Small Cells Increase Customer Value

Enterprise small cells can improve Customer Lifetime Value for operators by as much as 329% in a typical medium sized business, a study conducted by Real Wireless has found. By delivering improved coverage and customer satisfaction, operators can expect to make a return on their investment within the first year and will see improved customer retention as well as spend. Enterprises can also benefit both financially and from better service.

Real Wireless found that for a representative medium sized business (with around 180 employees and an office floor space of 2700m2), installing just four enterprise small cells can increase the CLV from £65,000 to as much as £271,400, an increase of 329%. Even conservative estimates would see an improvement of 194% to £190,000. The study considered a wide range of types of business (retail environment, hotel and conference centre, a hospital as well as small, medium and large offices), across several countries and studied the different needs of employees, guests and customers. Of these, all but one (the hospital) showed similarly impressive increases in value.

The study, carried out for the Small Cell Forum but conducted independently by Real Wireless, found that businesses are now increasingly unwilling to accept poor in-building coverage and 82% of businesses would switch provider to guarantee coverage.

“Our research found that there’s a very definite business opportunity for operators providing enterprises with small cell coverage, with a very tangible financial payoff,” said Professor Simon Saunders, Technology Director and co-founder of Real Wireless. “From the many operators we spoke to, it was apparent that some see the opportunity, with clear plans to increase shareholder value by using this technology to acquire and retain customers. However, many are ignoring this, and that’s a real concern when such high returns are available – those carriers risk being blindsided by their competition. As part of this study we looked at all the other options, including DAS, repeaters & Wi-Fi. While all have parts to play, it is clear that small cells offer a strong commercial benefit: an improvement in customer lifetime value of this amount is something that operators worldwide should be sitting up and taking notice of.”

Professor Saunders continued, “It is not just the carrier that can benefit, but the enterprise too. Employees quite rightly expect their smartphones to work in the office, so improving coverage means fewer dropped calls and less frustration. Finally, for building owners or in the hospitality industry there are opportunities to add new income streams such as revenue sharing.”

The business case modelling was carried out by Real Wireless based on a number of interviews and the advisory firm’s experience with in-building coverage. The model considered several different building types (small, medium and large offices; hotel and conference centre, hospital, retail environment) as well as number of sensitivity analyses. Real Wireless looked in detail at every aspect of small cell deployment, from operator services to business benefits and alternative solutions. This covered the potential for reduced churn, improved capacity and macro offload as well as the costs, from the cost of the small cell and installation, to operating expenditures such as backhaul, management and maintenance.

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David Dungay

Editor - Comms Business Magazine
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