Telecom Network Report Edition 4 2017 - A Network Revolution

  • ID: 4298707
  • Report
  • Region: Global
  • 253 Pages
  • StatPlan Energy Ltd
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HetNet and Densification, Towers & Small Cells, Network Virtualisation A time of transition 1G to 5G Hardware to Software

We are in the midst of a telecoms revolution. The technology has moved so fast that it is always approaching obsolescence, and never more so than now as the innovation cycles accelerate. 3G increased the demands on the systems and 4G escalated the volume of data traffic beyond anyone’s expectations, changing usage patterns. 5G will drive demand even further, and will require new e xpanded capabilities. At the same time, earnings are under pressure as ARPU declines.  The operators have to grow capabilities and do it more cheaply. The first solution is the HetNet, densifying the networks and providing greater capacity for data traffic, with better Quality of Service for users inside buildings. To deliver this from the core to the Modern telecoms networks contain an ever-increasing variety of proprietary hardware. The second solution is the key enabling technology of Network Virtualisation (NV). NV can deliver network functionality via software running on industry-standard commercial off-the-shelf (COTS) hardware. Virtual networks are decoupled from the underlying network hardware. This is already happening in production networks across the world. It is enabling 4G and making the 5G revolution possible. 

1. Telecoms Network Technology And Deployments - The HETNET

Network technology is evolving rapidly  to meet exponential new demands. The focus is shifting from coverage to capacity, dri ven by the rise in data
traffic. The answer is the HetNet/Heterogeneous network.  Past networks were based almost entirely on macro cellular base sta tions mounted on
towers, rooftops and poles. They were designed for volumes of voice mail which were small by today’s standards. Data traffic has grown exponentially
and is set to escalate by leaps and bounds, driven by the Internet, videos, and a plethora of 3G and 4G mobile devices.

The HetNet is providing the solution; a network which combines all types of base station, each designed for a different purpose; macros on towers and rooftops, micro, metro, pico, DAS and Wi-Fi both inside buildings and outside. These issues are discussed and analysed in this report. 

2. Rising Volume Of Data Traffic

Crucial to the technology revolution is the increased sophistication of 4G and LTE mobile devices and the explosion of data t raffic. Network archi- tecture is being examined and redeveloped to meet this pressing need. Data traffic is charted, analysed by device and project ed to 2020.  This is straining not only network capacity but the smart phone devices as well. This has been dramatically underlined in September 2016 with the crisis which quickly brought about the demise of Samsung’s flagship high-end smartphone, the Galaxy Note 7 when it repeatedly caught fire. The electronics industry faces an increasing amount of power being shrunk into vanishingly small circuits. These circuits get hot and, sometimes, catch fire.

3. Technology Penetration - From 1G to 5G

A new mobile generation has appeared approximately every 10 years since the first 1G system, Nordic Mobile Telephone, was introduced in 1982. The first 2G system was commercially deployed in 1992, and the 3G system appeared in 2001. 4G systems fully compliant were fi rst standardised in 2012. 5G is slowly making the transition from concept to network implementation. Network operators are already scheduling 5G trials  and test beds. 

4. Network Virtualisation - NV

Modern telecoms networks contain an ever-increasing variety of proprietary hardware. The launch of new services often demands network reconfiguration and on-site installation of new equipment which in turn requires additional floor space, power, and trained maintenance staff. The innovation cycles accelerate and require greater flexibility and dynamism than hardware-based appliances allow. Hard-wired networks with single functions boxes are tedious to maintain, slow to evolve, and prevent service providers from offering dynamic services. 

Key enabling technologies for this vision include SDN (Software Defined Networking) and NFV (Network Functions Virtualisation). Virtual networks are decoupled from the underlying network hardware. NFV can deliver network functionality via software running on industry-standard commercial off-the-shelf (COTS) hardware. This is already happening in production networks across the world and is rapidly gaining ground i n the telecom networks. Virtualistion can be applied at many layers using the OSI model. 

The technology of NV is outlined, together with its benefits. The current status of NV and a brief market survey is included. 

