Survey: Service providers face network planning bottleneck due to huge increase in small cell deployments
ST. LOUIS, Aug. 7, 2012 /PRNewswire/ — Amdocs, the leading provider of customer experience systems and services, today released the findings of a survey that highlights the challenge facing service providers’ network planning and logistics departments as they seek to meet a more than 20-fold increase in data demand over the next five years.
According to the study, conducted by Rethink Technology Research, service providers are planning to deploy millions of small cells(#) to increase network capacity. This move is critical to service providers’ ability to handle increases in 3G demand and to deliver on 4G promises, both of which will vastly increase the burden on planning and logistic departments. The survey found that 59 percent of service providers expect to deploy at least 10 times more small cells by 2017 than in 2011, yet almost half of network planners (47 percent) say a lack of network planning resources is the biggest challenge facing them today, leading to rollout delays.
Other key survey findings:
- Huge increase in mobile data capacity needed: 94 percent of service providers are planning for 20-fold growth or more by 2017. Of these, 24 percent foresee 50-fold growth.
- New technologies such as 4G and LTE are only part of the solution: All service providers said that the latest 4G and LTE technologies would deliver only part of the efficiencies required. To optimize network performance, they will need sophisticated new network planning and management tools in addition to technologies that are part of the LTE specification, such as Self-Organizing Networks.
- Network investment continues to grow: 50 percent of service providers expect to increase their capital expenditure by 10-20 percent between 2012 and 2017 and 23 percent plan to increase it by even more. None expect to reduce their capital spending.
- Wi-Fi offloading expected to help ease data burden: 88 percent of service providers expect to offer Wi-Fi as part of their mobile services by 2016, with 22 percent anticipating they will have Wi-Fi integrated into at least half of their cell sites by the end of 2017, further reducing the data burden on 3G and LTE.
“Service providers are facing a data storm, forecasting more than a 20-fold data demand increase over the next five years, but 4G is not going to solve this problem on its own as the majority of devices will remain on 3G,” said Caroline Gabriel, research director at Rethink Technology Research. “The solution is small cells, which are perfect for boosting capacity and coverage in fixed locations, but the need to add millions of new cells has created a network planning bottleneck and service providers need to find smarter planning tools to speed the process.”
“With service provider budgets under increasing pressure, the huge number of small cell deployments represents a significant investment,” said Rebecca Prudhomme, Amdocs vice president of product and solutions marketing. “They will need to rely on sophisticated and flexible network planning approaches to maximize efficiency and automation in order to remain competitive.”
The survey covered a global sample of over 65 mobile and converged Tier 1 and Tier 2 service providers and was conducted between April-May 2012, based on an email questionnaire followed up by telephone interviews.
(#) Small cells are very compact, low power, short-range cellular base stations, unlike today’s traditional macrocells which have a range of tens of kilometers. Small cells comprise both femtocells ? installed in the home or small business, and connected to the service provider’s network via broadband ? and metrocells, which are higher capacity nodes, with a range of a few hundred meters and typically used inside or outside large buildings, shopping malls, stations and sporting arenas.
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For 30 years, Amdocs has ensured service providers’ success and embraced their biggest challenges. To win in the connected world, service providers rely on Amdocs to simplify the customer experience, harness the data explosion, stay ahead with new services and improve operational efficiency. The global company uniquely combines a market-leading BSS, OSS and network control product portfolio with value-driven professional services and managed services operations. With revenue of approximately $3.2 billion in fiscal 2011, Amdocs and its over 19,000 employees serve customers in more than 60 countries.
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Amdocs’ Forward-Looking Statement
This press release includes information that constitutes forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, including statements about Amdocs’ growth and business results in future quarters. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be obtained or that any deviations will not be material. Such statements involve risks and uncertainties that may cause future results to differ from those anticipated. These risks include, but are not limited to, the effects of general economic conditions, Amdocs’ ability to grow in the business segments it serves, adverse effects of market competition, rapid technological shifts that may render the Company’s products and services obsolete, potential loss of a major customer, our ability to develop long-term relationships with our customers, and risks associated with operating businesses in the international market. Amdocs may elect to update these forward-looking statements at some point in the future, however the Company specifically disclaims any obligation to do so. These and other risks are discussed at greater length in the Company’s filings with the Securities and Exchange Commission, including in our Annual Report on Form 20-F for the fiscal year ended September 30, 2011, filed on December 8, 2011 and our Form 6-K furnished for the second quarter of fiscal 2012 on May 15, 2012.