Femtocell Thoughts

Femtocells are small cellular base stations designed to extend communications service coverage indoors, especially where access would be limited or unavailable otherwise. Femtocell connects to the service provider’s network via broadband (DSL or cable). ABI Research predicts that by 2012, 36 million femtocells will be in use by 152 million users around the world.

 

Femtocell technology can be deployed on all communications standards including GS M (which includes UMTS, HSPA and WCDMA), CDMA2000, TD-SCDMA and WiMAX. However, the GS M family is dominating the femtocell market today with several femtocell vendors including Ubiquisys, Alcatel-Lucent, ZTE, Samsung and others offering support to GS M technology. In April, the Femto Forum, along with the Third Generation Partnership Project (3GPP ) officially announced the first WCDMA femtocell standard with specifications that cover network architecture, radio and interference, management and provisioning and security.

Benefits of a Femtocell

Femtocells promise attractive business opportunities for service providers. They open up opportunities for new services apart from offering increased capacity and coverage. In turn, femtocells reduce both CAPE X and OPE X. Femtocells are also viewed as an alternative to deliver fixed mobile convergence (FMC). Femtocells allow users to leverage existing broadband and IP technologies to deliver low-cost, high quality mobile services using a single handset. While the existing FMC services require dual-mode handsets that work with the unlicensed spectrum wireless access points in the home or enterprise, a femtocell-based FMC works with existing handsets, but requires a new access point that uses the licensed spectrum.

Femtocell Deployments in Asia-Pacific

The Asia-Pacific region is characterized by a diverse economy with diverse mobile ecosystems, so demand for in-building wireless solutions differs in different markets. While some of Asia’s leading mobile operators have stepped into femtocell trials, others are involved in rigorous plans for femtocell deployment. However, there are certain markets in the APA C region, where femtocell is not considered to be a feasible option for quite some time. For example, India is one of the fastest emerging mobile markets in the world; however, operators in the country are not ready to adopt femtocell due to a number of reasons including low broadband penetration and infrastructure-related challenges. In such countries, femtocell may initially emerge as a viable in-building wireless solution for enterprises or public utilities where broadband services are highly available and network coverage is crucial.

In 2008 ABI Research had predicted that femtocells would generate revenue of nearly $5 million that year from device shipments in the Asia-Pacific region. This figure, though not a huge sum in global terms, is significant because “it comes from a market that barely exists, and as such, it represents quite satisfactory early growth,” according to ABI Research. Already several suppliers in Greater China and South Korea have vowed to commercially launch femtocells, with many of them ready to release their first generation of products.

Ubiquisys, the leading developer of 3G femtocells, recently introduced an outdoor femtocell designed to serve as a mini outdoor base station that supports a small number of users, but over a greater range than indoor femtocells. Ubiquisys developed the technology along with Softbank, a leading UMTS/HSPA operator in Japan. The product connects to an IP Multimedia Subsystem (IMS) core network. SoftBank is deploying the femtocell in rural areas as a means of extending its 3G footprint, company officials said. They plan to eventually expand the technology to urban areas. SoftBank Mobile was the world’s first operator to announce a mass-market commercial launch of 3G femtocells using Ubiquisys’ ZoneGate device and IMS infrastructure from NE C Corporation.

In South Korea, two leading mobile operators SK Telecom and KTF are looking to develop 3G femtocell-related technologies. The companies have collaborated with China’s Huawei Technologies. SK Telecom has developed Mobile WiMax Business Femtocell, which according to the company is a ‘super-tiny base station’ that offers wireless high speed Internet by accessing the core network through SK Telecom’s exclusive network. KTF, the country’s leading WCDMA provider, also teamed up with Huawei to develop technology that could reduce the use of outside base stations and cables. The technology can lead to resource and cost saving, and eventually achieve carbon emissions reductions too, say company officials.

In 2008, Starbub, Singapore’s fastest growing mobile services provider, announced the first commercial 3G femtocell service in Singapore. Here again, Huawei has helped the company by providing end-to-end solutions for the deployment. The launch of the service was also marked by a number of value-added features. At the time of the launch, the company announced that outgoing and incoming local voice/video calls and SMSs are free for Home Zone subscribers, though other GPRS -related functions such as MMS, Internet surfing and downloading of content via the Web are still chargeable at published rates based on the user’s mobile plan. Along with this, the company also announced other bonus offers to appeal to the masses.

China Unicom recently launched their femtocell solution called 3G Inn service with Huawei’s femtocell solution. The service offers 3G mobile phones direct connectivity to a fixed broadband network. The service delivers better indoors 3G experience with quicker internet download speeds of around 7.2MB/s. The company has launched it across Beijing for now and plans to provide the service on a nationwide scale in the future.

Deployment Challenges Cost Factor

Femtocell deployments face a number of challenges. According to market research firm Ovum, the price of femtocell is a major concern for operators. While femtocell can result in significant cost savings by offloading a macro network, it still poses a challenge, mainly due to the increased price of deployments. The current price of a femtocell base station varies between $150 and $200, which they think is too expensive for initial deployments. Only when the price drops to nearly $100, femtocell will provide them a business case, Ovum said. The benefits of femtocell can only be realized when there is high penetration and demand for mobile data services, which is not the case even in developed markets like Hong Kong, Singapore and Japan, Ovum researchers said. Further, operators are forced to subsidize the service to accelerate the initial deployments. This would further reduce the ROI , many argue.

