By Stewart Baines.
I’m at the Femtocell World Summit over the next three days to find out just how far the small cell technology and business models have come in the last year. There’s presentations from a glittering array of operators – from Vodafone and Telecom Italia in Europe to emerging market players like Russia’s MTS, Megafon, and Thailand’s TOT. There also insights from leading Asian giants SK Telecom and DoCoMo. I will be posting periodically over the next couple of days. If you have any questions for the speakers, send me a message @stewartbaines.
Telecom Italia
We haven’t heard too much on Telecom Italia’s femtocell strategy to date so it was interesting to listen to Ferruccio Antonelli, TI’s Wireless Devices Director at Femtocell World Summit. Here are some highlights from his presentation:
- TI has a diverse portfolio of services in Italy including mobile, broadband, IP telephony and TV. It also has a strong footprint in Brazil and Argentina.
- When it evaluates a new tech, it considers how it can be deployed globally but with local adaption
- Italy is the leading mobile country in the world based on penetration. Antonelli cited an Ofcom report that estimates that Italy has 152 subscriptions per 100 people. Is this because of operators are reporting inactive subs? (Read Joss Gillet’s report on it here)
- In 2H 2011, TI is deploying femtocell services to homes (using the 4 channel Alcatel Homecell) and to businesses (using the 8 channel Alcatel Enterprise cell)
- TI’s femto services do not require a TI broadband line – but it helps. Voice quality of service will only be guaranteed between TI’s DSL router and the softswitch.
- Femto services support all services available on the mobile macro network, namely voice, data and video telephony
- Femtos are closed. You need to plug in your numbers into the whitelist
- Femtos are have femto-to-macro handoff (but not the other way around) and femto-to-femto handoff. The latter is only really important for businesses that want to deploy multiple femtos in one building.
- They have not offered open access femtos, which can be discovered by the macro network, because they are unsure how users will react if their calls suddently improved if they stray onto a public, open-access femto without being notified. Will it negatively impact the perception of the network as a whole (appear patchy?)
- Deployment is zero touch. They are supplied preconfigured. All users need to do it plug the femto in, and enter their whitelist into the online control panel.
- Working on femtocell access point authentication (FAP). Want to be sure that it is secure and have a strong relationship between access point and gateway.
- Italy is considering the legality of location sharing from the femtocell. Femtocell can offer emergency calls routing and localisation.
- Techniques for identifying location of femto: cell ID, IP address of broadband router (only available to TI subscribers), and through the customer registering the address. In theory, they are not able to move the femtocell to a new address without notifying the operator.
- In future, will notify users they are in a femtozone by generating a tone, and possible a handset symbol.
- Minimum backhaul – 1mbps
- Will be using uplink multiplexing which will allow 4 simultaneous calls to be compressed into just 148 kbps.
- Now have the capability to do femtozone tariffing that marketing people can use to offer free voice or other incentives.
- Considering how the femtocell can be used as a probe, sniffing out local users and pushing them information (with their permission).
- Accenture, Alcatel-Lucent and Telecom Italia launched world’s first standards-based SDK for creating femtocell apps on the TI service. The SDKs are available for Android and Java.
- The three are working on a museum project to deliver targeted visitor information as they pass through rooms.
SK Telecom
South Korean’s leading mobile operators discussed the impact of the mobile data explosion and its three pronged defence.
- 20% of South Korean mobile users now have smartphones. Advent of $50pm all-you-can-eat data plans drove usage through the roof, causing severe network overload. Smartphone subs increased 3x since unlimited price plan introduced.
- So how do they cope with the data explosion? Three approachs
- Wi-fi offload
- Data-only femtocells
- Adding two carriers to macrocells
- SK Telecom hopes to have 10,000 hotspot and home access points deployed by the end of 2011.
- Why data only femtocells? Concerned that there can be strong interference between femtos & macros, they chose data only. The voice traffic is not offloaded.
- SK Telecom has public-access femtos, with 1 carrier, which can support a range up to 2km!!! That’s almost the reach of the average macro footprint.
