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The carriers' not-so-secret weapon to improve cell service

They're called small cells, and they've got the industry buzzing about them. CNET explains what they are and why you should care about them.

AT&T has big plans for small cells.

When it comes to building out a network to deliver high-speed wireless service, size increasingly doesn't matter.

In fact, the wireless industry, which usually thinks big, has been buzzing about something a bit more diminutive. Wireless executives can't go through a public speech without mentioning them, tech conferences devote whole sections toward them, and one trade group has named itself after the technology in order to draft behind the growing hype.

They're called small cells, and they're poised to dramatically improve your wireless service, bringing higher speeds and more capacity to networks that are facing ever-increasing usage. At a time when more and more people hop on wireless networks with bandwidth-hogging smartphones and tablets, deploying small boxes that act like their own little cellular tower may be the answer to relieving that congestion.

"This is a real solution to a real problem the carriers are facing," said Jagdish Rebello, an analyst at IHS iSuppli. "And it's a solution the carriers can control completely."

The big boys are already embracing it. Verizon Wireless has committed to deploying 200 small cells in trials, and CEO Dan Mead said last month that the carrier would be "picking up the pace" in its deployment. Rival AT&T is in trials now, with deployments that are believed to number in the hundreds, according to a person familiar with the company's work. The company said it expects to string up 40,000 small cells by 2015.

"We're transitioning from walk to run right now," Gordon Mansfield, an executive who deals with new product development at AT&T, said about its deployment plans.

And unlike the traditional telecom equipment business, which is dominated by a few big companies like Ericsson and Huawei, small cell technology opens the door to a wider array of different companies, including the likes of Cisco and IP Access. That gives the large carriers a lot more options.

The market is expected to explode over the next few years. The global wireless industry will likely nab 300,000 units for various trials this year, a market that's expected to more than double next year, and jump to 2.2 million units by 2016, according to IHS.

So what exactly are small cells?
As its namesake suggestions, a small cell is a box that can broadcast licensed cellular radio frequencies, boosting the coverage and capacity in the immediate surrounding area. A carrier-grade small cell, which can be placed inside office buildings, hung on lampposts, or installed on top of low rooftops, can affect users within a radius of 100 to 500 meters, or roughly 200 users.

A small cell used by AT&T spotted at the CTIA Wireless show last month. Kent German/CNET

Traditionally, the carriers built out their networks using macro cells, or large, unsightly towers that adorned with antennas and dishes that reach thousands of feet and many more people.

But in areas where there is spotty coverage or heavy congestion, carriers can't quickly throw up a macro cell. For one, they're expensive, costing an average of $30,000 (or more, depending on the configuration). And despite the need for them, the public doesn't want to be near them.

Small cells, on the other hand, cost much less, at around $5,000 to $10,000, with maintenance costs only a third of the expense to operate a macro cell.

Ericsson's trials have shown that adding three small cells to augment coverage of a macro cell could double the capacity of that area, according to Sheila Burpee Duncan, head of Wi-Fi marketing for Ericsson. Burpee said she believes small cells are ideal for covering local pockets and network blind spots.

Small cells range in size, with some as small as a slightly thicker iPad, going up to the size of a large hiker's backpack. As a result, there is more flexibility on where they can be placed, and don't look as intrusive as a large cell tower.

The term small cell also incorporates femtocells, which once garnered similar buzz in the industry. Femtocells emerged as a solution to spotty coverage in the home and promised to give each home their own cell tower. But the carriers never really wanted to market a product that drew attention to the inherent weakness in their coverage, and consumers balked at the idea of paying for a device to fix their carrier's problem.

So while femtocells are technically considered small cells, the industry have moved on to focus on carrier-grade small cells, which are designed for public venues, outdoor areas, or large buildings. Individual homes will largely rely on Wi-Fi for their Internet coverage.

"Femtocell is a bad word in the industry right now," Rebello said. "It's associated with not living up to the hype."

Indeed, the trade group Femto Forum changed its name to the Small Cell Forum in February, and held a conference this past week.

Okay, but what's in it for me?
The result of a fully realized small cell deployment will be improved confidence that the network will work as it should.

The ultimate promise, of course, is a faster connection, one that remains zippy even if you're in a crowd of people all trying to tap into the same network. And those dead spots you occasionally stumble upon? They could be a thing of the past.

"I personally think we're going toward a better customer experience," said Nadim Taleb, co-founder and executive chairman of Nexius, which provides network consulting and deployment services to the major carriers.

The data caps that carriers have imposed over the last few years could also see some relief. Small cells enable more capacity, which could lead to the carriers raising their caps over time. With more high-bandwidth-consuming apps, many of which incorporate streaming video, coming out, the need for more data will only increase over time.

Taleb said small cells will also enable carriers to promise a guaranteed level of service for a premium, a business model they're very interested in pursuing.

So while the carriers may not provide any relief on the phone bill end, they could offer more bang for the buck when it comes to data.

So, why the buzz?
The industry has begun paying more attention to small cells because of the seemingly insatiable hunger for bandwidth by consumers.

Data traffic will rise 12-fold by 2017, according to Duncan.

As an answer, the carriers moved to 4G LTE networks, which promised higher data speeds and capacity. But as the carriers look at the data usage, they're beginning to realize that even the more efficient 4G networks aren't going to cut it.

The carriers also complain that there is a lack of available spectrum, or airwaves used to ferry data from the phone back to the cell tower, to help with capacity. The larger players have been hoarding spectrum in anticipation of bandwidth growth.

As a result, many of them are looking to small cells to help alleviate the pain they know is coming down the road.

"There's not an operator I have met that has not been talking about it," said Teresa McEneny, director of mobile Internet for Cisco. The company bought Ubiquisys, which builds business-grade small cells, and hopes to have a bigger hand in the cellular network market.

So where are we with the roll out?
There's a lot of promise, but unfortunately, it's just that for now.

Verizon and AT&T are still in trials, and broad deployment isn't expected for another two years. Industry executives are still looking at the economics of small cell, and many aren't sure they'll save money investing in them over a few well-placed macro cells.

And while they are smaller and can be installed a lot easier, there remain challenges in getting permission from city officials and property owners. There's the additional hurdle of figuring out a way to connect them back to the network.

The Small Cell Forum Web site. Screenshot taken by Roger Cheng/CNET

"The more we go, the more we realize there are challenges," Taleb said. "It's going much slower than we all thought."

Ira Palti, CEO of Ceragon, which builds the connections between the macro cells, small cells, and other network components, said he believes the main deployment may not happen for another three to five years.

He added that small cells are riding a familiar hype curve that accompanies any new promising technology.

"We're at very high hype levels," he said. "The hype peaks and drops, and then the real deployments begin. I don't think we've peaked on small cell hype yet."