Wednesday, February 10, 2010

Blueprint: Femtocells and LTE Symbiosis

by Sanket S. Nesargi, Senior Marketing Manager

Both LTE and Femtocells have received much attention in the industry press. While LTE has been accepted as the undisputed future of macro wireless networks, Femtocells have been seen as the technology that will help service providers address critical issues such as coverage and capacity. Moreover, while both technologies have received support and commitments from major service providers, the question of commercial uptake and return-on-investment still looms large in the minds of many service providers. This article will elaborate upon why LTE femtocells  make great business sense, and how a symbiotic relationship between these two technologies can drive market adoption and enable next generation wireless services.

LTE promises to revolutionize the mobile broadband landscape with data throughput in the range of 86 Mbps to 172 Mbps. This guarantee is enabled by a completely re-worked air-interface and a "flattening" of core network infrastructure to reduce latency and minimize transport technologies across the network. What this also means for service providers is that LTE is a big ticket both in terms of CAPEX, due to the rip-and-replace nature of its installation, and also in terms of OPEX due to the deployment and interoperability concerns that need to be accounted for. Thus, operators need to carefully plan their LTE deployment strategy based on geographic demand characteristics and uptake potential.

Femtocells have been envisioned as the one solution that can help service providers address their capacity and coverage issues. Buoyed by the increasing amounts of mobile data and voice traffic, ABI Research expects that by the end of 2014, there will be 39.97 million femtocells  deployed worldwide, serving 132 million subscribers . The benefits of femtocells  -- in terms of plugging coverage holes, as well as offloading capacity from the already strained mobile operator networks are well known -- these benefits take on a different dimension when considered in conjunction with LTE.

As operators determine the best deployment model to roll out LTE, it has been envisioned that femtocells  offer an ideal solution by which, rather than spending enormous CAPEX on deploying a LTE macro network, operators can use LTE femtocells  for localized deployments and test waters in terms of performance, service uptake, interoperability, and so on. Macro networks can be subsequently migrated to LTE based on the lessons learned from the initial Femtocell-based deployments. ABI Research senior analyst Nadine Manjaro writes:

"Some vendors are looking to deploy LTE in hot spot-like deployments, where the demand is highest first. So it makes sense that they would cover a building with a picocell and femtocells  for the smaller buildings or personal usage."

The case for femtocells  in the LTE environment is further bolstered by two other factors:
1. LTE Deployment Frequency: Initial LTE deployments are expected to occur in high frequency bands such in the 2.6 Ghz range. At this frequency, in-door coverage from macro networks is relatively poor, and femtocells  offer the natural solution to enable users achieve the performance that is needed to ensure a positive LTE experience.
2. Capacity Bottlenecks: To support LTE, operators need to deploy high capacity backhaul which is optimized for the data rates and latency characteristics demanded by LTE applications/services. Utilizing femtocells -based initial rollouts offers them an opportunity to defer the CAPEX and OPEX by offloading backhaul data traffic to the broadband service used by the subscriber.
At the same, as indicated recently an article on deployment experiences with 2G and 3G femtocells  published in IEEE Communications , there are quite a dependencies the existing macro network infrastructure that need to be addressed to ensure high quality Femtocell coverage. These include radio network optimization, provisioning of additional mobile identifiers, provisioning for interactions with packet and circuit core network elements, billing, network management systems, etc. Operators, thus, need to carefully plan their Femtocell roll-outs to ensure seamless operation with their existing networks.
LTE, on the other hand, offers operators a clean slate to start with. Choosing to deploy femtocells  in conjunction with LTE at the very outset can help operators alleviate most of the above listed issues as all of LTE network elements would be greenfield deployments. Additionally, LTE defines self-optimization and healing functionality, which can minimize a lot of concerns related to radio network optimization such as co-channel and adjacent channel interference, need to use isolated channels for Femtocell communications, ping-pong effects between macro and femto networks, etc. Further, the enhanced capabilities of LTE can enable new Femtozone services including set top box integration for quad-play applications, terminal adaptor functionality for fixed line VoIP telephony, minute and data sharing plans, etc. These enhanced services offer operators opportunities to increase revenue from new customers and an improved Quality of Experience (QoE).

Despite the benefits and natural advantages of LTE femtocells , developing and deploying these is not trivial. One of the bigger concerns with LTE femtocells  is the presence capacity bottlenecks on the backhaul between the Femto Access Point (FAP) and the Femto Gateway (FGW). As this pipe may potentially be leased from other broadband service providers with no Service Level Agreements, performance of LTE services could get negatively impacted. Thus, widespread deployment of LTE femtocells  could drive some evolution in business models, peering relationships and SLAs between wireless and fixed network service providers. Other issues with LTE femtocells  include the availability of high performance and interoperable self-optimizing and self-healing functionality, limited field experience with both LTE and Femtocell technologies, limited availability of trial ready equipment, etc. Thus, even though substantial challenges exist on the road of LTE femtocells , they are by no means insurmountable.

Both LTE and Femtocells are technologies waiting for their day in the sun. While both hold tremendous promise, standalone deployments can actually limit or potentially delay their commercial acceptance. The highly complementary nature of these technologies and the advantages offered by a symbiotic relationship between two could be the potential "killer combination" which provides the apparently elusive business case that operators have been looking for, and ensure the success of these technologies.
About the Author
Sanket S. Nesargi is Senior Marketing Manager at Aricent.

Dr Sanket Nesargi is the Senior Marketing Manager at Aricent for the OEM segment. Sanket has 12 plus years of experience in the telecom industry and has worked with Aricent since May 2009. Prior to Aricent, Sanket has held positions in multiple domains including Strategy Consulting at KPMG, Product Marketing and Management at Tektronix, and Product Management and System Architect at Nortel. Sanket holds Ph.D. in Computer Science from the University of Texas at Dallas, and an MBA from the McCombs Business School at the University of Texas at Austin.
About Aricent
Aricent is a global innovation, technology and services company focused exclusively on communications. Aricent combines the leading innovation capabilities of frog design with unparalleled domain expertise in communications as a strategic supplier to the world's foremost infrastructure, application and service providers. The company's investors include Kohlberg Kravis Roberts & Co., Sequoia Capital, The Family Office and The Canadian Pension Plan Investment Board.For more information, visit