Femtocells have had a very specific role to play in assisting operators fill holes in their network coverage, and thereby reduce churn. But the capabilities of femtocells are not limited to providing home-zone services for households. The same capabilities – plug and play, self-configuring, self-organising – have a benefit outside the brick walls.

The next generation of mobile networks – LTE – will be constructed with cells of many different sizes, shapes and applications. There will still be large cells supporting hundreds of simulataneous users. But perhaps more importantly, there will be medium-sized “metrocells” providing targeted coverage in high streets, train stations and stadia – they will be like femtocells, differing only that they perhaps use wireless or radio backhaul, open access and have QoS capabilities. And there will be microcells bringing coverage to villages, where people live rather than current macrocells providing coverage of empty fields. Cells for outdoors, cells for indoors. All LTE cells will share an underlying family trait: they have many of the characteristics of the 3G femtocell.

So rather than continuing with a confusing nomenclature, calling them metrocells or metro femto, enterprise cells, ultra femtos or microcells, they will all be members of the small cells family. Peter Yarich, research director with Current Analysis, predicted that small cells will be adopted as a group name, over a year ago, in a blog for Wilson Street.

Analysts Michelle Donnegan at Light Reading and Aditya Kaul at ABI Research, both recognize the need for a name change.

In the Forum’s own words, it will “address all small cells that operate in licensed spectrum, are operator-managed and feature edge-based intelligence – including what have been dubbed femtocells, picocells, microcells and metrocells. It will also support the crossover between small cells and other relevant technologies including: Wi-Fi, cloud RAN (which connects cellular radio to cloud-based intelligence over fibre), Distributed Antenna Systems, as well as macrocells as part of the new heterogeneous network (hetnet) environment.”

There’s also Wikipedia page explaining the variety of small cells technology, including WiMax, trusted Wi-Fi and DAS.

Here’s a video from Simon Saunders, chairman of the Small Cells Forum, talking about the new, wider remit:

Simon Saunders introducing the Small Cell Forum

Small cells growing up

This steady growth is attracting more and more operators to view small cells a keystone in meeting mobile broadband demand. Infonetics, which regularly monitors this market, interviewed operators that have deployed small cells in public or plan to during 2012. It found that in-building coverage and data optimization are the main drivers for operators deploying small cells, followed by the difficulty in expanding the macro network because of the challenges in adding new cell sites. Operators do see interference as a potential technical challenge, but not a barrier to adopting the technology. In fact, Infonetics believes that the operators it surveyed (already on the small cells wagon), have sufficient capabilities to run 12% of their network capacity on small cells this year.

“Clearly, femtocells are growing beyond their original residential target market, moving into public space coverage, and becoming a full member of the ‘small cells’ set…. we are at the beginning of the mobile world’s transition from macro-centric to the next generation environment of small cells augmenting the macro RAN as mobile operators attempt to deliver ubiquitous coverage and high capacity in areas of dense user population and high broadband usage,” said Richard Webb, directing analyst for mobile offload and mobile broadband devices at Infonetics Research.

Enterprising ideas

In addition to the operators’ plans with public small cells, Infonetics also surveyed plans for deploying enterprise femtocells.  Sixty percent had already done so, 30% will during the year, and the remaining 10% plan to next year.

“At this early stage, most operators are proceeding cautiously, launching enterprise femtocell solutions to improve in-building network coverage,…mobile voice call quality, and mobile data capacity. Once the basic needs of capacity and coverage are improved, the opportunity to sell other, more sophisticated FMC services will follow,” said Richard Webb.

Informa Telecoms & Media says that there are now 37 commercial deployments worldwide. Regional operator Mosaic Telecom is the lastest to join the ranks. CEO Rick Vergin discussed the network challenges his company faces at last year’s Femtocells World Summit. Informa noted that several operators had topped the 100,000 mark. The US is the most mature market – Sprint believes it will exceed 1 million femtocell sales by 2013 – because of the particular market dynamics there (i.e. nationwide brands but sometimes patchy local coverage). In Europe, Vodafone and SFR had both broken through the 100,000 barrier. Vodafone is committed to femtocells expansion having embarked on a new marketing campaign to residential and business users, and also announced plans to hang metro femtocells from BT’s telephone poles in rural locations.

