Femtocells are low power 3G/4G cellular base stations which can be thought of as wireless Access Points (AP’s). Instead of a WiFi Access Point we’re all familiar with, a femtocell could be a UMTS, CDMA/EVDO, LTE, or Mobile WiMAX Access Point, depending on the underlying mobile network technology. The bi-directional voice and data traffic is taken off the respective wireless network and placed on the Broadband Internet connection at the home or office. Femtocell suppliers claim they’ll be capable of communicating at 3G (HSDPA) and 4G (LTE, mobile WiMAX) speeds, depending on the bandwidth of the broadband Internet connection (which could be a bottleneck).
Femtocells will provide mobile handset and notebook PC coverage in a home or business with typically 2- 4 simultaneously active users. Picocells are larger APs designed for enterprise use, with higher output power, to handle more simultaneous users. No changes are required to the handset, notebook PC, or other mobile devices, [the SIM card in a mobile device might be programmed to authenticate the user]. The residential and enterprise femtocell markets have very different requirements and operators will likely target one of those market segments. Some carriers see the need for enterprise femtocells creating a bigger market opportunity than residential. With few exceptions (e.g. T- Mobile USA), femtocells are preferred to WiFi APs by mobile carriers.
Definition: Here is a link to the Wikipedia definition:
The Femto Forum is a not-for-profit membership organization founded in 2007, to promote femtocell deployment worldwide. They have published results of a comprehensive study project, which shows a positive femtocell business case:
Here is another useful web site: http://www.thinkfemtocell.com/
On March 17th 2009 the WCA Mobile SIG sponsored a panel on Femtocell technology and business models. The participants were as follows:
Moderator and Presenter: Stefan Scheinert, Principal, Scheinert Telecom
— Peter Walther, Product Manager, mimoOn
— Dror Nahumi, Partner, Norwest Venture Partners
— Behzad Mohebbi, CTO, Nextivity
— Tom McQuade, VP NA Sales, picoChip
— Michelle Pampin, Wireless Backhaul Specialist
One primary goal of femtocells is to take traffic off the mobile network, which operators have paid a substantial spectrum license fee to own and use for mobile services. With more and more voice and data traffic originating or terminating in homes or offices, this would free up spectrum for users on the move. It could permit more mobile users per cell site, OR smaller and cheaper base stations (with less output power), OR higher speeds per mobile user. However, this is all dependent on the broadband Internet connection and ISP policy regarding femtocell traffic. For example, a DSL connection would probably not provide enough bandwidth to carry traffic from multiple home or enterprise femtocell users. If the ISP is not the same as the mobile provider, it could block the traffic or at least throttle it back (e.g. Comcast and Bit Torrent). Why should the ISP give a free ride for traffic that would otherwise be on the mobile operator’s network?
Are femtocells the answer? There are several competing technologies, including:
· Unlicensed Mobile Access or UMA (WiFi based)- As noted earlier in this article, T Mobile is using this approach to provide VoIP over WiFi in the home, with GSM cellular voice outside. Users get dual mode handsets and calls automatically switch from one wireless medium to the other. But we suspect this might be a stop-gap measure until femtocells are ready for commercial deployment (see below).
· Macro Base Stations– with more output power: Seimens, Nokia, Ericsson are expected to build these higher throughput Base Stations (with up to 300 M bit/sec aggregate data rate).
· Repeaters– favored over femtocells when there is no high speed backhaul available, or the operators do not want to use femtocells. It was stated that LTE will likely use repeaters, rather then femtocells, due to higher speeds not supported by the broadband Internet connection. Vodafone, which has also conducted femtocell trials in a number of European countries, is said to be expanding its trials of repeaters in several European locations, although the company has admitted it would continue to evaluate both femtocells and repeaters.
Market Assessment: Norwest Venture Partners believes these different alternatives have created enough confusion to delay the femtocell market. As a result, the market has been slow to take off and difficult to justify. And even if the market for femtocells picks up, it might be difficult for a start-up to make money.
Voice over LTE: The current 3GPP release 8 specifies LTE as an all IP network, but does not include support for a voice codec. Most likely, voice will be offered via GSM or CDMA codecs, or a Skype like VoIP over LTE service. 3GPP Release 9 or 10 will specify voice codecs for use with LTE.
Here are a few critical issues/ checklist for femtocell deployment
(Source: Stefan Scheinert):
· Femtocell AP Box cost should be < $100
· Location awareness required, because Femtocells use licensed spectrum
· Macro network interference (from other femtocells and outside mobile network cells) requires dynamic management, i.e. an interference detector/sniffer to measure power strength of neighboring cells.
· Security and integrity of femtocell traffic over the Internet using the femtocell backhaul or broadband Internet connection.
· Plug and play with auto configuration on power up.
Author’s Opinion: Another issue (similar to WiFi free-loading) is how to ensure individual femtocells are only accessible to the homeowner or business paying the bills. Some type of automatic authentication will be required prior to use. And there is a national security issue as well- how operators can comply with regulations that allow for the interception of cell phone calls by law enforcement agencies?
