Presentation from Small Cells MENA 2013 given by Gordon Mansfield (AT&T) Chair of Small Cell Forum & Lisa Garza (Cisco) Marketing Chair.

1. Enterprise Small Cells:
The Business Case
“Distributed
Antenna
System (DAS),
is often not
economical for
many
enterprises or
operators
that serve
small to large
enterprise
customers”
Gordon Mansfield, Chairman, Small Cell Forum
Lisa Garza, Marketing Chair, Small Cell Forum
“Poor indoor
mobile coverage
and capacity
affects 39
percent of large
businesses in
Britain”
“Dissatisfaction with inbuilding coverage was
highest in the US, where
61% of enterprises
complained of problems,
while half of German firms,
43% in Spain and 39% in
the UK had similar issues.”

2. Introduction
• Small Cell Forum’s forthcoming Release 2 will focus on the
opportunity and deployment issues for small cells deployed
in Enterprise environments
• This presentation provides a ‘sneak preview’ of a small part
of our work in this area, focusing on:
• The Market Drivers for Enterprise small cells
• The Business Case for Enterprise small cells
Small Cell Forum PUBLIC

3. What do we mean by ‘Enterprise’?
The opportunity for small cells extends well beyond Enterprise offices. We see a
great opportunity for the technology to address the needs of a wide range of
business environments, including the following:
Enterprise Types
-Small business / SoHo
-Medium Enterprises / Mid-sized office buildings
The needs of these
environments are very
diverse and any solution
needs to be tailored closely to
those needs.
-Large Enterprise / corporate campuses
In
•
•
•
-Multi dwelling units
-Retail shops
-Shopping malls
-Medical facilities and hospitals
-Government and municipal buildings
-Hotels / Convention Centres
-Underground facilities
Small Cell Forum PUBLIC
common however they are:
Premises-based
Generally indoors
Needing consistent, highquality coverage
Differences emerge when
considering their needs for
specific services and analytics

4. Market Drivers for Enterprise Small
Cells
Small Cell Forum PUBLIC

5. Situation
• 39%-61% of offices have noticeably poor inbuilding coverage1
• Yet over 80% of total mobile data traffic is
indoors2
• Serving in-building traffic from outdoors places
a heavy load on Operator spectrum, reducing
potential efficiency3
• DAS plays a useful role in public buildings and
the very largest offices, but costs are often
prohibitive for smaller Enterprises - which are in
the majority
1 YouGov research, Feb 2013, figures for UK and US respectively
2 Paolini M. “Mobile data moves indoors”, September 2011
3 Signals Research Group: “Valuable Licensed Spectrum is a Largely Under-Utilized Asset Indoors”, Feb 2013

6. Key Drivers
For Enterprises
• Essential coverage that their business needs
• Opportunity for value-added services
For Operators
• Can deploy small cells like Wi-Fi (may need to re-engineer business processes)
• Establish good relationship by providing services in demand
• Huge opportunity for those who move quickly to gain market share
For Small Cell Vendors
•
High quality voice is tablestakes
•
Opportunity for value-added data services
Small Cell Forum PUBLIC

7. Voice is Essential and May Be a
Competitive Opportunity
• Voice coverage is variable
•
39%-61% of offices have noticeably poor in-building
coverage1
• In the past, Enterprises have accepted this…
•
... but are now less willing to do so
• Ubiquitous high-quality voice increasingly seen as
essential (“hygiene factor”)
• Enterprises demanding coverage & will switch
•
•
87%2 of businesses would switch provider to guarantee
coverage
72%2 of businesses are interested in small cells to
improve cellular performance
1 YouGov research, Feb 2013, figures for UK and US respectively
2 Alcatel Lucent, Feb 2013
Small Cell Forum PUBLIC

8. Data & Services Are Additional
Upsides
•
Data offload represents an important opportunity for
Operators to reduce and contain costs
•
There are real synergies for a combination of small cells and
Wi-Fi (see the Forum’s work on Integrated Small-Cell/Wi-Fi
Networks)
•
At the same time, small cells will actually stimulate and
enable additional usage
•
Value-added services are still nascent but offer opportunities
• Monetising voice
• Location - which is especially important in retail environments
• Higher value services in Corporations (PBX features, on-net
calling)
• This could be $100 Billion opportunity1 for carriers
1 Exact Ventures: “Rethinking In-building Wireless: The ‘Consumerization’ of IT and the Emergence of the Mobile Enterprise Enabled by Mobile
Operator Managed Services and the Emergence of Enterprise Small Cells” Oct 2012

