My Wi-Fi & Small Cell MENA presentation delivered 27th of October 2014 in Dubai. If you want a copy don't hesitate to contact me and don't miss out on my blog either www.techneconomyblog.com ... which have a lot more prose around the nice pics! ;-)

1. Small-Cell Networks
Why & When to Care!
Wi-Fi & Small Cells MENA, Dubai, UAE, 27 October 2014.
Dr. Kim Kyllesbech Larsen
Technology Office, Group Technology
Ooredoo Group.

2. Small-cell networks* in this talk.
Other types are pretty cool but for a different time & place.
Have inter-cell distances between ca. 50 meter and 300 meter.
Are structurally planned & coordinated.
Are based on licensed as well as unlicensed bands.
Cellular Small Cells = LTE & WiFi mitigates 3G “shortfalls”.
* In this presentation I am primarily concerned with larger Small Cell deployments rather than the single Small Cell Node.
Dr. Kim 2 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!

3. Dr. Kim 3 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!

4. Mobile Video rules Cellular Data!
Global Monthly usage in Exa-Bytes (Million GB).
Ca. 70 Billion
YouTube Videos1
Ca. 40% Mobile Broadband Ca. 90%
25+ (2+ hrs) YouTube Videos
per Customer* per month
CAGR 54%
2.3 Trillion
YouTube Videos1
Note: Asia, North America & Western Europe makes up for 80% of the Total Source: Cisco VNI 2013 – 2018; 2019 & 2020 is authors projection based on VNI.
(*) Based on ca. 2.7 Billion Unique Mobile data users (i.e., 3G and beyond), (**) Based on estimated 7 Billion Unique Mobile Data Users. 1 Using 5 minutes video
segment @ 240 kbs video streaming rate.
Dr. Kim 4 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!
CAGR 63%
325 (27+ hrs) YouTube Videos
per Customer** per month
YouTube Trivia – on average
6 hours viewed per month per User

5. Location matters!
FROM TO
CELLULAR
MOBILE NETWORK
DATA OFF-LOADING
TO FROM
Dr. Kim 5 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!
WIRELESS +
FIXED-NETWORK
DATA ON-LOADING
Centre drawing: Courtesy of Zahid Ghadialy / eXplanoTech’s whitepaper “4.5G: LTE & WiFi Better Together”
http://www.slideshare.net/zahidtg/45g-integration-of-lte-and-wifi-networks.

6. Best places for and types of off-load?
data voice
00:00 6:00 8:00 10:00 12:00 17:00 22:00
Femto Cell Femto Cell
@ Work
(2 – 4 Cells)
14:00
NOTE: WiFi is just a bridge to better cellular small-network systems become main stream with controlable spectrum assets and E2E Customer Experience Management.
Dr. Kim 6 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!
@ Home
(2 – 3 Cells)
On the
Go
@ Home
(1 – 2 Cells)
On the
Go
Small Cells
Mature Market Illustration
On-load potential
WiFi
+18 month

7. Customer cellular trends to be considered.
Up-to 30+ Cells
2 – 4 Cells 1 -3 Cells
80% of a customers traffic is delivered to no more than 3 cells
Source: The “Cellular Data Usage” distribution based on detailed data mining study, Mature Market Illustration.
Dr. Kim 7 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!

8. Capacity fundamentals.
CAPACITY Ci = BANDWIDTH Bi
MHz
× EFFICIENCY Ei
Mbps per MHz per Cell
Ci =
BaU (COSTLY)
BaU (COSTLY)
Dr. Kim 8 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!
× CELLS Ni
#
Business as Usual New spectrum New technologies New macro
×
VERY COSTLY
Innovation Re-farming Improvements Small-cells
×
(VERY) COSTLY
Radical Spectrum sharing Spectrum sharing Site sharing
Note: Sub−script i referes to a relevant cellular clutter area; thus the Total Capacity can be written as
i(Areas)
EFFICIENT
i(Areas)
Bi×Ei×Ni
(VERY) COSTLY
COMPLEX + EFFICIENT
COMPLEX BUT EFFICIENT, QoE CHALLENGE
SMALL CELLS
VERY EFFECTIVE
BUT COSTLY
Right Frequencies @ Sufficient Large BW
Could delay or slow proliferation of small-cells!

