June 6 (Bloomberg) -- While tennis fans watch the action on the courts at the French Open this week, Jean-Luc Vuillemin is more focused on what’s happening in the stands. Across the Roland Garros complex in Paris, fans use mobile devices to keep an eye on matches other than the one they’re attending -- potentially overloading parts of the France Telecom SA wireless network that Vuillemin oversees.
“More and more spots just like this one are going to pop up,” Vuillemin said. “Our networks overall have enough capacity, but we face challenges where large crowds connect in one place and generate loads of traffic.”
From stadiums to airports, train stations to business centers, wireless networks worldwide get bogged down when thousands of users packed into tight spaces reach for their handsets to video chat, watch movies and play games online.
Ericsson AB, Alcatel-Lucent SA and Huawei Technologies Co. say they have a solution: downsized antennas, smaller and cheaper, made to hang on lamp posts, traffic lights or on the side of buildings where networks need the boost and full-blown gear can’t fit.
While no widespread installation of these new “small cells” has been announced, manufacturers have high hopes for the technology. The market may triple to $10.1 billion by 2015 from 2012, according to ABI Research. In contrast, capital spending by phone companies worldwide this year could expand 3 percent to $314 billion, researcher Ovum predicts, after half a decade of average annual growth of 6.5 percent.
“Vendors are betting they can sell ten times the volume if they turn to small cells,” said Dimitris Mavrakis, an analyst at Informa Telecoms & Media in Athens. “In comparison, developed markets are already saturated with macro cells.”
Alcatel-Lucent last year released an early version of its lightRadio miniature antenna, a 5-centimeter-tall cube. The Paris company has been working to improve it with seven customers including Verizon Communications Inc., France Telecom, Telefonica SA and China Mobile Ltd.
Ericsson’s smallest product is about the size of a four-slice toaster. The world’s biggest maker of wireless-network equipment bought Canadian company BelAir Networks in April to broaden its reach into offloading data.
Small-cell equipment is eight to 12 times cheaper than larger gear, according to Nick Marshall, an analyst with ABI Research in Austin, Texas. Marshall said prices are set to fall about 18 percent in the next three years as the number of antennas sold globally more than triples to 1.6 million.
“I doubt that there will be more profit,” Marshall said. “Second and third-tier vendors will also enter this market and prices will go down.”
The new technology isn’t the only option carriers are trying as they seek to keep up with surging mobile traffic. In the U.S., Verizon Wireless and AT&T Inc. have capped data speeds for users of unlimited wireless packages, and some carriers are trying to offload traffic to Wi-Fi. AT&T has teamed up with the likes of Starbucks Corp. to build connection spots in coffee shops and similar locales.
European carriers have some of the most ambitious experiments with small-cell technology. Nokia Siemens Networks plans to team up with a French mobile-phone company to roll out dozens of mini-antennas starting next year to beef up capacity in Paris’s La Defense, an area notorious for poor wireless signals.
Mounir Bougrine, a 41-year-old technical engineer at Societe Generale SA, says that whenever he wants to surf the Web on his mobile phone he has to step out of the investment bank’s skyscraper, walk some 200 meters and hope for the best.
“I’m out here a hundred times a day looking for a spot with a proper working signal,” said Bougrine, one of 160,000 people who work in the west-side district that is home to some of France’s biggest banks and companies.
The need to place them accurately because of narrow range coverage may hinder a quick deployment of small cells, said Emin Gurdenli of consulting firm Azenby. In a test in Milan, Vodafone Group Plc says its small cells suffered from interference and dropped connections.
“It was crashing everything,” Chief Technology Officer Steve Pusey said during an analyst presentation last month.
French carrier SFR, a unit of Vivendi SA and competitor to France Telecom, has set up 4 million Wi-Fi hot spots for its subscribers by beaming wireless signals from set-top boxes. To offload pressure on its network, SFR this month plans to start offering technology that can shift smartphone signals to Wi-Fi and back.
Vuillemin, the France Telecom network chief, says the carrier sees the French Open as an ideal testing ground for new technologies. The company offers a special iPhone and Android app for the tournament that features scores, player stats and live broadcasts of matches, creating just the kind of network congestion that keeps Vuillemin up at night.
And since it was downloaded 800,000 times last year, it gives him plenty of incentive to find new solutions. ’’Small cells,’’ he said, ’’could be part of the fix.’’
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