9. The Business Case for Enterprise
Small Cells
Small Cell Forum PUBLIC

10. Business Case Analysis
• We commissioned an independent
analysis of the business case for
Enterprise small cells from Real
Wireless, a leading UK-based wireless
advisory firm
• This includes qualitative and
quantitative analysis of a wide range
of Enterprise environments
• The business case is examined from
both the Enterprise and Operator
viewpoints – it is essential that both
see clear value
Small Cell Forum PUBLIC

11. Case Studies
The work includes in-depth case studies of the value of small
cells in a wide range of Enterprise environments
Hospital in
the UK
Large Enterprise offices in the US
Medium-sized Enterprise
office in the UK
Small Enterprise office
in Norway
Small Cell Forum PUBLIC
Convention Centre
with Hotel in Japan
Retail Chain
in Greece

12. Sensitivity Analysis
Parameters for the case studies were carefully arrived at based on
feedback from members and Real Wireless’ own research
However they also varied key parameters to understand how the
business case varies based on these sensitivities:
Operator led vs. Enterprise
led deployment
Solution cost – varying
deployment & system costs
Trade-offs for small cells &
DAS as building size varies
Regional impacts on offload
benefits
Operator offer to the
Enterprise beyond coverage
Building size
Synergies from deployment
alongside Enterprise Wi-Fi
Small cell role in stimulating
demand
Small Cell Forum PUBLIC

13. Modelling Approach
Financial model
The modelling considers the costs and benefits, and divides these between the
Operator and the Enterprise depending on the deployment approach (Operatorled or Enterprise-led)
Small Cell Forum PUBLIC

14. Example: Medium Enterprise in UK
The challenge:
• 180 users
• 3 floors
• 2700 m2
• Need full managed service
• Want Operator to handle entire
deployment
The solution:
• 4 small cells, remotely configurable
• Dedicated backhaul functionality
• Centrex capabilities to replace
existing PBX
• Cloud-based management, enabled
by Operator but allowing user
configuration by Enterprise
Small Cell Forum PUBLIC
The outcome:
• 25% increase in voice
traffic
• 50% increase in data
traffic
• 10% increase in voice
and data ARPU
• Reduced spend for
Enterprise on PBX and
management

15. First Year Costs
• Costs are dominated by operational expenditure (OpEx) even in the first year
• Hence total cost insensitive to hardware cost
• Local management costs indicate a need for high efficiency and automation
9,000
Total Costs in First Year: GBP
8,000
7,000
Local management
6,000
Enhanced Services
Core functionality
5,000
Backhaul - Medium
4,000
System Integration
Local Controller
3,000
LAN Port
2,000
Access Point Standard
1,000
0
Total Initial Capex
Source: Real Wireless
Total Initial Opex
Small Cell Forum PUBLIC

16. Operator Business Case: Medium
Enterprise
•
•
•
Shows lifetime value of customer to the Operator, including impact of all CapEx and OpEx
Shows major value enhancement, even with conservative assumptions
Even if only a single one of the benefits was realised in practice, business case is still positive
Customer
Lifetime
Values
-­‐ Operator:
GBP
300,000
250,000
81,153
780% return on investment
200,000
27,115
266,280
185,128
55,640
150,000
24,093
100,000
33,312
64,800
50,000
0
(19,832)
Start
value Operator Incr.
voice Network Reduced
Lower Total
value Enhanced Total
value
SC
Costs
&
d ata
cost
churn
retention
basic
services enhanced
savings
cost
100%
Source: Real Wireless
Basic case
Enhanced case
286%
Small Cell Forum PUBLIC
411%

17. Enterprise Business Case: Medium
Enterprise
• Enterprise benefits arise from both direct operational cost savings
and from benefits to their own business growth and profitability
Customer
L ifetime
Values
-­‐ Enterprise:
GBP
160,000
35,284
140,000
61% return on investment
120,000
70,568
100,000
80,000
65,003
28,227
60,000
40,305
37,544
40,000
(81,153)
(25,467)
20,000
0
Inc
voice
&
Device
Enterprise Total
value PBX
savings Desktop
Enhanced Total
value
data
b enefit managem't SC
Costs
basic
hardware service
c osts enhanced
savings
savings
Source: Real Wireless
Small Cell Forum PUBLIC

18. Summary
• The advent of Enterprise small cells builds on the
established technology, standards and learnings of
residential femtocells
• Operators can provide solutions to Enterprises which were
previously not accessible at a reasonable cost
• Enterprises are demanding solutions, and agile Operators
who provide such solutions can produce massive benefits in
satisfying their customers
• Independent studies show a very strong business case for
both the Enterprise and the Operator, provided the
deployment approach is tailored to Enterprise needs
• Small Cell Forum’s Release Two will provide an ‘all you need
to know’ guide to how to achieve these benefits
Small Cell Forum PUBLIC