LTE key to growth

With SK Telecom’s LTE service recently crossing the 500,000 subscribers mark, it is not surprising that it is moving quickly to launch LTE femtocells to provide indoor support for the LTE networks it plans to build in  84 cities by April. It’s LTE femtocells will be integrated with Wi-Fi in a single access point. It will feature power-over-Ethernet so can be deployed where power cabling isn’t available.

Pyramid Research reports that the spate of LTE networks now launched has propelled the proliferation of LTE devices. According to the analyst there are over 200 LTE devices available at the end of 2011,  a ten-fold increase on the previous year. Currently 60% of LTE devices are PC modems or routers, but the analyst expects this to be flip by 2016 when 339 million LTE devices will be handsets (57% of overall market).  In four years, the 200million LTE PC modems will represent 33% of the market and 45 million LTE tablets (8%). The remainder will be M2M devices. And what will these LTE devices be used for? Pyramid estimates that 40% of mobile broadband traffic will be mobile video, mostly streamed or user-generated.

I believe it is because there has been no compelling value proposition to motivate enterprises to consolidate contracts to a single, strategic supplier. Simply offering volume discounts has not been enough.

There has never been a cost effective product to service this market. However, enterprise grade small cells could be the could be the killer app for driving enterprises towards to a single supplier

This is because so much mobile traffic is now generated indoors. And yet as more and more employees use their mobiles at their desks, the quality of the calls drops.  This does not enamour an enterprise to choose any single mobile service provider when end users are unhappy with their experience and the enterprise is footing the bill for at-desk mobile calling (which is degrading in quality).

Unfortunately, it seems that the femtocell message is not always getting through to potential customers. Is it because they a just not interested in what’s on offer, or more likely, they’re just not being informed?

To find out which, Alcatel-Lucent commissioned a major seven country study to look at both small and large businesses’ attitudes to femtocells and the current service they are getting from their mobile operator.

Each market we selected to study had differing dynamics and was at different points of femtocell service launch. For example, we surveyed companies in the UK & Singapore where there have been femtocell consumer propositions for some time now. Spain was picked because there are two different operators offering femtocells to businesses. We also targeted Russia, Italy, and Australia where femtocells have only recently launched or soon to be.

I would like to share a few of the initial findings with you.

1) In-office performance is just as important as service quality out of the office. If companies believe call quality is very important in their choice of service provider, they rate in-office and out-of-office call quality similarly. Lesson for service providers: if your customers are not getting good service in the office, don’t be surprised if they churn.

Enterprise Femtocell survey Alcatel

3) Once the idea and potential for femtocells had been explained to them, most businesses got the idea pretty quickly. More than 60% said they would switch to an operator offering these services. Lesson for operators: Educate the market about femtocells. Don’t just wait for them to come you. When explained what femtocells are, most will say yes.

4) Don’t believe every iPhone used in offices is connected to the company Wi-Fi network. Many users don’t have Wi-Fi turned on or know the right password. Half of companies said that more than 25% of their cell phone bill is for mobile data generated while in the office. And enterprises tell us that while they use mobile data in the office, they are not happy with the performance. Lesson for operators: Discounted data rates (or even free) for mobile data consumed in offices will appeal to customers. If you want to do this without overloading your macro network and improving end-user experience, small cells are the only solution.

5) Companies want a more integrated communications set up. They want their mobile devices to interwork with corporate PBXs. Over 60% of businesses say they are interested in mobile extension. Lesson for operators: a femtocell can bring more than coverage and capacity, it can bring convenience and productivity gains to users.

These really are just a snap shot of our findings. Next month we will be sharing a deep dive into how businesses really are viewing their mobile service, and tips for operators in how to target them more effectively with small cell services.

By David Swift, senior product marketing manager, Wireless Networks Marketing & Strategy, Alcatel-Lucent

This year, the residential femtocell market has not seen the big launches it saw in the last few years from Vodafone, AT&T, or Sprint. Volumes will be well short of earlier expectations, probably by as much as 1 million-plus units. Vendors blame operators for not being active enough and operators blame vendors for not providing the right price.

