About author

Nick Johnson as the CTO of ip.access is responsible for technology strategy and implementation, leading technical innovation, specification and planning activities, and directing the development of the organisation’s products. Mr Johnson has been part of ip.access since its formation and was a major contributor to the GSM technology on which ip.access is founded. Prior to ip.access, Mr Johnson was a founding member of ip.access’ parent company TTP Communications. Before working at TTPCom, Mr Johnson spent several years with The Technology Partnership, the progenitor of TTPCom, and at the Cavendish Laboratory in Cambridge, building state-of-the-art receivers for radio astronomy. Nick Johnson has a PhD in Microwave Scanned Imaging Techniques from University College, London, and a MA in Physics from the University of Cambridge.

Article abstract

Femtocells are tiny, low power 3G radio systems that plug into a residential broadband connection to provide a mobile signal directly in the home. Since femtocell traffic is transmitted to the operator via broadband - not via the mobile network - costs are lower and mobile ‘macro-network’ traffic is greatly reduced. The reduced traffic results in substantial savings for operators and lower prices for subscribers. Femtocells offer a number of automatic ‘presence’ services and reduced rates for calls made from home.

Full Article

Femtocells are tiny, low power 3G radio systems that plug into a residential broadband connection to provide a mobile signal directly in the home. Femtocell business case With about 30 per cent of mobile calls made at home, operators with coverage holes in residential areas have the potential to significantly increase revenues by deploying femtocells. An ARPU gain of €11 per month, spread across all users in the household, would more than cover the fully subsidised cost of a femtocell. Combined with a ‘femtozone tariff’, femtocells can be used to encourage substitution of voice minutes from the fixed line phone. Unlike ‘homezone tariffs’ (based on macro cell ID), femtocells actually reduce the cost of delivering calls, and provide discounts that don’t leak outside the home. Femtocells also encourage the adoption of mobile data services. Delivering high-speed mobile data inside buildings is a tough challenge for the macro network. Femtocells give faster data speed and a better user experience, encouraging greater use of data services inside the home where new services are often tried first. As subscribers become familiar with using data services inside the home, they tend to use the same services more outside the home as well. Equally important, femtocells allow the operator to deliver data services at a very low cost, because the traffic is backhauled to the core network over the household’s existing broadband link. These cost savings can be passed on to customers (e.g. via femtozone tariffs), making the mobile phone competitive not only with the fixed line telephone, but also with the TV and PC for entertainment and information services in the home. This is strategically important to mobile operators as they adopt new business models based on revenue share with web and media partners instead of per-megabyte data pricing. If mobile TV and other bandwidth-hungry data services are to be commercially successful, operators need a way to deliver this data cost-effectively via the 3G network. Femtocells help in two ways. Firstly, removing indoor data sessions from the macro network reduces the number of users each macro cell needs to support. Secondly, because of the way WCDMA works, if indoor users are served via femtocells instead of from the macro cell, the capacity of the macro network increases out of all proportion to the number of users who have been removed from the cell. Even ignoring the revenue earning opportunity from femtocells, the cost savings from off-loading the macro network alone provides a strong business case for operators to deploy femtocells. If usage of high-speed mobile data services increases to a level equivalent to watching one three minute 384kbps video session per day, an operator with ten million subscribers could save €500 million over four years by deploying femtocells to 20 per cent of its subscribers’ homes instead of upgrading its macro network - even with a full subsidy on the femtocell. Consumer propositions Ultimately, the success of femtocells depends on mobile operators finding the right combination of discounts and new services to attract end users, and to overcome potential objections to more clutter in the home or irrational fears about mobile phone emissions. This will involve careful customer segmentation and creative marketing, but the potential benefits for operators are significant and should more than justify the cost of these initiatives, including femtocell subsidies and service discounts. The femtocell consumer proposition will evolve quickly. Simple propositions based on basic voice coverage and homezone call discounts will kick-start the market (especially in the US, where 15 per cent of homes have no coverage and 25 per cent more experience poor call quality). As mobile social networking, video streaming and other data intensive services take off, the importance of having a good mobile data experience at home will increase. After all, more than 40 per cent of mobile data usage takes place in the home1, and 35 per cent of mobile TV is viewed at home2, despite the presence of the PC and regular TV set. Femtocells deliver high-quality mobile data for indoor users, and preserve capacity in the macro network so that outdoor users also benefit from better coverage and an improved mobile data experience. The evolution of femtocell consumer propositions More interesting still is the possibility of new services that work only for femtocell users when they are in the home. These come in two types: • Femtozone services - regular mobile data/voice services triggered when the phone comes in range of the femtocell; and, • Connected Home services - where the phone accesses the home LAN via the femtocell, often at reduce rates. Femtozone services Examples of femtozone services include: • Get an automatic SMS when your kids arrive or depart the home; • Automatic I’m at home profile/presence update on Plazes; • Automatic podcast reload & photo/video upload to the web when you get home; and, • Virtual home number (rings all mobile phones currently in the home). The key to enabling femtozone services is that there must be a triggering mechanism when the phone arrives home and camps onto the femtocell. This triggering can come from two places: • An application in the phone which uses an API to detect the femtocell ID and initiate some action, for example, large file transfers, or, • From the network - the femtocell access point or access controller initiates an SMS message or a presence update on a Web 2.0 service when it detects a user phone that has arrived in the femtozone. Femtozone services can readily be built with first-generation femtocells. Connected home services Connected home services require the femtocell to route traffic locally on the home LAN, so the femtocell not only provides a way for the phone to access operator services and the Internet, but also services on the home network. Examples of Connected home services that can be enabled by a femtocell include: • Back up downloaded music from your phone to your PC; • Play a slide show of photos from your phone on your TV; • Stream high-quality videos from your DVR (digital video recorder) to your phone; and, • Use your phone to control other devices in the home (e.g. to instruct the HiFi to play music stored on a home media server). Of course, the Connected Home industry already envisages mobile devices accessing the home LAN via WiFi or Bluetooth, and applications using the Universal Plug’n’play standard (UPnP) are already available for high-end smartphones. But femtocells will make things much simpler - there is no need to configure WiFi or Bluetooth settings in the phone - and improve the end user experience (e.g. much longer battery life), thereby removing obstacles to mass market adoption of Connected Home services on mobile handsets. Connected Home scenarios will become feasible as femtocells are enhanced with local traffic routing capabilities, and applications in the handset are created to exploit this. The bottom line Femtocells not only improve the user experience for regular mobile voice and data services in the home, they can also enable compelling new services. These services will make life more convenient for end users, automating data transfer and presence updates, and seamlessly connecting the mobile phone into the home network. Operators stand to benefit from increased adoption of femtocells leading to new revenue streams and greater cost savings from macro network offload.