The Small Cell Americas Conference and Small Cell Forum events are taking place this week in Dallas, Texas. This makes me think back in time…. I first started discussing small cells as a product in 2002, at Samsung, and 11 years later we have progressed very little in the way technology normally goes. From what I can say, there have been 3 major hurdles that have not helped here.
1. Big iron OEMs make lots of $ from macro cells. They have not seen a business plan that makes sense to them, you know where they introduce a product that essentially cannibalizes their existing revenue stream and converts $40K units into $400 units.
2. The operators are not exactly sure what to do here. Firstly, they have a business model that is pretty tight. They price a flashy new user device at an attractive price (normally break even or lossy), then subsidize this purchase with the anticipated 2 year service revenue. Notice there was no cell in the spreadsheet that was for small cell in that revenue plan. I’ve witnessed arguments between company executives over whom would actually ‘pay’ for the device, example, is it a marketing expense or is it an operations expense? Let’s call this one chicken and egg.
| | | Next → |
They ask themselves, what will the consumer think of us, or another way, does sending a consumer a small cell signal to the public that our coverage is poor (even if it really is, and forget that it’s cheaper to operate a good network than a poor one)?