Operators Move too Slowly, Vendors Don’t Carry Clout

The operators that have launched femtocells have been slow movers, not inclined to roll out femtocells in very large numbers. For them, femtocells are a Band-Aid, something to soothe frazzled customers with a coverage issue. We doubt many operators will imitate France’s SFR, which used femtocells as a competitive play – and even SFR has conservative estimates of femtocell shipments to its 3G customers, despite making them available to their complete 3G customer base free of charge.

Vendors have been marketing femtocell but to operators, investors, or analysts instead of to consumers. Small surprise that a recent ABI Research consumer survey revealed 80% of mobile users have never even heard about femtocells, as I highlighted in this earlier post.
Step in, Apple

In reality, the femtocell market needs an evangelist; not an operator and not a vendor, but someone who can truly break femtocells away from their shackles. Who’s the ideal candidate? Apple. The company is known for its simplistic, but revolutionary designs, its consumer-friendly products, and its anti-user-manual philosophy. Apple has single-handedly moved the mobile industry beyond mobile as a voice and text utility. It could work the same magic with femtocells.

Apple has a Wi-Fi access point called Airport Express. If it were femto-integrated, it would benefit Apple and its customers. The assumption is that Apple users switch to Wi-Fi indoors, but with a femto-integrated Airport Express, 3G/4G would become the primary connectivity option for iPad and iPhone – and Wi-Fi would be the secondary option, providing connectivity to other devices in the home.

Apple’s use of femtocell technology is a disruptive move that would go against operator interest. It could sell Airport Express independently as well as through the operators. A femto-integrated Airport Express would need a SIM that would help decouple the femtocell from the operator. The big difference would be Apple tying the femtocell into its other software and hardware products. Then, the femtocell’s functionality would become the mainstay rather than the box itself, which avoids the issue of end users hesitating to pay for the femto.

This move does have its regulatory issues and does imply that Apple could become a “base station” supplier. Even so, I think that if Apple adopted femtocell technology and integrate it into its strategy and products, it would help the femtocell industry and break femtocells from their current shackles.

Aditya Kaul, Practice Director, Mobile Networks

The Boostbox is on a invite only trial…there’s some photos here and yes they do look remarkably similar to the Vodafone SureSignal box.

I’m curious as to what this will do for competition (assuming O2 progresses to commercial rollout). Femtocells have certainly allowed Vodafone to steel an edge with some customers (those that want good coverage) and helped prevent existing customers with poor coverage churn to another one of the UK’s operators – such as Orange/T-Mobile, O2, Virgin or Tesco.  If O2 can do the same for its customers, will it stick at that? Or could the presence of rival femtocell services mean new pricing strategies for the boxes themselves, or within the homezone – maybe we will see free calls or free data with the femtozone as a way of differentiating? And what if all the big five offered residential femtos? Will differentiation then come in form factor (eg femto dongles for broadband routers) or cool applications and tie-ups with Facebook, Google, Yahoo etc.

Your thoughts, please….

There is now a Wikipedia page dedicated to small cells…please do have a read. Remember that Wikipedia is iterative and democractic…if you would like to add anything to the page, go ahead and contribute to the pool of knowledge.

As part of a new UK marketing campaign http://www.marketingweek.co.uk/sectors/telecoms-and-it/vodafone-launches-campaign-in-bid-to-increase-mobile-internet-use/3031468.articleVodafone recently announced that it will be encouraging its customers to use the mobile internet more often and get more out of their smartphones (and presumably download more apps).  Central to this is a big push for Sure Signal, its residential femtocell offering. The strapline reads, ““Another small thing that can mean the world”.

What’s interesting about this is how the femtocell has progressed from filling a hole to being seen as pillar in growing mobile broadband usage. Having been field proven, the femtocell has been promoted up the ranks.

It is refreshing that Vodafone is not embarrassed to say why you would need a femtocell. A web page explains the issues, in simple terms, and is not buried deep within the site. It sits right next to the product marketing literature. (http://www.vodafone.co.uk/personal/price-plans/network-and-coverage/sure-signal/blackspots-explained/index.htm). As Rupert Baines’ blog post (http://www.wilson-street.com/2011/10/are-operators-doing-enough-to-drive-femtocell-adoption-i-think-not/) recently pointed out, operators should be proud of their femtocell offerings, because femtocell customers have a net promoter score to shame consumer goods brands. If customers are not unhappy to be using a femtocell, why should an operator be embarrassed to provide one?

