Data-hogging cellphones are everywhere now, cluttering up the landscape like jackrabbits gone wild. But most folks don't want the humongous cell phone towers needed to keep their reception humming along anywhere near their homes. It's a dichotomy the cellphone antenna and tower makers are increasingly seeking to address -- and last month, Alcatel-Lucent (ALU) became the latest company to dial into the dilemma.
Alcatel-Lucent's lightRadio, a boxy 2-inch cellular antenna and base station system, is part of a growing trend towards shrinking traditional cellular towers --while boosting network capacities with additional cellular antenna systems. Over the years, telephone carriers have turned to microcell, picocell, femtocell and, more recently in the last few years, distributed antenna systems (DAS), in an effort to appease communities opposed to traditional cellphone towers. And with these smaller antenna systems facing less opposition through the permitting approval process, telephone carriers are able to both set them up quicker, while servicing the explosive growth in cellphones and mobile data usage.
Elaborate Camouflage Strategies
"There has always been some opposition to cell towers, but cellphone usage used to be so low that there was so few cell phone towers needed," says Michael Harris, founder and principal consultant for Kinetic Strategies. "Now, more towers are needed because people love their cellphones. To give people the cell coverage they want, you're going to need more towers but people don't want to look at towers."
Indeed. Telephone carriers and cell tower operators sometimes come up with stealth-like strategies to camouflage cell towers -- making them look like palm trees, pine trees, farm silos, cactus and other less offensive parts of the local landscape:
"What we're experiencing now is a lot of deployments on alternative structures like church steeples, bell towers, or behind score boards at stadiums," says David Wendlandt, managing partner at tower operator TowerSource. "It's still expensive to put these antennas up, but the time to market is a lot faster. And time to market is key for carriers."
Is Small Necessarily Better?
Wendlandt says that, typically, it takes several hundred thousand dollars and a year or two to build and install a traditional cell tower. And while microcell and picocell sites will still need to undergo the same permitting and approval process, the time to market is faster, he notes -- since they likely face less community opposition and, in a number of cases, use existing structures for the antennas.
But even these smaller celluar antennas systems are not without their detractors. The Coalition for Local Oversight of Utility Technologies issued this statement: "If the goal is really to minimize the impacts of wireless infrastructure on communities around the country, the focus should not be on developing an ever-proliferating range of wireless devices, but rather on building out a future-proof, technologically superior fiber-to-the-home broadband network throughout the United States as exists in other countries around the world."
Femtocells, roughly the size of a book, are the smallest cellular antenna compared with picocells and microcells. These devices are purchased and installed by customers -- and tend to be used in homes and offices to boost network reception for cellphones and data usage.
Improving Consumer Coverage
"Customers know best where they are the most often and where their signal is the weakest. As a result, the femtocell is an easy solution," says Kinetic Strategies' Michael Harris. Although the femtocells can help reduce some data congestion on a carrier's network -- and have the added benefit of having the consumer bear the cost for that upgrade -- Harris notes carriers "can't count on the customer" to be the main source of helping them to build out their network.
Picocells are installed by the carrier onto buildings or other structures to extend coverage inside buildings and surrounding areas with up to roughly 250 yards in range.
Microcell antennas, however, tend to cover roughly a mile in diameter. It takes roughly three to six microcells to get the same coverage of a traditional tower, which has about a 6 to 10 mile range. Harris noted microcells have increased in popularity over the past five years and can sometimes be found stationed on top of lamp posts, a highway sign, or a flagpole about 20 feet high.
Carriers Expressing Interest
Lucent's lightRadio will compete against the microcell for carriers' business, offering up a range of approximately 300 to 550 yards per cube. While the range is greater than a picocell, which is primarily used inside company buildings, it takes roughly 20 lightRadios to replace a traditional cell tower versus approximately three microcells.
However, the boxy cube is banking on garnering attention for its software capabilities, which can toggle between a 2G, 3G, or long-term evolution (LTE) network with a click of a button, says Jean-Pierre Lartigue, vice president of wireless networks marketing and strategy for Alcatel-Lucent, noting the flexibility of lightRadio.
Five carriers are working with Alcatel-Lucent to test lightRadio and others -- such as Verizon Wireless (VZ) and China Mobile -- have expressed interest. The trials are expected to last through October and a full roll-out next year, Lartigue says. And in 2013, lightRadio is expected to offer up another feature to increase its processing capabilities. The base station's chipset, which is currently inside each cube, will later come in versions where the chipset will be stationed inside a data center. This configuration will allow the chipsets inside the data center to share processing power and memory, which aims to bolster the robustness of a network.
"Today, carriers are looking at small cell deployment for now and in the coming years," says Lartigue. "But in 2014 and 2015, the data centers will be useful for pooling processing, which is the next step coming [with LTE]."
Sprint Nextel is talking to Alcatel-Lucent about its lightRadio and plans to work with them about testing the cell antenna system and evaluating it, says a Sprint Nextel (S) spokeswoman.
"We have been aggressive in smaller factor cell sites to help us support the growth in data traffic," she says, noting the company launched two types of femtocells over the last few years and is working on similar technology for 4G. "This [lightRadio] fits well with our strategy to support our customers growing traffic needs."
Urban and Rural Uses
Alcatel-Lucent plans to offer its lightRadio cubes in urban areas, to supplement the existing service and reception offered by traditional cell towers. A second market will serve new customers by adding lightRadio cubes to traditional cell towers already in place. And lastly, the company wants to enter rural areas that currently have no cell service by stationing its cubes in an area that has a high point.
And over the last few years, distributed antenna systems (DAS) have also gained in popularity. The antennas are spread across a certain area, say a stadium, and cellphone-toting customers can flood the DAS system all at once. The DAS system is designed to scale up to accommodate high-density usage, but also will scale down after the game is over and crowd leaves, relying on fewer anteneas. The goal of a DAS system is to manage voice and data demand more efficiently.
So where does all this leave the traditional cell tower? A steel relic or yesteryear's sculpture on the landscape?
"They'll continue to be built for some time. They have strong reception and are well-known [entities]," Harris says. "The small [cell antenna systems] will increasingly become part of the product mix, and it will take at least the next decade to gradually transition."
Get info on stocks mentioned in this article: