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October 05, 2009

IPhone -Femtocells to the Rescue? Operators, Be Careful with the Rollout (Part 1 of 3)

By TMCnet Special Guest
Ian Goetz, Director of Core Solutions at AIRCOM International

Part 1 – Why Femtocells (News - Alert)? Why Now?

 

As 3G coverage becomes more ubiquitous, the promise of “mobile anywhere” will be realized.

 

However, to achieve it, indoor coverage and capacity is needed to provide service where the vast majority of traffic originates. Even the most ardent supporter of mobile communications would agree that the marketing of 3G services has far outweighed its performance for quite some time.

 

Now, the two concepts are more closely aligned. Problem is, we are entering a risk-filled market state of barely adequate mobile broadband service availability that is coupled with a plethora of applications and devices that catalyze explosive growth in the use of mobile data.

 

Given the general market enthusiasm for mobile data, it is imperative that operators meet subscribers’ quality-of-service expectations, especially indoors, where the majority of mobile data usage takes place. Looking at the business and consumer markets, more than 60 percent of mobile voice and data traffic now originates from inside buildings, and – at best – 3G indoor coverage is mostly average. As they currently exist, the networks simply cannot handle significant additional indoor traffic. Yet giving the impression to the end user that the system cannot cope does not do justice to the capability of the technology and could damage the reputation of mobile data at precisely the time that operators need its revenue.

 

Coverage and capacity are still the major issues as mobile broadband usage soars. Since 3G signals degrade as they penetrate building structures, the poorer quality signal means dropped calls and download delays for customers trying to utilize a 3G network indoors. Because there is no incentive for subscribers to use mobile instead of the landline or the mobile data link instead of the hard-wired DSL broadband Internet, operators lose revenue. No matter how smart and seductive the advertising (even if the usage is on a “free” tariff), today’s subscribers do not stick with a frozen video download or “can you hear me now?” conversations.

 

Of course, operators are adding significant capacity to the 3G network by strengthening the macro network. On average, an operator typically installs 300 new base stations into its macro 3G network during each financial quarter when in a large capacity growth period. However, these additional base stations do not address the in-building issues of coverage. With growth in mobile data usage predicted to be massive over the coming years, mobile operators do not want to see that revenue going to fixed-line providers that deliver superior quality service.

 

Coupled with enhanced coverage, mobile operators must deliver greater capacity to cope with this forecasted rocketing usage, and this capacity needs to be specifically in-building. Subscribers are far more likely to use bandwidth-hungry services, like movie downloads and gaming, while at home.

 

With those challenges to address, the arrival of the femtocell may be a solution for the operators. A femtocell – originally known as an Access Point (News - Alert) Base Station – is a small cellular base station, typically designed for use in residential or small business environments. A low-power, router-size box, femtocells plug into a subscriber’s home or office broadband connection and are compatible with all existing 3G capable mobile handsets. Femtocells operate as extensions of the mobile network, connecting to it via the subscribers’ DSL broadband connection.

 

The femtocell provides additional coverage and capacity directly into homes and offices, exactly where it is needed. As discussed, 3G indoor coverage is very poor, making it unlikely that you can get a decent 3G signal in the home. However, if 3G were available indoors via a femtocell, then phones, laptops and home electronics could communicate using licensed frequencies without interference. By adding an unlimited data tariff, subscribers do not have to pay twice for home and roaming plans.Additional benefits for subscribers include replacing their power-hungry WiFi (News - Alert) networks; eliminating interference problems with WiFi boxes; increasing the connection speed; and providing “always-on” iPhone-like connectivity to the network for laptops, mobile phones, electronics, and much more.

 

The benefit for operators is clear: subscribers pay for the equipment, the power to run it, and the backhaul connection. There is no planning permission or site acquisition, so the femtocell is a perfectly positioned product in these times of financial constraints on both operator capital and operational expenditure.


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Edited by Michael Dinan
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