Virgin’s hosted small cell offering must accommodate MNO’s to win business
The newly-announced small cell hosting service from Virgin Media Business, dubbed Small Cells as a Service (SCaaS) by the company, is designed to address some of the mobile operators’ key concerns about small cell deployments – in particular with regard to site acquisition and backhaul. But the UK cable provider admits that its talks with potential operator customers still have some way to go before any contracts are likely to be inked.
Virgin wants to facilitate the roll out of metrocell networks in urban centres by providing access to key locations such as street furniture, which can then be used as a platform for operators’ small cell installations. An important added benefit for the MNOs is access to Virgin Media’s high-capacity fibre optic network for backhauling their traffic.
The launch of the SCaaS offering follows the completion of two UK city trials carried out by Virgin Media in Bristol and Newcastle, which, as well as proving the small cell technology, were designed to demonstrate that the relationship forged with city authorities through partnership with a broadband network provider can help to deliver low-cost mobile broadband services.
Virgin Media points to concerns among MNOs that the fees charged to them by city corporations for the use lamp posts and street furniture could rapidly escalate, and believes that it can secure the necessary sites while reducing the costs passed on to operators. In this way, by virtue of providing a single landlord and a single agreement for the underlying small cell infrastructure, it hopes to remove a major hurdle for small cell deployments.
While Virgin has not fully outlined its business model, current agreements between network providers and municipal authorities for the provision of wifi can include an element of revenue share along with site fees, while for the MNOs the provision of wholesale data offload can help them avoid infrastructure build-out costs. Virgin Media has itself also explored other possibilities for revenue generation through advertising and branding opportunities provided by deals such as its contract to provide wifi coverage on parts of London’s underground network.
A key concern for mobile operators considering the SCaaS proposition will be the need for them to retain the maximum flexibility to design and plan their deployments. Virgin says that this, along with the choice of small-cell technology, vendor partner, and critical associated areas such as radio planning and integration with the macro network environment, will remain firmly with the MNO.
Virgin says that the results from its UK city trials, which were carried out using Alcatel-Lucent’s LightRadio small cell technology, demonstrate that street mounted small cells can significantly boost in-building as well as outdoor coverage in the immediate area, over distances of 400metres or more, even when using a band with notoriously poor in-building penetration such as 2.6GHz.
While SCaaS may help to reduce the twin burdens of cost and bureaucracy associated with site acquisition and network deployment, MNOs will need to know that it will also provide the necessary flexibility for them to meet the technical requirements of improved network capacity and service quality promised by small cell technologies, while also leaving scope for differentiation of services.
The coming months will show whether or not the hosted service will win any mobile operator customers for the company, and existing customers of Virgin Media Business’s mobile backhaul service will be an obvious early target. The company provides backhaul in the UK to MBNL, the joint venture company that supplies network sharing for 3 UK and Everything Everywhere.