5. Macro BTS - Network Distribution Of Ground Based Towers, Rooftop Towers, DAS And Street Poles

Macro base stations are the backbone of the networks providing the large area coverage to create national networks. But the networks must devel- op more granular delivery, both in coverage and capacity. We have constructed a database of macro base stations for every country, starting from the launch of mobile services in the 1980s. In an electricity network replacement happens when equipment is past its design l ife and risks failure, and the replacement may also be an up-grade. From 1G to 2G, 3G and 4G and LTE the technology of the networks must be up-dated to new generations of technology at more frequent intervals, both is hardware and software. A regional analysis of GBTs (ground based t owers) and RTTs (rooftop towers) is provided.     

6. Backhaul

Back haul is the interface between the network core and the base station antennas and is a critical component for both macro BTS and small cell BTS. The introduction of small cells in the radio access network as a complement to the macro cell layer will introduce many new s ites and backhaul challenges.

Sites are expensive, installation is costly and has delayed the introduction of small cell BTS, but it is not insurmountable. The role and basics of backhaul are outlined. Backhaul typically makes up 25%-30% of the total capex cost of a macro cell RAN (radio access network) and a similar proportion of total cost for a small cell BTS. 

7. Base Transceiver  Stations (BTS) For Macro Cells And Small Cells

The total market is surveyed, macro and micro. Forecasts of base station capex, analysed by macro site additions, macro site upgrades and replacements, and new small cell sites with annual expenditure from 2015 to 2020. Total mobile traffic is analysed by cell site  types: macro cell, inbuilding small cell, outdoor small cell, Wi-Fi hotspots, residential femtocell, DAS/RRH.
  
8. Mobile Market Review

The structure, current status and technology development of the major countries are reviewed, together with commentary on the leading players in
 
Telecom Network Report Ed4 2017 HetNet and Densification, Towers & Small Cell Sites Network Virtualisation, MNOs, MVNOs and Sub-brands each country. The development of telecoms communications and its technology is reviewed in the countries where it was developed.   

9. Installed Base Of Macro Cell Sites 

This chapter is concerned with macro cell GBTs, RTTs and street pole base stations, and does not include small cell base stat ions. The installed  base of macro towers and poles is forecast annually from 2015 to 2020 for the world, for regions and is analysed by 213 count ries. 

10. Expenditure On Macro Cell Sites

The market for construction of new macro base stations (BTS), ground-based, rooftop and street poles, upgrades and replacement of aged assets  is estimated and forecast in nominal $ from 2015 to 2020, for the world, for regions and is analysed by 213 countries. Market  commentary is provide by regions and major countries.

11. Small Cells - Compact Base Stations (C-BTS) - Developments And Installed Base

The steady growth of the macro cellular infrastructure does not fully reflect the real rate of expansion of the networks. With mobile data traffic expected to double annually, small cell base stations are set to play an important role in expanding the capacity of wireless networks. Small cells provide flexibility and increased QoS capabilities. Past development of small cells is analysed to help predict the future path.  Shipments are analysed in units by cell type. The cost components of a small cell installation are analysed.

12. Expenditures On Small Cell Sites

Global expenditure on installing small cells with related costs and backhaul is estimated for 2015 and projected annually to 2020 for regions and 33 countries. Capex is analysed by residential/non-residential and by cell type.

13. Manufacturers Of Steel Lattice Communications Towers And Monopoles

Global production capacity and market shares are tabled for the top 44 producers of steel lattice comms towers and monopoles,  together with total country production capacity and profiles of the leading suppliers.

14. Backhaul Vendors

Backhaul vendors can be divided into two distinct groups. The macro backhaul vendors are now in a mature industrial ecosystem, but typically for a new technology the small cell vendors are in the earliest stage of development, consisting of a large number of small compa nies and start-ups, many of which will fail or will be acquired by larger rivals, before coalescing into a mature ecosystem. The top 48 companies  are listed by macro/small cell backhaul market participation.

12. Infrastructure Sharing

Tower sharing allows operators to cut down on capital expenditure. Infrastructure cost for operators is estimated to decline by 16% to 20%. Running and maintenance of tower infrastructure, form a significant portion of operator Opex. Divesting responsibility for infrastructure unlocks value.  Site and/or tower sharing is the most common form of network sharing, but full network sharing is gaining traction. The various forms of infrastructure sharing are outlined and the towerco market is analysed by country. A breakdown of tower construction cost by component is given. 

13. The Towerco Market

Infrastructure and network sharing, either between operators or via independent tower owners, is growing rapidly but has a di stinct regional pattern. MNOs share assets with jointly-owned infracos in Europe, Japan and many other regions. Independent towercos started in the United States and are also prevalent in India, in China since 2015, in Southeast Asia and are making headway rapidly in Sub-Saharan Africa. The incidence of sharing is given by regions and major countries with total numbers of macro towers and the numbers owned by towercos. Detail ed market profilesare given for regions and leading countries. 

15. Energy Costs And Sources

Energy accounts for 30% of the network operating costs of an MNO. 90% of sites have diesel base generators where towers are off-grid or as  standby to grid supply when grid-connected. For cost and environmental reasons there is a growing trend towards renewables systems, mainly solar PV or hybrid systems of solar PV and wind power.

16. Glossary, Definitions And Explanations

A 37 page glossary is provided, which includes explanations and diagrams of terms and concepts commonly used in the telecoms sector. Acronyms are the bane of the IT and CT sectors and they are proliferating all the time. This glossary is comprehensive but by no means complete

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EXECUTIVE SUMMARY
Evolution of the technology generations 1G to 5G
Spectrum refarming
Introduction to virtualisation in all industries
Network virtualisation
MVNO Mobile Virtual Network Operator and Sub-Brands
Backhaul and Fronthaul
Development of the market
Macro cell sites and base stations
Tower ownership
The HetNet, Densification and small cells

1. TELECOMS NETWORK TECHNOLOGY AND DEPLOYMENTS
Network technology
HetNet/Heterogeneous Network
Virtualisation
Cells
Types of base station
Macro cells
Small cells
Microcells
Metrocells
Picocells
Femtocells
DAS
Small cells or DAS?
Wi-Fi

2. RISING VOLUME OF DATA TRAFFIC

3. TECHNOLOGY PENETRATION - 1G to 5G
Timeline of mobile development
Unique mobile subscribers
2G
3G
Smartphones - 3G & 4G
4G LTE
5G
5G trials
5G network deployments
Coverage
Spectrum refarming

4. MIGRATION TO 4G IN CHINA, INDIA AND PAKISTAN
China
India
Pakistan

5. TRADITIONAL NETWORK ARCHITECTURE, BACKHAUL AND FRONTHAUL
Backhaul
Macro and micro backhaul
Front haul

6. VIRTUALISATION
Introduction to virtualisation in all industries
Types of virtualisation
The development of virtualisation
The benefits of virtualisation
The virtualisation market
Server virtualisation
Desktop virtualisation
Application virtualisation

7. NETWORK VIRTUALISATION
NV Network Function Virtualisation
SDN Software-defined Networking
The OSI model of data communications
V-RAN
Service providers and enterprise networks
MNOs and the virtual network
The NV market
MVNO Mobile Virtual Network Operator
MVNO Business models
MVNE - Mobile Virtual Network Enabler
MVNA Mobile Virtual Network Aggregator
Sub-brands
MVNO and sub-brand segments

8. CENTRALISED AND DISTRIBUTED BASEBAND

9. MOBILE MARKET REVIEW
The development of mobile telephony in the United States
The emergence of new telecommunications players
Cable
The Internet
Cellular and Wireless
Europe
The development of mobile telephony in Europe
France
Germany
Italy
Poland
Spain
Sweden
United Kingdom
CIS
Russia
Ukraine
The development of mobile telephony in the CIS
MENA
Saudi Arabia
North Africa
Egypt
Algeria
Morocco
Tunisia
Sub-Saharan Africa
EAC - East African Community
Ethiopia
Kenya
Uganda
ECCAS, Economic Community of Central African States
DR Congo
ECOWAS Economic Community of West African States
Cote d’Ivoire
Ghana
Nigeria
Senegal
SADC Southern African Development Community
South Africa
Mozambique
Tanzania
Asia Pacific
China
India
Japan
The development of mobile telephony in Japan
Indonesia
Malaysia
Myanmar
Thailand
Vietnam
Central and South America
Brazil
Mexico
Argentina