‘Femtocell-on-a-chip’ is a new concept that supports femtocell cost reduction. The integration of software on silicon reduces the number of components and lowers development costs. Integrating femtocell technology into set-top boxes or DSL modems also provides a cost-effective alternative. Scalability is another concern for low-cost femtocell deployment. As an emerging technology trend, femtocell may not see mass adoption at least in the near future. If there is large-scale adoption, operators can avoid the cost of building and maintaining expensive macrocells, thereby making significant cost savings.

Femtocell as Software

Femto-Engine from Ubiquisys is the world’s first software femtocell. The product separates femtocell functionality from the underlying hardware foundation. Simultaneously Ubiquisys also introduced G3-mini, the first Femto Engine-powered femtocell in the industry. Manufactured by SerComm, G3-mini is capable of offering performance of up to eight simultaneous calls and HSPA +.

This development is a revolutionary step forward for the femtocell industry, says ABI Research. This evolution of the Femto concept will enable almost any electronics manufacturer to make femtocell-enabled devices, the agency said. The technology enables device manufacturers to embed femtocell technology in multiple device types and form factors at a breakthrough price point for mass-market commercial adoption.

Femto-Engine software is tested with hundreds of mobile devices and hardened through commercial deployments in networks such as SoftBank and SFR, according to the company. The company is also offering the “Engine-Ready” program to OE Ms to fast-track the production of commercial-grade femtocell hardware. Through this, Ubiquisys provides a complete hardware blueprint certified for use with its software, and takes care of selecting the key components, including the baseband modem and RF chipsets.

Standardization of architecture

Absence of a single, industry-standard architecture is a major concern affecting femtocell adoption among carriers. Currently, there are two broad categories of network architectures: UMTSbased and SIP -based, and there are more than 15 different femtocell architectures being popularized for all technologies including GS M, CDMA, WCDMA and WiMAX. This diversity, according to officials, will result in complications in interoperability and ultimately increased rollout costs. An open standard will be critical at this juncture to create an economy of scale that would enable the OE M and semiconductor vendors to meet the cost challenges and encourage a femtocell market, experts say.

Femto Forum, an independent industry association dedicated to supporting femtocell deployment worldwide, has initiated programs designed to standardize femtocell network architecture and develop a common standard for the future. According to officials at Femto Forum, the common standard will “not only encourage interoperability and increase economies of scale, thereby helping keep costs low, but it will also help to support far-reaching new femtocell applications.”

Minimizing radio frequency (RF) interference RF interference is a cause of worry because it can degrade network capacity and quality of service. Femtocells work in the licensed spectrum. Interference happens when the macrocell and femtocell network utilize the same frequency band. Interference can also occur within each femtocell network, especially in crowded dwelling units such as apartments or condominiums. One viable solution for this issue is to deploy femtocells on a radio frequency that is different from that of the carrier’s macro cellular network, but in such a case, the cost of spectrum acquisition becomes a concern for many. Another alternative is to utilize the mode-2 fixed power option available in the 3G configuration parameters, which, according to experts, would prevent mobile unit power from increasing and causing interference. “Smart radios” is another innovative concept, which addresses the interference issue by adjusting signals based on their environments. However, this technology may pose certain operational challenges, as it would require the carrier to configure the femtocells centrally.

Customer Concerns

Femtocells, commonly referred to as home base stations, are sources of hazardous radiation, many think. The industry is keen to educate people about the safe use of femtocells. There is a widespread concern among the providers that customer worries regarding the safe use of femtocells could hamper the progress of the technology even before it takes off. In a paper entitled “Femtocells and Health,” the Femto Forum has tried to address the potential health and safety concerns related to femtocells. It states that femtocells must comply with the same safety limits applied to other wireless devices such as mobile phones and antenna sites. The Forum concludes, “There are no established health effects from exposure to radio waves below the limits applicable to wireless communications systems.”

Security is another concern that may arise when femtocell mass deployment occurs among residential customers. Femtocells rely on residential IP broadband connections, so they are connected via cable modems or DSL routers. Using the Internet as a backhaul raises a number of security challenges such as protecting the integrity of the operators’ core networks from the public environment of the Internet, and protecting the integrity of users’ traffic, while ensuring seamless transitions between the macro and femtocell networks.

Regulatory issues

According to ABI Research, regulatory complications may also pose a major challenge in femtocell deployments in Asia. Softbank Mobile in Japan had a tough time getting regulatory approval before it could begin commercial femtocell rollout. In South Korea, the government is working on a fixed-mobile convergence policy. Unless it is finalized, the chances of femtocell rollout are unlikely. In India and China, the femtocell deployment mainly depends on the 3G license development, says the agency. China has already initiated femtocell deployments across the country. With no sign of a 3G spectrum auction in the coming months, India is nowhere in the femtocell market picture.

Controversy

The ultimate beneficiary of femtocell technology is the cellular provider because the technology enables them to improve cellular coverage without further investing in their infrastructure. The user, on the other hand, is liable to provide and pay for an Internet connection to route the femtocell traffic. The service also incurs additional service charges for maintaining a quality network. In other words, the customers are paying for the equipment as well as a monthly charge to the carrier just because the carrier is not able to provide them the service that they are already paying for. Here comes the controversy – whether the customer should be charged for the service or not. With femtocell deployment expected to pick up over the coming years, this issue needs a little more attention.

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