It seems that the whole industry’s gone femto crazy this week. And it’s largely the fault of the Femto Forum, which after getting off to a bit of a wobbly start three or four months ago, has come up smelling of roses with the backing of the major infrastructure players.

Femtocells look like they could be a big business for all concerned, representing a massive global opportunity for vendors, operators, content providers and consumers. According to Pyramid, the femtocell opportunity represents 30 per cent of the total 3G subscriber base by the end of 2010, two years after the expected commercial launch.

And given the disappointing results from the infrastructure vendors in the last quarter, I wonder if femtocells and picocells represent a decent revenue stream for the kit makers. It certainly looks like operators see them as an important mechanism for improving network performance and controlling infrastructure costs.

Check out our focus on femtocells.


  1. Avatar Kedar Thakar 06/11/2007 @ 5:00 pm

    Femto cells is great concept but I wonder if it has come too late.

    Handsets on Wi-fi/3G are maturing and price point is coming down. this offering has much broader reach and appeal compared to 3G femtocells.

    This doesn’t mean that they are not useful. After 90% population coverage, adding incremental coverage is very expensive. In such case, femto cells are very attractive. Also, they are useful for improving poor indoor coverage in certain areas.

  2. Avatar Rajiv Chaudhuri 09/11/2007 @ 2:17 am

    I agree that, the concept is great, but its long term future is uncertain at this point.

    In particular, what architecture would prevail is a big question mark – modified RNC, all IP architecture or collapsed architecture. The RNC constraints need to be carefully addressed for higher scalability and resiliency for the Femto cells based WCDMA network.

    A major operator concern with Femto cells deployment is the base station security issue at the customer premises. However, this doesn’t mean that, there is no solution possible.
    Ideally, Femto cells solution architecture should be addressed through 3GPP LTE plot. That way, there will be more flexibility to deploy an all IP architecture with low cost Femto cells being integrated into DSL or HFC gateway. The user traffic can be back-hauled via the fixed network into a common IP Core bypassing the SGSN.

  3. Avatar Ian Goetz 12/11/2007 @ 3:31 pm

    The two respondees raise valid points. WiFi enabled devices are maturing but two crucial issues remain, the first is number of devices for consumer choice. Most WiFi Devices are in the business phone sector and not attractively priced in the consumer segment targetted by Femto cells. There is also the issue for cellular to WiFi handover – only UMA has truly cracked this issue and most WiFi devices are not UMA capable.

    The architecture point is also valid, using an IuB over IP to a standard RNC for femto will never allow true volume deployment due to the limited throughput of the RNC, those femto cell vendors offering a collapsed architecture, in effect and early version of the LTE Node E and those with the UMA based architecture are able to address both throughput and volume deployment.

    These devices are the mobile approach to convergence, deploying 3G capacity where it is needed – in-building, with a model where much of the cost of providing that capacity has been covered by the mobile customer who can still use the standard 3G device.

  4. Avatar Ravi Gurnani 12/11/2007 @ 9:59 pm

    Femtos have a bright future mainly due to following reasons:

    1. In-house/in-office wireless coverage is still unstable or inconsistent. Femtos mitigate this problem and provide a “under-the-tower” quality.

    2. Though Wi-Fi is a good and already available alternative, its predominantly associated with Laptops (ofcourse there are WiFe cellphones as well). With evolved CDMA or GSM/UMTS technologies, corresponding Femtos provide you the luxury of using the “cell-phone” for “voice” as well as “data”.

  5. Avatar Rajiv Chaudhuri 14/11/2007 @ 3:23 am

    Femto Cells solution direction seems to be intricately linked with the FMC strategy. The role of DSL and Cable is of paramount importance for Femtos success, because these fixed access technologies could provide low-cost backhaul solution to deliver mobile data and voice into the all IP architecture.

    There will some architecture challenges though, as to how fixed and mobile subscribers will be handled in the IP network in relation with authentication, QoS and policy management. One possible business model with Femtos will be to eliminate the need for fixed connection altogether from the customer home. Such approach would simplify or even in some cases initiate the withdrawal of fixed subscriber management function from the Broadband service edge. This is a cost effective infrastructure strategy to deliver a “best fit” DSL or cable backhaul for Femtos based WCDMA mobile voice and data.

    Femtos open up a real possibility for an integrated digital home solution, but would require some far reaching changes at the Broadband Edge to adapt to the new business model. If this happens, Femtos could deliver a competitive edge to the mobile operators over their fixed network rivals.

  6. Avatar Todd Spraggins 14/11/2007 @ 3:58 pm

    Femto sounds great for voice, but what about data? Does the enterprise really want its data going back out to a public node given privacy (HIPA) and other “compliance” concerns. And what if all I want to do is stream off of my itunes server locally. I think the Teleware solution mentioned in the article https://www.telecoms.com/itmgcontent/tcoms/news/articles/20017393694.html gets close to a better route optimization problem, but again only for voice.
    Finally, I wonder if we have not started another VHS/betamax war. Femto might be a superior technology from several angles (battery, spectral efficiency, quality, seamless HO), but WiFi can be controlled by the end user and is essentially ubiquitous.

  7. Avatar Andy Tiller 15/11/2007 @ 4:18 pm

    A key issue is the need for service continuity between the indoor and outdoor networks. If these are both the same network (i.e. the femtocell scenario), then service continuity comes for free.

    If the networks are different (i.e. the WiFi dual mode scenario), then you need extra technology to make sure users can access the same services on the two networks using the same applications on the phone with the same settings. Mass market consumers are unlikely to want to change their browser settings when switching over from the cellular to the WiFi network.