10. NETWORK DISTRIBUTION OF GROUND BASED TOWERS, ROOFTOPS, DAS AND STREET POLES

11. INSTALLED BASE OF MACRO CELL SITES

12. EXPENDITURE ON MACRO CELL SITES
Prices of tower base stations
NORTH AMERICA
EUROPE
France
Germany
Italy
Poland
Spain
Sweden
United Kingdom
Revenue of tower construction
CIS
Russia
Ukraine
MENA
Saudi Arabia
North Africa
Egypt
Algeria
Sub-Saharan Africa
Tower sharing
EAC - East African Community
Kenya
Uganda
ECCAS, Economic Community of Central African States
DR Congo
ECOWAS Economic Community of West African States
Cote d’Ivoire
Ghana
Nigeria
Senegal
SADC Southern African Development Community
South Africa
Mozambique
Tanzania
Asia Pacific
China
India
Japan
Indonesia
Malaysia
Myanmar
Thailand
Vietnam
Central and South America
Brazil
Mexico
Argentina

13. THE HETNET, DENSIFICATION AND SMALL CELLS - DEVELOPMENTS AND INSTALLED BASE
Densification
Why we need to densify
Types of base station
Introduction
The early developments of small cells
Why were these early micro/picocellular 2G base stations not successful?
The penetration of small cell base stations
Market segments
Small cell shipments to 2015
Cost of deployment of small cells

14. BASE TRANSCEIVER STATIONS (BTS) FOR MACRO CELLS AND SMALL CELLS

15. EXPENDITURES ON SMALL CELL SITES

16. MANUFACTURERS OF LATTICE TOWERS AND MONOPOLES
Chinese manufacturers
Other Asian manufacturers
North American manufacturers
Brazil
Turkey

17. BACKHAUL VENDORS

18. INFRASTRUCTURE SHARING
Tower infrastructure companies
The economics of telcos and towercos
Reduced time-to-market
The towerco business model

19. ENERGY COSTS AND SOURCES

20. THE TOWERCO MARKET
Tower infrastructure companies
United States
Europe
CIS
Asia Pacific
India
Indonesia
China
Japan
MENA
Sub-Saharan Africa
South America