And in other femtocell news from Vodafone, the UK operator is seeking 12 communities to take part-in rural metrocell trials. (http://www.zdnet.co.uk/news/mobile-it/2011/11/03/vodafone-to-use-femtocells-to-boost-rural-3g-40094347/) The goal is to improve mobile coverage in villages that have poor reception by hanging open-access femtos from BT Openreach’s phone poles (which have power and are at the right height), and backhauling traffic over DSL. Future trials will feature other backhaul techniques such as microwave.

With the number of mobile devices, and the amount of data they consume, growing at an exponential rate, operators are increasingly looking to self-optimisation and heterogeneous networks combine to maximise the efficiency of their network infrastructure.

The point at which mobile operators begin to run out of capacity is no longer a theoretical debate. Wireless networks in the US, for instance, are reported to be operating at 80% capacity already.

A survey by Telepresence found that 63% of mobile network planners interviewed say they were already experiencing the effects of the crunch. Just over half (16 out of 30) report that increasing demand for data is related to service usage, while half (15 out of 30) describe it as having time-based peaks and troughs.

And this problem is unlikely to get any better as smartphone sales are still on the increase (Ovum reckons that 1.77 billion phones will ship in 2016 alone) and they are doing more. The Cisco Visual Networking Index predicts that the average smartphone will generate 1.3 GB of traffic each month.

To date, operators are increasingly using small cells to boost capacity in high density areas and smooth out peaks and troughs of demand. However, the deployment of isolated small cells will not itself solve the capacity crunch (see below).

LTE is sometimes seen as key to provide more capacity by more efficient use of spectrum, but it is still a limited resource. “Spectrum is just like gas. You don’t have enough,” said an executive at Deutsche Telekom at Broadband World Forum last year. If spectrum for LTE (and for that matter WCDMA) is not used in a different way, we will soon be hitting another glass ceiling as mobile broadband demand will continue to outstrip supply.

The ongoing capacity improvements will have to come from more a efficient network topology (the physical design of a network including the type of base stations used and where they are located).

While investment in LTE is growing rapidly, migration will not happen overnight. IHS communications analyst Jagdish Rebello says operators will need to evolve their networking architecture into a heterogeneous architecture involving a combination of macro cells, micro cells and small cells, co-existing with femto cells and WLAN (wireless local area network) mesh networks.

The heterogeneous network

In a conventional homogenous network, macro cells are deployed to deliver access. Each of these cells behaves in the same way, offering unrestricted access to a similar number of user terminals with broadly similar usage requirements. While sophisticated network planning systems are used to determine the optimum location for these cells, it is not easy to acquire new sites, particularly in urban areas.

Adding small cells to the network will improve coverage in so-called blackspots and ease congestion in high traffic areas, but their location is often chosen on a reactive basis by operators looking to ‘plug a gap’. This creates a problem when the macro and small cells are competing to serve each user terminal since unused signals are wasted, particularly in areas where the range of multiple cells overlap and also where the user is very close to a femto cell but not allowed to connect to it because they are not subscribed.

Research conducted by Alcatel-Lucent has confirmed that subscriber traffic is not distributed evenly around the area covered by a cell site, with the busiest sector accounting for as much as two thirds of all traffic. By employing advanced resource allocation systems and techniques for managing the interference created by ‘wasted’ signals, every cell operates at much higher levels of efficiency.

In simple terms, the objective of the heterogeneous network or hetnet is to improve spectral efficiency per unit area rather than per cell. It does this by combining different cell sizes (macro, pico, metro, femto) with different air interfaces (2G, 3G, 4G) to create ubiquitous coverage.

To get the different sizes and standards to work in a coherent fashion interference must be managed and new methods of backhaul deployed. On top of this, the cells need to be self-organising.

The role of self-organisation in hetnets

A heterogeneous network is not just about self-optimisation: interference management techniques, new backhaul technologies and operators’ network management systems also play an important role in improving network coverage and density.  But some would say that that self-organisation is the magic sauce.

A self-optimising network (SON) is a network that automatically configures and optimises itself during operation, reducing the need for manual intervention. One of the attractions of SON technology for operators is that the wide variety of technologies used in wireless networks makes it difficult to get a complete picture of how the network is performing and manage demand accordingly.

