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Femtocells -- Picking up where the Macro Network Left Off

by Alan Lefkof, Corporate Vice President, Motorola Broadband Solutions Group

     
6/25/2008
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Dropped calls, spotty reception or the dreaded no service zone - everyone has experienced one if not all of these inconveniences while talking on their cell phone. It's a common, sometimes daily, occurrence for many users. Yet more and more people have opted to completely drop their landline and survive with only their cell phone. In fact, according to a recent Yankee Group study, 33 million American currently only use cell phones at home – a number that's expected to grow with the increased affinity for mobile experiences. And we're already beginning to see how this impacts operator offerings, as landlines are decoupled from bundled services.

Consumers, especially younger consumers, are in part responsible for driving this trend. A recent Motorola survey among 1,000 U.S. adults ages 16-27 found that the majority of them – 67 percent – felt "naked" without a functioning cell phone. This group has certainly increased cell phone usage within the home, and their current indoor coverage is not always satisfactory for some wireless networks. These consumer needs combined with operators' desire to reduce backhaul cost, make for an environment where femtocells become a common household name.

Femtocells are low-power, wireless access points that operate in the home or small office to connect standard mobile devices to a wireless operator's network using residential DSL or cable broadband connections. Basically, these devices enhance the wireless signal and make dropped calls, spotty reception or "no service" a thing of the past.

Femtocells have been said to be one of the most exciting developments in home networking since the arrival of Wi-Fi and it's easy to understand why. The adoption of femtocells can lead to an enhanced end-user experience, which in turn will strengthen the operator's position in the home and enterprise markets.

How Femtocells work

Once installed in a customer's home, femtocells enable the operator to provide higher-quality and higher-performance wireless voice and real-time data services to their customers inside their homes. And femtocell installation is simple; "plug and play" installation capability in combination with remote device management and discovery makes femtocells truly zero touch.

Femtocells also mean less strain on the macro cell network – offloading traffic to the consumers' femtocell. Not only is this a practical way to target coverage zones, it's a cost-saving measure, since the consumer's call from home will now be made on their lower-cost broadband connections.

Today, 3G is largely the focus for femtocell technology. The full 3G service set can be delivered in the home from a small, stylish device, which is connected to the mobile operator's core network using open 3GPP based standards via the consumer's HFC.

Consumer's go mobile in a traditionally non-mobile environment

According to ABI Research, by 2011 106 million subscribers will utilize 36 million femtocells. This statistic shouldn't be surprising given the mobile market boom that is occurring. But how do we get there? According to Mobile Industry Outlook there will be 4 billion subscribers to the mobile market by 2011, and many of these subscribers will have increased their cell phone usage in home and office environments, making an ideal setting for femtocell roll-out.

Consumer benefits will also drive adoption, including:

  • High-quality coverage: Once consumers enter their homes, they will seamlessly be connected to the femtocell network. This is especially convenient for consumers who suffer from poor or no service within their homes and are constantly having to battle with bad cell phone reception. Stronger signals will equal clearer voice calls.

  • Low-cost voice and data calls: Consumers no longer have to worry about running over their monthly allowance of minutes — femtocells can virtually end the dreaded overage fees that have become unpleasant surprises at the end of each month with reduced in home call charges.

  • Plug and play: No one enjoys being on the phone with their service provider trying to install their equipment or, worse yet, having to wait around all day for someone to come to their home and install the device. Femtocells installation can be effortless with remote device management and discovery, and consumers will simply plug the device in for quick set-up.

  • One phone, contact book, bill: Convenience and simplicity are two major drivers for any new technology on the market and femtocells will not be an exception. One phone in consumers' households means one bill and one contact book, and with integration with fixed phone services femtocells can provide dual phone ringing.

  • Media sharing and data off-load: Femtocells, integrated with broadband home gateways, give consumers the ability to transport their media all around their home between their mobile, PC and IPTV, creating a truly connected home environment.

Operators enjoy greater stickiness

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Consumers aren't the only ones who can benefit from widespread femtocell deployment. Femtocells are gateways to a wireless operator's network and strengthen operator's position in the home and enterprise markets. Operators will be able to benefit from:

  • Reduced churn: Triple and quad play services are proven ways to reduce churn among subscribers. Femtocells give operator the ability to provide voice and mobile data all from one device. With the ability to converge all media onto one device, femtocells provide operators with the opportunity to increase their market share.

  • Network cost reduction: Femtocells provide operators with a lower cost solution than macro expansion and more targeted coverage.

  • Remote management: The ability to manage femtocells remotely provides less customer frustration, resulting in reduced turnover and fewer truck rolls, which in turn increase revenue. Remote management capabilities include remotely adding new services, firmware upgrades, remote troubleshooting, access control management, remote configuration and location awareness

  • Backhaul management: Femtocells use consumers' broadband connections for backhaul, taking the pressure off the operator's network.

  • Low power: Femtocells are low power and self-configuring to minimize interference

The Requirements for Femtocell Deployment

Femtocells will deliver home broadband communication like never before by enabling personal devices to perform seamlessly in and out of the home. Motorola is currently conducting femtocell trials and expect roll out in the first part of 2009.

But in order to make femtocells a reality there are a variety of "must haves." It must perform in a hostile RF environment. It must meet the high expectations of a mature cellular subscriber base. It must integrate seamlessly with existing access networks and broadband home gateways. It must be capable of being deployed and supported in high volume. It must extract maximum performance from backhaul. And it must be capable of being remotely managed without excessive operator effort

These "must have" attributes are required for any operator to put and end-to-end femtocell solution in place that will increase ARPU, grow market share, and enable partnerships with wireless service providers. Once these requirements are addressed, femtocells will be well on their way to becoming a household name.

About the Author

Alan Lefkof joined Motorola as Corporate Vice President and General Manager in February 2007.  Mr. Lefkof oversees the development of Motorola's Cable, xDSL and VoIP Broadband Customer Premise Equipment (CPE) as well as Remote Management Software for Carrier Service Assurance.  

Prior to Motorola, Mr. Lefkof was President and CEO of Netopia, Inc. for 13 years.  Prior to joining Netopia, Lefkof served as President of GRiD Systems, and as a Management Consultant at McKinsey & Company.  

Lefkof received a B.S. from the Massachusetts Institute of Technology in 1975 and an M.B.A. from Harvard Business School in 1977.  

Lefkof is a seasoned speaker and has presented at numerous conferences throughout his career. Most recently he has been a featured speaker at Needham & Company Annual Growth Conference in 2005 and 2004; FastNet Futures 2004; Piper Jaffray Technology Conference 2004; AeA Micro Cap Financial Conference 2004; Kaufman Brothers Communications, Media and Technology Conference 2003 and 2002.

About Motorola

Motorola is known around the world for innovation in communications. The company develops technologies, products and services that make mobile experiences possible. Our portfolio includes communications infrastructure, enterprise mobility solutions, digital set-tops, cable modems, mobile devices and Bluetooth accessories. Motorola is committed to delivering next generation communication solutions to people, businesses and governments. A Fortune 100 company with global presence and impact, Motorola had sales of US $36.6 billion in 2007

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