20. CRITERIA FOR MARKET EVALUATION
Criteria for MNO market evaluation - numbers of subscribers, ARPU, ARPA

21. NETWORK GLOSSARY, DEFINITIONS AND EXPLANATIONS
NV Network Virtualisation

METHODOLOGY

Figures
Figure 1: HetNets   
Figure 2: Types of macro cell ground based towers (GBT)   
Figure 3: Street poles   
Figure 4: Macro cell rooftop towers (RTT)   
Figure 5: Microcell base station   
Figure 6: Metrocell base station   
Figure 7: Picocell base station   
Figure 8: Some examples of femtocells offered by member companies of the Femto Form   
Figure 9: Mobile network coverage and evolving technologies   
Figure 10: 4G LTE penetration, top 20 countries, Q4 2015   
Figure 11: US total data consumption by device type in petabytes/month, 2014 to 2020   
Figure 12: Data traffic from wireless and mobile devices 2010 to 2020   
Figure 13: 2G o 4G download rates   
Figure 14: Global mobile connections by technology, 2010 to 2020   
Figure 15: Coverage of 4G in 2016,   
Figure 16: The difference in take-up of 3g and 4G in China   
Figure 17: The Backhaul Network in the MNO Architecture   
Figure 18: Traditional and virtual architecture   
Figure 19: Perceived attributes of NV solutions   
Figure 20: NV Vendors considered among NV end users   
Figure 21: Regional distribution of MVNOs, December 2015   
Figure 22: The 10 countries with the largest number of MVNOs as of June 2015, were:   
Figure 23: Fully distributed and mixed centralised and distributed baseband deployments   
Figure 24: The countries of the East Africa Community   
Figure 25: The countries of the Economic Community of Central African States   
Figure 26: The countries of the Economic Community of West African States   
Figure 27: The countries of the Southern African Development Community   
Figure 28: Global installed base of telecoms towers, 2016-2021   
Figure 29: Global installed telecoms towers by region, 2016   
Figure 30: Installed telecoms towers (active), USA and Canada, 2016-2021   
Figure 31: Installed telecoms towers, Europe by country, 2016-2021   
Figure 32: Installed telecoms towers, CIS by country, 2016-2021   
Figure 33: Installed telecoms towers, Middle East by country, 2016-2021   
Figure 34: Installed telecoms towers, North Africa by country, 2016-2021   
Figure 35: Installed telecoms towers, Sub-Saharan Africa by country, 2016-2021   
Figure 36: Global installed telecoms towers, China and India, 2016-2021   
Figure 37: Global installed telecoms towers, selected countries in Asia Pacific excluding China and India by country, 2016-2021   
Figure 38: Global installed telecoms towers, selected countries in LAC, 2016-2021   
Figure 39: The structure of tower ownership in Europe, 2016 and 2020   
Figure 40: Illegal rooftop towers in India   
Figure 41: Evolution of network design increased densification resulting from the move from voice services to data usage   
Figure 42: The Gartner Hype Curve   
Figure 43: Cumulative shipments of small cells, 2011 to 2016   
Figure 44: Cumulative shipments of small cells by cell type, 2013 to 2016   
Figure 45: Annual shipments of small cells by type, 2014 to 2017   
Figure 46: Total cost of installation of small cells by cost component   
Figure 47: Mobile traffic by cell site type by 2020   
Figure 48: Demand for cellular base stations, macro and micro, 2016-21.   
Figure 49: Structure of a mobile network   
Figure 50: Breakdown of tower expenses, capex and opex, as a % of total cost in a typical site   
Figure 51: Number of countries permitting sharing or co-location of passive infrastructure for telecoms operators   
Figure 52: Example of infrastructure sharing of 2 tenants and 4 tenants, antennas and base stations   
Figure 53: Number of bad-grid and off-grid towers, in 2014 and projected for 2020.   
Figure 54: Number of towers owned by independent towercos and by MNOs in regions and selected countries   
Figure 55: Analog vs digital signals   
Figure 56: Containers vs. virtual machines   
Figure 58: 2G o 4G download rates   
Figure 59: Current Telecommunications Hierarchy Diagram.   
Figure 60: High level NFV framework   