    UMA solves this issue, but the handset choice is poor. And all UMA handsets today are 2G, which means that they don’t have the horsepower to handle high-speed data. This explains why dual-mode offerings are all about cheap voice calls in WiFi hotspots, rather than about “WiFi-speed” data on your phone.

    3G UMA is coming, but by the time we see the handsets 3G femtocells will be a viable alternative.

  8. Avatar Moh Yan 16/11/2007 @ 5:43 pm

    As someone who has worked on development for clients
    producing femto-cell systems, I can tell you
    architecture is a significant issue (although my client
    has solved some crucial aspects very nicely indeed) .

    The service patterns (bit rates, concurrent users etc)
    are actually not that big a problem, being more
    constrained by the capabilities of the CPE, and the
    bit rates supported by the subscriber Internet
    connection (which may be competing for resources needed
    by surfing, IPTV etc) .

    However, the big issues are on the systems engineering
    side. The cell management issue (topology, neighbour
    cell lists on a per-terminal as opposed to per-cell
    basis, downlink scrambling code reuse etc) is a real
    killer for networks of potentially 100,000s of cells
    that may come and go as easily as a customer switching
    on/off the CPE.

    Quite a bit of work will be needed to define/
    standardise the C-plane/OAM interfaces to control
    things such as handover from macro to femto etc.
    But from I have seen, worked on, and know, the missing
    bits are not too far away.

  9. Avatar Rajiv Chaudhuri 18/11/2007 @ 1:43 am

    Femtos open up an interesting debate who will be responsible for the management of base-stations at the customer premises. Whether,a mobile customer is a retail or a business entity, ideally the base-station management should be performed by the operators themselves. The reason being, mobile operators need to ensure, Quality of Experience (QoE) must exceed customer expectations on the service offerings for delivering a viable business proposition with this new technology. Moreover, any chosen business model must guarantee an efficient spectrum utilisation, the most expensive element of the mobile market value chain.
    Interestingly, In order to deliver premium application services over the fixed broadband network, world’s leading operators are actively pursuing a pragmatic strategy, where they are responsible for managing service offering end to end. The customer home gateway is considered as a key network element into such integrated service management plot.
    In like vein, why not, a similar strategy be adopted to deliver voice and data applications using Femtocells over WCDMA/HSPDA+ ? Operators must control the last mile of the wireless access at the customer home.

  10. Avatar Moh Yan 20/11/2007 @ 5:30 pm

    Regarding OAM aspects of femto-cells, the end-user device is more akin to a CPE (DSL modem etc) than a
    canonical base station. Obviously things such as UMTS frequencies, scrambling codes, power levels etc are ostensibly controlled by the operator, but this is not the “cell site” concept.

    A more appropriate comparison is to an 802.11x box.
    It either works or doesn’t. If signal reception is poor
    in the premises, move the box to a better position.
    you don’t get an operator doing a terrain simulation of
    your house, nor a field engineer visiting to adjust
    antenna tilt etc.

    Regarding QoS/QoE aspects, the services invoked by a
    user are required at worst to be comparable to that
    experienced in the macro network. The (literal) weak
    link is not the radio aspects (although coverage etc
    by the CPE is not a totally solved problem) , but the
    IP connection between the core network and the CPE.
    For residential subscribers, this is likely to be an
    xDSL link (with all the issues therein) .

    And a link not dedicated to the femto env either.
    Web browsing, IPTV, gaming etc all will be potentially
    making demands of that link. So mobile operators will
    be expecting QoS interfaces of access network operators
    that are much more than “best efforts” . Which is supposed to be a key feature of the “converged” network is it not.

    This begs the question of whether mobile operators
    who are not part of a company with its own access
    network division (networks and/or LLU experience) will
    have their femto dreams smashed by an access provider
    not up to the job. Think of the UK, with a Vodafone
    having to guarantee QoS in an LLU env that inter-
    works with a (pre-21CN) BT Openreach outfit.

  11. Avatar Rajiv Chaudhuri 21/11/2007 @ 6:45 am

    A Femto CPE model is still evolving, so mandating any particular direction may be premature at this point. Having said so though, I would imagine at least for any enterprise deployment, both radio and IP parts will be managed by the operators. Enterprise customers will be reluctant to play an active part with this relatively new technology, as their efforts can be better utilised elsewhere. The SLAs are going to enforced depending on what applications will be run in the enterprise network over the carrier WAN. In the residential context, jury is still tryig out as to what is the best way forward.
    Regarding QoS/QoE, I have got a more optimistic view. In a global context, mobile operators could leverage from ULL/LLU arrangements to deploy their own DSL IP infrastructure or enter into some kind of network sharing arrangement with the incumbent Carriage Service Providers. Truly speaking, they don’t need to own the last mile, instead use their own IP core by putting DLSAMs at the incumbent exchange. Although, one IP network sounds simple, Femto architectural and deployment challenges are daunting but not insurmountable moving forward.

  12. Avatar Dimitris Mavrakis 02/12/2007 @ 11:03 pm

    I think we can all agree that past the fanfare, femto cells have way to go in order to evolve (technologically) without being overly fragmented. There are too much uncertainty and issues facing them at the moment.

    Also, I do not think that femto cells compete with dual terminal solutions (cellular/WiFi, UMA etc) since the end user simply uses the same mobile phone and could be unaware of the transition. This gives femto cells tremendous pull in the common end user market, while dual terminals are more suitable for business users.

    I have written an article on what I think on femto cells on:

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