9. Technology is customer experience.
Satisfaction
Perceived Good Quality
(Compared to price paid)
Expectations
fulfilled
Dis-satisfaction
Expectations
unfulfilled
No service!
Continuous poor experience
Perceived poor Quality
AND perception of high price paid
Slow or no data access
Dropped call
Long call setup (>3 secs).
Repeated poor network
experiences over short time
Handset!
Dr. Kim 9 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!
High mobility
High proportion of usage on inferior technology

10. Economic Metrics to look out for!
Uncertain
푅푂퐼 =
Dependent on Pricing strategy & possible new revenue streams
Note: Wi-Fi likely cannibalistic to cellular revenues!
Δ푹−Δ퐶
Δ푪
>0
R Incremental Revenue from an Investment.
C Net Capex & Opex Cost of an Investment
Certainty
Deployment cost … CWiFi SC ~ CLTE SC with WiFi equipment
being cheaper, build similar & Opex slightly higher.
Profitability Impact ROCE / ROIC Impact
Min(tOpex,휕푡Opex ), (tCapex)  with t being time
Check Cost per Byte compared
to Price per Byte charged!
Max푁푃푉do nothing , 푁푃푉delay , 푁푃푉Option 1 ,…, 푁푃푉Option i
Dr. Kim 10 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!

11. Small Cells! … what are the good for?
Provides Surgical Capacity  Increased Customer Experience.
When Macro-Cellular is not an option
Provides Surgical Coverage  New Customers & New Traffic.
When Macro-Cellular is not an option
Cellular Small Nets integrates well with Macro-Cellular layer.
Wi-Fi & Femto being more problematic
Natural solution for high-frequency spectrum (e.g., 2.3+ GHz)
Dr. Kim 11 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!

12. Wi-Fi is hard to ignore for fixed broadband!
Pyramid: 2011 BB Penetration, Strategy Analytics 2011: Household WiFi penetration.
() Emerging APAC, () Mature APAC, () Eastern Europe, () Latin America, () North America, () Western Europe.
Dr. Kim 12 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!
CAGR 35%

13. WiFi … it’s a @Home thing!
Monthly smartphone usage.
0.9 GB
3.9 GB
1.3 GB
2.5 GB
WiFi Traffic
rises sharply between
16:00 – 2:00 AM
dominating the Evening
Cellular Data Traffic
drops sharply after
18:00
picking up after 6:00 AM
70% of Smartphone’s
WiFi traffic happens
between 16:00 and 7:00
Dr. Kim 13 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!
1.2 GB
2.0 GB
7.2 GB
3.1 GB
AM in the morning
Source: Informa/Mobidia White Paper “Smartphone use transforming with the rise of 4G and Wi-Fi”, 2014. & “Understanding today’s smartphone
user: Demystifying data usage trends on cellular & Wi-Fi networks” 2012.

14. Why Wi-Fi ?
WiFi Offload  Delay Macro-cellular Capacity Extensions ?
WiFi Offload  Allow MNO off-load low (or no) profitability traffic ?
WiFi Availability  Increased 3G Data Usage ?
Incremental 3G Data Usage  Increased 3G Revenue ?
Dr. Kim 14 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!

15. Why Wi-Fi? … It’s all about
“All I can eat of the best at lowest cost!”.
Cisco IBSG Survey 2012: 1,079 US Mobile users, 52% own a Smartphone, 48% a Basic phone,
20% owns a Tablet, 20% own an eReader, 25% a Media Player, and ca. 20% a Mobile-Gaming
Device. 75% owns a Laptop.
Dr. Kim 15 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!
Top-3
Most
Important
WiFi Attributes
Speed
“Free”
Unlimited

16. Dr. Kim 16 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!

17. WiFi business logic … true or not?
WiFi Offload  Delay Macro-cellular Capacity Extensions.
- If Cellular expansion exhausted, WiFi might be the only remaining option!
- BUT Cellular expansion scenarios often have better economics than WiFi.
- Deferred Cellular investments (not per se avoidance).
WiFi Offload  Allow off-load of Low (or No) profitability traffic.
- Require MNO control of Connection Manager – tightly coupled networks.
- Likely to be perceived as anti-neutrality of services provided.
- Possible customer push-back on such practice unless upfront agreed.
Dr. Kim 17 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!

18. WiFi business logic … true or not?
WiFi Availability  Increased 3G Data Usage.
- Plausible but causality very hard to prove.
- Remove WiFi: if Cost-neutral to consumer it is likely that part of the WiFi
traffic might spill over to Cellular.
- Without Cost-Quality arbitrage between WiFi & Cellular, it is likely that
users would be insensitive to what technology is used.
Incremental 3G Data Usage  Increased 3G Revenue.
- Very naïve market assumption.
- Will depend on price-plan structure.
- It is true if unique new 3G users are captured by WiFi propositions.
Dr. Kim 18 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!