Alcatel-Lucent
Steve Kemp looked at the unprecedented rise of mobile data. This is a new generation that is not using the smartphones for simply browsing the internet or texting.
- The trend is for mobile broadband activity becoming more visual.
- This is a generation that is watching 2 billion Facebook videos a month and 2 billion YouTube videos a day.
- Alcatel-Lucent expects mobile traffic growth to be in the order of 30x in the next five years.
- Just look at the iPad – users consumer twice as much data (and signalling) as the average iPhone user.
- What’s the problem? Signal to noise. As Claude Shannon at Bell Labs in 1948 theorized, a network is limited intrinsically by the noise generated by the media and the users. As you get more users, it degrades the overall capacity of the network.
- LTE, despite being more spectrally efficient than 3G, has a theoretical capacity limit, under Shannon’s Law, of 3.5 mbps per hertz.
- The answer to this inescapable fact is to make the cell size smaller so that spectrum is more efficiently used. And use beam forming to focus spectrum where you need it, away from interference
- Kemp then moved onto the business case for femtocells. You need initially to improve customer retention because keeping customers is a whole lot easier than gaining new ones.
- Femtocells result in a 60% downlink improvement, and a 26% uplink improvement. With lower latency, customers are happier with their voice calls at home and churn less. You can build a business case for home femtocells on this alone.
- Metro femtocells have even more compelling business case. The more traffic is offloaded onto small cells, the users on macro cell also see a service improvement.
- Macrocell increase in capacity is initially relatively cheap – add carriers and split cells. But it soon reaches a ceiling and you get diminishing returns (because of Shannon’s Law)
- Deploy metrocells now, you initially have higher upfront because you need to buy a metrocell gateway, but you get a much quicker payoff. In year 3, metrocell deployment is 1/3 cost of marcocell deployment.
- Self-organizing is central to these lower costs. No truck roll is needed and the small cell self configures.
Picochip
Nigel Toon, CEO of Picochip, the leading supplier of chips to femtocell equipment manufacturers, said mobile traffic is moving indoors, making it harder for the macrocell to serve customers well.
- Mobile data traffic exploding – you guess by how much. Is it 30x, 50x or even 1000x ?
- Problem is carriers capex can’t grow at 1000x
- Currently carriers spend, on average, 20% of their revenues on capex. And the cumulative amount of capex is increasing 8% year on year).
- Need to serve customers more efficiently and at a lower cost.
- Today a user in the middle of macrocell might only experience 40kbps. Tomorrow, with femtocells, the user can enjoy 8mbps while increasing the performance (less crowing on the macro) to 170 kbps.
- The key to low cost deployment is self-organizing, self-configuring, interference management and remote management.
Juniper Research
Little news but there was this one snippet. Mobile data traffic from smart phones, tablets and other devices to grow to 14,211 petabytes by 2015. This will be equivalent to 18 billion video downloads. By 2016, 63% of this will be offloaded to Wifi or femto.
UMobile
Bill Chang, chief planning and strategy officer, UMobile explained that UMobile is a new challenger in Malaysia, challenging three well entrenched incumbents Digi (leader in price), Maxis (leader in products) and Celcom (leader in coverage.)
- Malaysia has 120% penetration, expected to rise to 150% within 5 years. 28 m population.
- 70% of market revenues come from 8% coverage area. Highly urbanised. So when UMobile launched in 2007, made sense to target where 70% of the revenue was coming from.
- Currently has 1200 node Bs and roaming onto 2G partner network.
- Price is in decline in Malaysia, ARPUS are falling for voice. The market has reached revenue saturation.
- Operators need data centric growth and they need it to be low costs business case. Makes sense to use femtocells.
- (In Malaysia, smartphones make up 65% of new phone sales)
- Umobile has limited capex, so trialling femtos with Alcatel-Lucent***. Using home and hotspot femtos.
- Plan to launch femtos commercially. Will improve indoor coverage, data offload, reducing roaming costs (because they have to pay their 2G partner) and bundled services.
- Malaysian govt has target of 75% BB penetration by 2016.
- “Its a no brainer for us to give away femtos for free”
***There was no deliberate bias many operators presenting today mentioned that Alcatel was their partner.