Deployment of Femtocells:
There are a large number of operators participating in the Femto Forum, which augurs for actual deployment in the near future. Picochip stated that they have licensed their femtocell technology to IP Access, which is working with Cisco to get femtocells deployed at AT&T. Cisco is contributing Self Organizing Network software to this femtocell initiative. Three cities trials were said to take place in 3Q 09 with commercial deployment scheduled for 4Q09. In checking with my trusted colleague at AT&T, I was told that currently there are internal femtocell trials within the company, but nothing else has been announced.
We hear that there are many carrier field trials of femtocells, but no results have been announced. Many different variants of femtocell technologies are being trialed, according to our privileged sources. For example, T-Mobile (which has deployed VoIP over WiFi in the U.S.) has completed several trials with femtocells, and invested in the UK-based femtocell manufacturer Ubiquisys. It is said that the company plans to launch a commercial service using the technology by mid-year in Germany.
“Femtocell rollouts to date have been limited, controlled ones,” said Aditya Kaul, an ABI Research senior analyst. “Shipments at the end of 2008 were in the few hundred thousands, and at the end of 2009 should climb towards a million but will fall short.” ABI Research expects that 2010 will see shipments climbing well above a million units. Indeed, vendors are gearing up for a big push, Kaul said. One of the industry’s main silicon suppliers, PicoChip recently announced a multi-million dollar injection of funding. Kaul said he expects that the funding will “probably be geared toward a ramp-up and that there is “a lot of similar activity behind the scenes, and new partnerships which point to preparation for a major market expansion.”
Late in 2009 or early in 2010, ABI Research said it expects an announcement of a multi-city commercial femtocell deployment by one of the major mobile operators, which may encourage other operators to follow suite. Until now, large-scale femtocell deployments have only been simulated in computer models: real-world rollouts could pose challenges.
Price is one: ABI Research believes that although femtocell business models could be enabled at various price points, low-cost femtocells (under $100) are essential to bridge the gap between niche market and mass-market deployments.
Nonetheless, “These challenges are all valid, but none of them are show-stoppers – there’s no ‘elephant in the room’ that will pose a major obstacle to large-scale deployment,” according to Kaul. For more information, please see:
Recession Slows Femtocell Deployments, but Only Temporarily, According to ABI Research
There was some uncertainty expressed by the panelists, as to which network operator would actually deploy and maintain the femtocells. We think it will be the mobile operator that is offloading network traffic and providing better indoor reception to its customers. But Michelle Pampin, Wireless Backhaul Specialist, stated that it would be the provider of the broadband Internet service (who controls the QoS for the femtocell traffic that’s backhauled to the public Internet). Panel Moderator StefanScheinert told me privately that Michelle was not correct, i.e. that the mobile operator would own and sell the femtocells to end users/ enterprises.
Here’s a chart of Femtocell Deployment status in Europe:
Any WiMAX Femtocells?
There has been a lot of speculation about Comcast providing femtocells for its mobile WiMAX deployment (reseller agreement in Portland, OR announced and several cities have been targeted for mobile WiMAX build-outs. But at this time, there are more questions than answers.
Comcast initially said that femtocells would be part of its WiMAX strategy, but nothing was said about it when its Portland,OR WiMAX service was announced last week (reselling Clearwire’s CLEAR). Comcast’s Sr VP for wireless and technology, Dave Williams, said in June 2008 that a key element of the Clearwire investment and partnership was to reserve 5 MHz of spectrum for WiMax femtocell deployments. That spectrum would also be available for use by any of the Clearwire consortium members, which includes Comcast, fellow cable MSOs Bright House Networks and Time Warner Cable Inc. as well as Google and Intel Corp.
“We’ll be pushing WiMax femtocells because we have a good customer base in the home — we sell HDTV, VOIP, and high-speed Internet connectivity. We want to take that experience in the home and add mobility,” Williams told Unstrung at the time. But Comcast has not said anything more about WiMAX femtocells- at least not publicly. For more on this topic, please refer to: http://www.unstrung.com/document.asp?doc_id=173652
Conclusions and Companies to Watch:
As with so many new technologies, the jury is still out on femtocells especially for Mobile WiMAX, which has yet to establish a critical mass of subscribers. We are most concerned about the broadband Internet connection being a potential bottleneck (especially if it is DSL) and the broadband ISP blocking, metering or restricting femtocell traffic on its network. Stefan does not think the ISP will actually block femtocell traffic (note that the FCC fined Comcast for doing this). So there is a likely to be some contractual agreement between the mobile operator supplying the femtocells and the broadband ISP.
We would watch PicoChip, which appears to have leading edge femtocell technology. Please see this overview and ecosystem report:
Percello is an Israeli start-up femtocell manufacturer to also keep an eye on. They are designing a low-cost, high performance femtocell 3G W-CDMA baseband processor chip. Please refer to: