km), and microcells (offer output power of 1-10 W, with a cell radius of 0.2-2 Km). Femtocells have witnessed high demand in recent years, as they are extremely suitable in enclosed spaces such as homes, hospitals, and offices. Femtocells are a very economical option for small businesses to improve indoor coverage, without the need of an operator, and thus their demand has remained steady.
Microcells are very easy to install and can be affixed to any street furniture, notably lampposts and sides of buildings, and are able to serve a large user base. The continued development of various public places such as shopping malls and stadiums, wherein the availability of fast and efficient networks has become a necessity, has helped maintain the development of the 5G small cell industry. For example, Ericsson had a partnership with soccer club FC Barcelona, where they offered their 5G services at the renowned Camp Nou, the home of the Spanish club.
The small cell 5G network can be deployed either indoors or outdoors. The continued growth in the number of offices and small establishments has meant that there has been a steady demand for the installation of 5G small cells in the indoor settings.
According to Ericsson, 37% of the macro traffic in a dense urban setting was served for indoor users, which points towards the importance of deployment of small cells to address the indoor demographic. On the other hand, the rapid development of smart cities has meant that outdoor small cells have an important role to play in the development of the industry. Aspects such as Internet of Things, smart transportation, and intelligent traffic management has necessitated the availability of high-speed data capacity.
Need for advanced telecom infrastructure is driving the market
Small cell 5G networks are being set up and offered by a number of companies, primarily to cater to the needs of the student and professional demographics. The majority of the users of 5G are present indoors, either in offices, restaurants and pubs, or homes. According to a recent report by Gartner, 80% of the overall data consumption is accounted by indoor 5G coverage. Furthermore, the majority of the industry growth is expected to be driven by private enterprises, as per a study by Rethink RAN Research. According to this, the number of 5G small cell deployments were 1,945 in 2020, and the number is expected to rise substantially to 1.56 million by 2027.
5G small cell networks are expected to offer a lot of scope for enterprises, as they offer high connectivity scope due to eMBB (enhanced Mobile Broadband) and mMTC (massive Machine Type Communications) capabilities. Furthermore, enterprises are continuously evolving in terms of operational area and their overall site size, which is perfect for any additional deployment of small cells. Another point that works in favor for small cell networks is the widespread use of Internet, the high volume of data consumption, and the still-advancing smartphone adoption. According to the Ericsson Mobility Report released in November 2021, the global consumption of mobile data is set to rise from 65 billion gigabyte in 2021 to 288 billion gigabyte by 2027; additionally, 5G is expected to be responsible for 62% of the traffic by 2027. All these factors are expected to bode well for the industry growth.