However, applying this technology to a small cell in the middle of the radio access network does not resolve the issue of how the cell will interact with macrocells without causing interference, which is why the work undertaken by standards bodies such as the 3rd Generation Partnership Project (3GPP) to integrate element of SON in the latest versions of LTE is so important.

The end result is a truly unified, intelligent network that maximises all the physical elements (including small cells) by implementing rules that route traffic onto the most appropriate network based on the content, cost and existing network traffic. In this scenario, operators can provide a uniform mobile data experience to users anywhere in their network.

The end result is a truly unified, intelligent network that maximises all the physical elements (including small cells) by implementing rules that route traffic onto the most appropriate network based on the content, cost and existing network traffic. In this scenario, operators can provide a uniform mobile data experience to users anywhere in their network.

Paul Golden is a writer with Futurity Media.

Mobile operators would like to deploy small cells, but their reaction to some of the early products has been lukewarm:

• Picocells that are simply low-power versions of a high-performance macrocell are far too expensive.
• Femtocells designed for autonomous consumer use are suited to a coverage application, and do not play well in a dense urban network.
• Small cells mounted on a streetlight need expensive backhaul, which is generally not available.

These negatives are beginning to evaporate.

Recently, several SoC suppliers have introduced multi-core processors which are highly suited to work as a “base station on a chip”. The level of integration is awesome, with dozens of processor cores operating at high speed, with programmable DSP elements and hardware accelerators to handle high-speed computation while remaining very flexible.

The multi-core architecture is the key to success now. Simple reliance on Moore’s law to increase speed continuously is not enough: to make a small cell work, dozens of operations need to take place simultaneously, and each processor core must be suited to the tasks assigned.  Several IC suppliers have recognized this need, resulting in strong products from Texas Instruments, Freescale, Mindspeed, Cavium, Picochip, Broadcom, and others.

Each company has its strengths, but all of these “Base Station on a Chip” products utilizes a large number of high-performance processor cores and an internal interconnection fabric.  Many of these alternatives can run the software from traditional macrocell or microcell products, making the integration with the macro network much easier.

The existence of 5-6 strong IC alternatives on the market will drive cost down quickly, and mobile operators will quickly start to see product offerings at acceptable cost levels….a few thousand dollars for a high-performance picocell or carrier femtocell.

The next question will quickly arise: What about backhaul?  Depending on the capacity and bandwidth involved, some of the new ICs on the market can actually handle baseband processing for both radio access and backhaul….taking a major expense out of the equation.

Mobile Experts is predicting a future where the “Base Station on a Chip” handles both datastreams, with RF transceivers branching in multiple directions.

The result:  Inexpensive, highly integrated small cells with multiple antennas, which can be deployed easily with licensed LTE operation to end users, and licensed TDD OFDM backhaul.  The chips are coming together.  Mobile operators need to start getting their backhaul spectrum licenses in order.

Joe Madden is principal analyst with Mobile Experts

It’s interesting to note just how diversified the business model has become. There are 22 services targeting consumers, 6 targeting enterprise, 4 that offer femtocells to both,  3 public femtocells and now a commercially live rural femtocell deployment.

There is a wide range of pricing strategies on offer. Most residential femtocells have a low upfront fee but enterprise femtocells can cost in excess of €1000, which reflects the site planning requirements and larger footprint.

Free femtocells are now on offer to high APRU customers of Softbank, Vodafone and Cosmote. SFR’s free femtocells are not ARPU dependent. ( A good analysis of the competitive pressures driving SFR’s decision can be found on the Think Femtocell blog.) Expect to see pricing vary even more as competitive femtocell services are launched into each market.

Back in June, Informa predicted that the femto market will rise from 2.3 million access points to 48 million access points by 2014. This contrasts with Idate’s recent prediction that there would be 40 million by 2015.

To date there have been no Wimax or LTE deployments, although carriers do say that small cells will be more crucial to LTE success than macro cells. Picochip estimates that for widespread coverage, London would need 70,000 LTE small cells, with 12,000 outdoors, 2,000 on the underground and the remaining 54,000 would in indoor open access femtocells.