19. So … Show me the money!
Dr. Kim 19 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!

20. Off-loading & revenue cannibalization.
Can have a very substantial cellular revenue loss impact!
Revenue loss RCellular =  nUL→P4 × (PUL – P4)
Dr. Kim 20 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!
Pul
P4
P3
P2
P1
Cellular price plans
Illustration
WiFi
Causing
Reduced
Cellular
Usage
User of given price-plan
distribution
DATA
USAGE

21. On-loading – incremental cellular traffic & revenue?
Tends to be a (very) minor positive revenue factor!
Revenue addition
RCellular = + wP2→P3 × (P3 – P2)
Dr. Kim 21 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!
Pul
P4
P3
P2
P1
Cellular price plans
Illustration
DATA
USAGE
WiFi
Resulting
Increased
Cellular
Usage
User of given price-plan
distribution

22. Dr. Kim 22 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!

23. Dr. Kim 23 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!

24. WiFi & Cellular interworking - MNO controlled.
Tightly coupled Cellular-Wireless Networks.
802.1x HS2.0
WiFi AP MC-GW
eNB
eRAN
S-GW P-GW
Dr. Kim 24 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!
Illustration
INTERNET
EPC
HSS AAA ANDSF PCRF
UE MME
Trusted WiFi
EAP-SIM*
ISP
2 1
3 4
5 5
5
CM: Connection Manager.
(*) RFC4186, good description can be found in “Analysis & Design of a SIM Based authentication solution for WLAN”, by Robert Penz. Also for a great overview of
this topic check out Zahid Ghadialy http://www.slideshare.net/zahidtg/45g-integration-of-lte-and-wifi-networks.

25. When WiFi makes the most sense for an MNO.
Faced with cellular spectral limitations or cell-split limitations.
Cellular expansion options have been exhausted!
Fixed & Mobile Broadband Operation
MNO controls on both sides of the customer experience & value chain!
Competitive pressures (from WiFi offerings).
Ultimately very likely to be a loss-loss scenario!
Dr. Kim 25 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!

26. Economics of Small Cells – A Scaling Challenge.
Small Cell Tipping Points
Mature Market Economics * Illustration
Up-to Max 20 SC Nodes
have better Capex
compared to a
macro-cellular rooftop.
Up-to 10 SC Nodes have
better Opex economy
compared to a
macro-cellular rooftop.
20
Incremental macro cost
10 10
3
New Site Co-location
*above is based on WEU cost distribution. Differences are likely to occur for other market types / regions (although those usually come with their own challenges).
Dr. Kim 26 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!
5
0.5

27. The Small Cell TCO “competition”
Economically better to exhaust cellular expansions.
Macro Cellular Sectorization.
Macro overlay / co-location of new capacity.
Abundance of bandwidth at Low frequencies (i.e., APT700).
A Macro cellular cell split.
Dr. Kim 27 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!

28. TCO scaling challenges & possible solutions.
Site Lease Scaling.
• Securing strategic locations early.
• Strategic Partnerships.
• Sharing with other operators.
Backhaul Scaling.
• Wireless backhaul (Sharing?)
• Low cost xDSL or Cable (QoS issue?)
• Fiber connectivity (availability?).
Infrastructure Scaling.
• Aggressive price reductions.
• CW: Sharing with other operators.
• CW: Strategic partnerships.
Operations Scaling.
• Self-Optimized Networks (SON).
• Outsourced (shared) operations.
• Independent business unit.
Dr. Kim 28 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!

29. To be passionate about!
Small-Cells are great surgical solutions
solving challenges not captured by Macro.
Small-Cell Networks scale economically reasonable well
for smaller clusters & coverage areas.
Large Scale Small-Cell Networks have many challenges
Economical as well as Operationally.
Small-Cell Network TCO might appear excessive!
But it might be the only way to deliver!
Dr. Kim 29 Dubai, October 2014 Kyllesbech Larsen, Small Cell Networks – Why & When to Care!

30. Dr. Kim Kyllesbech Larsen
Follow Dr. Kim on Twitter @KimKLarsen
Blog: www.TechNEconomyBlog.com
Public ppts: http://www.slideshare.net/KimKyllesbechLarsen
Acknowledgement: I am indebted to my wife Eva Varadi for her great support,
patience & understanding during the creation of this presentation.