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Femtocells to the Rescue? Operators, Be Careful with the Rollout (Part 2 of 3)

TMCnews Featured Article


October 12, 2009

Femtocells to the Rescue? Operators, Be Careful with the Rollout (Part 2 of 3)

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


(Editor’s Note: Part 1 of this series can be found here.)


 

Part 2 – The Benefits of Femtocells (News - Alert) for Operators and Their Subscribers

 

In Part 1, the need for mobile operators to provide indoor coverage was discussed. As femtocells provide excellent in-building coverage, new femto-based “family” tariffs for households can enable minutes to be taken from both competitive mobile networks and fixed-line operators, and also help to reduce churn.

 

For subscribers, cheaper or even free home mobile calls plus data over mobile at home or in the office remove the need for different landline and mobile phone numbers with all the convenience of one mobile device. The loyalty to the mobile operator is therefore strengthened.

 

The extra voice traffic will be handled by the additional radio capacity created by the femtocell. However, the 3GPP2 markets (for example, the United States) already realize new service revenue from their CDMA 1x femto deployments, as the 3GPP2 standards use IMS for the core network component of the solution.

 

This architecture means that the existing core network of MSCs (mobile switching centers)and GSNs (General Packet Radio Service support nodes) do not have to process the significantly more intensive usage patterns from indoor mobile users. Mobile network voice usually has an average voice call holding time of 90 seconds. For the indoor fixed market, this figure tends towards an average of seven minutes. Hence, the 3GPP operators, who cannot take advantage of the IMS core component due to a lack of progress on those standards, will need to add investment into their existing MSC (News - Alert) and GSN network at higher cost than IMS, and will not be able to take advantage of additional femto-based services.

 

Femtocells will play a similarly major part when it comes to rolling out the next evolution in mobile technology. LTE (News - Alert) networks require anything from twice to four times the number of base stations as a 3G/HSPA network to provide coverage to the same size area. Therefore, operators will need to use picocells and femtocells, and new deployment techniques to deliver a cost-effective alternative to more expensive macro cell sites, particularly when it comes to delivering LTE to where subscribers will use it the most – indoors.

 

Many operators are already stating that for a mass roll-out success, LTE requires a pico and femto capability for both indoor and outdoor deployments. The issue is that this roll-out will also depend on successful roll-out of local loop fiber (FTTx), if the full capability of the LTE broadband radio interface is to be realized.

 

The market looks set to adopt femtocells with enthusiasm. In the United States, AT&T (News - Alert) is testing femtocells for use with its service and conducted a larger “city-sized” trial in the second quarter of this year. In Europe, Vodafone (News - Alert) announced a commercial launch in July with the unit free on selected tariffs and an entry level tariff that includes an HSPA-capable handset. While consumer adoption of these femtocells has been slow despite high marks from product review writers on the ease of installation, some industry analysts attribute this lackluster sales performance to disparate pricing that Vodafone established between retail consumers and enterprise customers, who pay approximately twice the price for the product. Once this pricing issue resolves itself, and the launch price already has been discounted £30 for target customers in recent weeks, Vodafone’s femtocell adoption should rise.

 

However, growing consumer adoption and the consequential roll-out of the technology bring a variety of new and complex challenges for operators, on both a network planning and management level.


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Edited by Michael Dinan







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