David Payette is CEO and President for NEC UK, heading up the company’s business units, which include IT, fixed and mobile communications, security solutions and display technologies. Prior to joining NEC, Mr Payette was Marketing Director at Avaya, a provider of business communications applications and services. David Payette holds a bachelor’s degree in Asian Studies with Economics graduating from the University of Michigan; he is fluent in Japanese.
Mobile, 3G, broadband has been a long time coming, but now that it has started to grow rapidly, it threatens to overload the backhaul networks connecting users to the core network. Especially distressing to business users are 3G’s low signal levels inside of buildings, which cause reliability problems. Femtocells, small, low power, mobile access points provide localised 3G coverage and dedicated capacity while using the subscriber’s broadband connection for backhaul, thereby resolving both the backhaul capacity and indoor reliability issues.
When the auction of the UK’s 3G radio spectrum concluded in April 2000, the ‘big five’ mobile operators (Orange, 3, T-Mobile, Vodafone and O2) were expecting a relatively quick return on the £22.5 billion they had invested. What they had not predicted, however, was that the collapse of the dotcom bubble was to lead to a downturn in spending and a long wait for the revenue streams they had hoped 3G would offer. Fast forward to 2008 and 3G seems to be coming into its own. In part, this is down to a range of new applications available to end users. On the consumer side, mobile Internet has become a viable technology and has given rise to off-shoot applications such as mobile TV and mobile social networking, which are looking ever-more attractive to the Web 2.0 generation. For businesses, 3G offers speeds, which make the mobile versions of a range of applications suddenly possible. From mobile access, to centralised systems such as SAP, to mobile videoconferencing, there is much that 3G can offer to enterprises of all sizes - not least, the use of ‘dongles’ to provide mobile access to the Internet and VPNs (virtual private networks). The 3G spectrum is not, however, limitless. With a range of new data-hungry applications - and more users on the network - comes the spectre of network congestion. Network congestion has also threatened fixed-line broadband. The success of services such as the BBC’s iPlayer and YouTube has led some to claim that the Web is heading for meltdown unless something is done to boost capacity. The reality of the situation is not quite as extreme as these doom-saying reports would have us believe, but this is an issue that clearly needs to be addressed. Another issue is coverage. 3G will only truly prove its worth once coverage has improved. Although consumers accept a certain degree of poor coverage - an interruption to a music download, for example, is merely annoying, for business users a disruption to service could lead to a potentially costly loss of productivity. This is especially true of in-building coverage where 3G penetration is particularly low. As 70-80 per cent of 3G mobile data applications are used indoors, this is a real problem for operators. It is clear that if 3G is to be an unqualified success, network performance needs to be maximised. This enhancement must help both to ease the strain on the spectrum and improve coverage. Femtocell base station technology looks like it might help to address these issues. Femtocell technology is a new way of improving in-building 3G coverage. A femtocell is a small, low power, mobile access point designed for use in home or business environments; it provides localised 3G coverage and dedicated capacity while using the subscriber’s broadband connection for backhaul. The femtocell unit generates a personal mobile phone signal in the building and connects this to the operator’s network through the Internet. This allows improved coverage and capacity for each user within their home or office. Femtocells, then, directly address the two limiting factors of 3G networks - the spectrum capacity and the poor in-building coverage. It is an enabling technology. On the one hand, it enables operators to push their 3G networks to their maximum and offer truly converged voice and data solutions. On the other hand, it enables end-users to enjoy the benefits of 3G without suffering from a poor user-experience. So, what exactly is the potential for femtocells and what impact will the technology have on those regions where it is widely deployed? According to Ovum there will be 17 million femtocells deployed in Western Europe by 2011. ABI Research, meanwhile, predicts that the European femtocell market will be the technology’s largest global market, with 16.6 million units per annum in 2012 out of a total shipment volume of 36 million units and a market valuation of US$4.2 billion. If these forecasts are accurate, femtocells seem set for a rapid period of growth in the next few years. The impact that this will have on the way we consume 3G services could potentially be massive. For the home user, the impact will be immediate. Downloading songs to iPhones and other MP3-enabled handsets will be much faster and the flow of data uninterrupted. Mobile TV will become a serious proposition as latency and jitter are reduced, leaving a clear and smooth picture closer to the viewing experience currently enjoyed on digital television. Mobile social networking will also improve. Users will be able to quickly upload videos onto sites such as Facebook and YouTube. Tech-savvy consumers want to be connected 24/7 and 3G is the obvious means to do this. Femtocells will ensure that quality is as high as possible, allowing consumers to do what they are already beginning to do now, only better. For businesses, femtocells could be even more revolutionary. With femtocell coverage in the office, laptops need no longer be wired into the Internet and central servers. 3G dongles will be able to provide excellent wireless data rates, allowing workers to be truly mobile. The fixed-desk is already becoming a thing of the past and femtocells will encourage that trend. The ‘hot desk’ is coming of age. Free from the shackles of a wired phone and Internet connection, workers will be able to move around the office freely. Home working, increasingly high up on the news agenda, will also be enabled. A femtocell can be installed in workers’ homes, giving them fast 3G Internet connections - all a modern business person needs to stay productive. It is not an overstatement to say that femtocells have the capacity to change the way in which business of all sizes network. For 3G operators, femtocells offer a range of benefits. Femtocell solutions will provide mobile operators with a practical and cost-effective platform for delivering Next Generation Services, such as competitive voice calling and IPTV, direct to the end-user, all via a single in-building device. In addition to providing new revenue streams, operators who take advantage of femtocell technology will be well-positioned to differentiate their service offering in the face of increasing competition in the wider telecoms market. Femtocells have the potential to support the exponential growth of consumption of services and data and could play a crucial role in underpinning the explosive growth of mobile broadband usage. The latest consumer gadgets, such as the Apple iPhone, are driving previously unseen levels of mobile Internet usage, and throughout the industry, the use of USB HSDPA (high-speed downlink packet access) modems has really taken off, effectively competing with DSL (fixed digital subscriber lines) in some markets. Both of these place huge capacity demands on operators’ backhaul networks, and because so much of that usage is at home, femtocells coupled with DSL could provide an alternative capacity resource. Femtocell technology is not simply about extending coverage, but enhancing the user experience. In addition to enhanced mobile reception in the home and office, femtocell users can expect to receive enhanced functionality and services, which are tailored to consumer and business users. The technology, therefore, is a truly next-generation cellular service. It promises to deliver on the early promises of 3G - not just for the end-user, but for operators as well.