WirelessMoves

Will Femtos Be More Successful than UMA?

Recently, Telecom Italia Mobile (TIM) and BT, two of the three tier one operators in Europe who've adopted Unlicensed Mobile Access (UMA) have decided to ditch the fixed/mobile convergence service. I wonder what that spells for the future uptake of 3G femtocells!?

While femtos are based on an entirely different technology, their value proposition seems to go in same direction: Replacement of the fixed line telephony service and better indoor coverage. Looks like users are not ready for it yet. So what's your opinion, why should femtos be more successful than UMA?

Femtocell Thoughts - Part 3

In part one of this miniseries on femtocells I've been looking at the benefits for mobile operators and part two covered the question why users would put a femtocell into their home. This final part looks at the technical background and hurdles and gives a conclusion.

In practice it is extremely important to integrate femtocells with DSL or cable modems for several reasons. First, femtocells are installed by the user and such an approach therefore ensures that the installation is easy and is done properly.

Additionally, an integrated device is the only way to ensure quality of service for the femtocell since data traffic generated by 3G voice calls must be prioritized on the fixed line link over any other traffic. If a femtocell was attached to an already existing DSL or cable router which already serves other users, uplink data traffic of these users could severely impact 3G voice calls since ordinary DSL or cable routers do not have quality of service (QoS) features to ensure that traffic from the femtocell is prioritized. This behavior can already be observed in practice today in other situations. If an ordinary DSL or cable router is used for a VoIP call in addition to a simultaneous file upload, voice quality is usually very bad due to the packet delay and insufficient bandwidth availability caused by the file transfer.

Thus, a mobile operator deploying femtocells ideally owns DSL or cable access as well or is at least partnering with a company owning such assets. This way a single fixed line gateway could be deployed with Wifi for PCs and other devices and a femto radio module for 3G mobile devices. The single phone per user idea also benefits from such an approach since owning or partnering for DSL or cable access removes the competition between fixed and wireless voice. This also ensures that a femtocell is only used in locations where the mobile operator has licenses to operate femtocells since they use licensed 3G frequency bands.

In practice it can be observed today that a number of mobile operators are taking this route already by either buying DSL access provider companies or at least partnering with them (e.g. Vodafone/Arcor or O2/Telefonica in Germany). It’s unlikely that this is done specifically to roll out 3G femtocells at a later stage but it seems that such companies have understood that it is vital for the future of a telecommunication company to have both wireless and fixed assets in order to stand a chance to be more than a mere bit-pipe for services running over the network. On a side note it is interesting to see the trend of splitting up fixed and mobile access into separate companies several years ago seems to revert now and pains of separation are now followed by pains of re-unification.

Another technical aspect concerning femtocells is interference. In 3G networks, cells usually all transmit on the same frequency and interference is managed by having enough space between them and by adjusting output power and antenna angles. Most 3G operators have at least two frequencies they can use so femtos could for example use the mostly unused second frequency. However, there is still an issue with interference between femtocells of users which live in the same apartment building and have thus installed their equipment close to each other. Left on its own this will result in lower capacity of each cell and might impact quality of service.

Conclusion

When looking at the arguments presented above, femtocells are not likely to be an immediate and outright success. A number of hardware evolutions will probably be needed before form factor, usability and quality of service are adequate. This is likely to take a couple of years. Also, mobile operators need to continue their path of buying or partnering with companies owning fixed line DSL or cable access. This will surely also not happen overnight. However, there is currently still enough capacity available in the macro layer of the network so femtocells are not immediately needed to reduce the load on the network. Therefore, the major immediate benefit of femtocells is improving in-house coverage especially in rural regions, which thus remains a niche market for now, since 2G and 3G coverage and capacity for urban users is usually sufficient for in-house coverage. As such the story of femtocells might parallel the evolution of UMA (Universal Mobile Access) which has similar goals but a completely different concept. That’s a story for another day however…

As always, comments are welcome.

Femtocell Thoughts - Part 2

In part one of this miniseries on femtocells I've been looking at the benefits for mobile operators. This part deals with why users would put a femtocell into their home.

From the user's point of view the advantages of femtocells are less clear to me. While the user shares all of the operator advantages discussed in a previous blog entry, increasing customer retention and thus churn is not necessarily in the interest of users since it could reduce competition. Also, it is unlikely that all family members use the same mobile operator and thus could benefit from a single femto cell.

In addition, mobile multimedia users are usually still early adopters which tend to use sophisticated phones, of which many include Wifi. With such phones a femto cell for multimedia content is not required since Wifi offers a similar or better experience for Internet content. Multimedia services offered by mobile network operators, however, are usually not available over Wifi which, from the end user perspective, is not a huge loss since early adopters tend to use Internet services rather than multimedia services of operators that are usually more expensive or come with limitations not acceptable to such users.