Tables
Table 1: Prefixes for units of data speed   
Table 2: Global mobile connections by region, 2010 to 2020   
Table 3: Global mobile connections by technology, 2010 to 2020   
Table 4: Penetration of 2G among mobile connections by region, 2010 to 2020   
Table 5: Penetration of 3G among mobile connections by region, 2010 to 2020   
Table 6: Penetration of 3G & 4G among mobile connections by region, 2010 to 2020   
Table 7: 4G leaders at end 2016   
Table 8: Penetration of 4G among mobile connections by region, 2010 to 2020.   
Table 9: Coverage of 4G in 2016   
Table 10: Number of 4G base stations in China, 2017   
Table 11: Reasons to Use Virtualisation   
Table 12: OSI Open Source Interconnection, 7 Layer Model   
Table 13: The first MVNOs   
Table 14: Segments of the MVNO and Sub-brand market   
Table 15: Major Mobile Operators in the United States   
Table 16: MVNOs in the United States   
Table 17: The distribution of macro cell sites by type   
Table 18: Distribution of GBTs and urban cell sites; RTTs, DASs and street poles in 2016.   
Table 19: Global installed telecoms towers in thousands, by region, 2016-2021   
Table 20: Installed telecoms towers, North America by country, 2016-2021   
Table 21: Installed telecoms towers, Europe by country, 2016-2021   
Table 22: Global installed telecoms towers, CIS by country, 2016-2021   
Table 23: Installed telecoms towers, Middle East by country, 2016-2021   
Table 24: Global installed telecoms towers, North Africa by country, 2016-2021   
Table 25: Installed telecoms towers, Sub-Saharan Africa by country, 2016-2021   
Table 26: Global installed telecoms towers, Asia by country, 2016-2021   
Table 27: Global installed telecoms towers, Pacific by country, 2016-2021   
Table 28: Installed telecoms towers, South America by country, 2016-2021   
Table 29: Installed telecoms towers, Central America by country, 2016-2021   
Table 30: Expenditure on telecoms towers by region, 2015 to 2020   
Table 31: Costs of constructing a telecoms towers in selected countries and regions   
Table 32: Capital expenditure on new telecoms towers and replacements and upgrades, USA and Canada nominal $ million, 2016 - 2021   
Table 33: Capital expenditure on new telecoms towers and replacements and upgrades, Europe, nominal $ million, 2016 - 2021   
Table 34: Capital expenditure on new telecoms towers and replacements and upgrades, CIS, nominal $ million, 2016 - 2021   
Table 35:  Capital expenditure on new telecoms towers and replacements and upgrades, Middle East nominal $ million, 2016 - 2021   
Table 36: Capital expenditure on new telecoms towers and replacements and upgrades, North Africa, nominal $ million, 2016 - 2021   
Table 37: Capital expenditure on new telecoms towers and replacements and upgrades, Sub-Saharan Africa, nominal $ million, 2016 - 2021   
Table 38: Capital expenditure on new telecoms towers and replacements and upgrades, China and India nominal $ million, 2016 - 2021   
Table 39: Capital expenditure on new telecoms towers, replacements and upgrades, Asia nominal $ million, 2016 – 2021 (including China and India)   
Table 40: Capital expenditure on new telecoms towers and replacements and upgrades, Pacific, nominal $ million, 2016 - 2021   
Table 41: Capital expenditure on new telecoms towers and replacements and upgrades, South America, nominal $ million, 2016 - 2021   
Table 42: Capital expenditure on new telecoms towers and replacements and upgrades, Central America, nominal $ million, 2016 – 2021   
Table 43: Small cells expenditure at installed cost by region, 2015 to 2020   
Table 44: Small cells expenditure at installed cost in Europe by country, 2015 to 2020   
Table 45: Small cells expenditure at installed cost in North America by country, 2015 to 2020   
Table 46: Small cells expenditure at installed cost in Middle East by country, 2015 to 2020   
Table 47: Small cells expenditure at installed cost in Asia Pacific by country, 2015 to 2020   
Table 48: Manufacturers of steel towers and poles, by share of production capacity   
Table 49: Backhaul vendors, macro cell and small cell   
Table 50: Share of towerco ownership of towers by region, 2016   
Table 51: Incidence of sharing in regions and selected countries   
Table 52: Number of independent towers in regions and selected countries, installed base, 2016   
Table 53: Top telecom tower companies in the United States with number of towers installed, 2012, 2014 and 2016   
Table 54: Tower portfolios of operator-promoted tower infrastructure companies/telecom operators and of third party tower companies in India, 2015   
Table 55: Numbers of towers owned by Japanese telecoms operators   
Table 56: OSI Open Source Interconnection, 7 Layer Model   
Table 57: Small cell characteristics

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 The report covers six broad fields of information:

1. The existing and traditional infrastructure of the networks and operators, base stations and backhaul, and limitations for today’s volume of data traffic and QoS.

2. The development of the generations of wireless technology from 1G to 5G is charted and analysed

3. The state of the telecoms market is quantified and forecast to 2021 for all countries.

4. The explosion of data traffic as data overtakes voice is drowning the networks capacity, revealing shortfalls and inflating costs in a market with declining earnings.   

The future is already with us:

1. The HetNet solutions for increasing network capacity and quality of service are outlined.

2. Virtualisation is already well established in IT and industry. It is now being introduced and refined for the telecoms sector, bringing greater agility and flexibility, and reducing costs.  The reports explains what network virtualisation is and reviews its current status.

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