An advantage not mentioned before is that better 3G in-house penetration would increase call establishment success rate for 3G video calls since mobiles reselecting to the 2G network because reception quality is better can not be used for incoming or outgoing video calls. Thus, femtocells could become an important element in the future to make video calls more popular as the service still fights with the famous hen/egg problem of 3G network availability and number of users with compatible handsets.

Monetary incentives could persuade users to install femto cells. Operators could for example offer cheaper prices for voice calls that are handled via the femto cell. Also, the operator could propose to share revenue with femto ‘owners’ if other subscribers use the cell for voice and data communication instead of a macro cell.

Often the argument is brought forward that femtocells allow to market single phone solutions in which the user no longer has a fixed line phone and uses his mobile phone both at home and on the go. However, such solutions which use the macro layer instead of femtocells have already been available for several years in countries such as Germany (O2’s famous home zone for example) and are already very popular. Also, it is unlikely that mobile network operators would have competitive prices for all types of calls so many users would still use a SIP phone or software client on a PC for such calls at home. Calling a mobile number is still more expensive in most parts of the world excluding the U.S.A. than calling fixed line phones so single phone offers have to include a fixed line number for the mobile phone in order. Again, this is already done in practice for example by O2 in Germany for a number of years but femtocells might enable the mobile network operator to deliver such services cheaper than how it is currently done over the macro layer.

It should alsobe mentioned that using a femtocell would have a configuration and usability advantage over SIP Wifi phones. However, it is likely that the configuration process for SIP and Wifi on handsets will improve over the next few years thus decreasing this advantage.

To be continued

So much for now on the user's point of view on femtocells. In the third part, to come soon, I will take a look at the technical background and hurdles.

As always, comments are welcome!

Femtocell Thoughts - Part 1

There is currently a lot of hype around Femtocells, tiny user installable 3G cells for homes and offices. Surely an interesting technical concept but still with many question marks attached such as why would users want a 3G cell at home or at the office and what the benefits are for the operator. Here’s what I think:

Operator Benefits

3G networks are operated on the 2100 MHz frequency band in Europe and Asia and in the 1900 MHz band in the U.S. which is far from ideal for in-house coverage. Even in cities it can be observed that dual mode 2G/3G mobiles frequently attach to the 2G network because many GSM operators use the 900 MHz band in Europe which is much better suited for in-house coverage as lower frequencies penetrate walls much better. Some proponents of Femtocells claim that in-house coverage for voice calls are greatly improved by Femtocells. In cities however, this benefit is rather small since GSM in-house coverage is usually not an issue. The user on the other hand does not really care if his voice call is handled by the 2G or 3G network.

An improvement could be seen however in cases where the mobile can’t decide to stick with either the 2G or the 3G network due to changing 3G signal levels. This creates small availability outages while the mobile selects the other network type. During these times, incoming voice calls are either rejected or forwarded to voicemail.

Also, it can often be observed in practice that a mobile device with weak 3G in-house coverage changes to the 2G network once a connection to the Internet is established (e.g. to retrieve eMails or to browse the web on the mobile phone) and sometimes changes back to the 3G network during the connection. The reason for these ping pong network selections are the changing reception levels due to the mobility of the user and changing environmental conditions. Such network changes result in outage times which the user notices since an eMail takes longer to be delivered or because it takes a long time for a web page to be loaded.

Another solution to the issues described above is the use of the 900 MHz frequency band for 3G in Europe and Asia and the 850 MHz band in the U.S. It is likely that this will happen over the next few years since regulators more and more tend to open the 900 MHz band for 3G networks in Europe. It will take a number of years however before network operators will have deployed their 3G networks in those lower frequency ranges and until devices for these bands are available. It’s also likely that 900 MHz cells would first be used to cover rural areas instead of enhancing coverage in areas already covered by 3G in the 2100 MHz band. In the meantime, Femtocells definitely have the advantage.

As the above weaknesses of 3G in higher frequency bands show, femtocells can increase customer satisfaction. Putting a femtocell in the user’s home would have the additional advantage for network operators of reducing churn, i.e. customers changing contracts and changing the network operator in the process. Customer retention is all the more reinforced if the Femto comes in a bundle with DSL access as further described below since changing wireless contracts also has consequences for the fixed line Internet access at home.

Another advantage of femtocells is to reduce the gradual load increase on the 3G macro network as more people start using 3G terminals for voice and data connections. This could result in a cost benefit since if the right balance of macro and femtocells are reached, fewer expensive macro cells would be necessary to handle overall network traffic.

The question is how much these advantages are worth to a network operator since Femtocells do not come for free!?

More to come

So much for now. Part 2 to come soon deals with why users would put a 3G femotcells into their home and part 3 will look at the technical background and hurdles for femtocells.

As always, comments are welcome!