Femtocells aim to fill gap in fixed-mobile convergence

Femtocells are set to become a significant component in the world of fixed mobile convergence. Questions remain, however, as to how carriers will leverage this technology, and what its impact will be on the competitive environment.Simply put, a femtocell is a base station that expands localized cellular coverage. To date, a lot of the talk has been around using femtocells in the residential space, though there is no reason why the emerging technology couldn't apply in SOHO or even targeted enterprise environments. The major carriers in Canada are interested, but reluctant to talk about a technology that isn't out yet. The appeal for the carriers is that although some see femtocells as allowing for convergence with Wi-Fi, it fits better as an extension to their licensed spectrum for enhanced network coverage.That's good news for the carriers, because it means the call isn't dropped. And, with improved service, customers should stay loyal.Jason Kowal, head of North American research for Analysys Ltd., a telecom research group, says the lack of big announcements means that carriers are still assessing the technology and the business model. At present Sprint-Nextel has two trials in the US, but there is nothing on the burner in Canada."The Sprint trials are in Indianapolis and Denver, using a Samsung product in the residential market," says Kowal. He explains that because this is licensed spectrum each carrier will have to have its own femtocell technology.Broader use of femtocells among a number of carriers is still a ways out. "There is a lot of talk of multi-carrier femtocells," Kowal says, "but that would be a mature development in the market."This makes the business model a bit trickier, but also offers advantages to carriers in that an installed femtocell on a single network might create loyalty. The call itself would backhaul off the DSL or cable modem, and then to the operator.Roberta Wiggins, a research fellow in Yankee Group's enabling technologies service provider group, sees the Sprint example as likely to be copied north of the border. The company's trials have a monthly charge of $15 a month for individuals or $30 for a family. "Sprint is subsidizing the femtocell cost," says Wiggins. "Ultimately the carriers will be giving these away, probably bundled to multiple subscribers in a family. It's a great way to increase stickiness. At present, cell coverage from home is often poor, yet our research indicates that more and more people want to use cell phone as their only device."There is still some confusion as to the spectrum coverage, because at present the carrier traffic is offloaded to DSL/cable backhaul using unlicensed mobile access (UMA), but ultimately femtocells will use the IP multimedia subsystem (IMS) framework. Femtocells may provide something of a beach-head against the threat of dual-mode hand-sets. Dual-mode, despite QoS issues, is a real threat to networks that can't lock in the 802.11 interface to stop revenue leakage from switching off cellular networks to unlicensed Wi-Fi.According to Kowal, Wi-Fi enabled handsets will continue to grow, but ultimately femtocell users will capture the market. "We are talking a three-to-five year time frame," he says, "with both technologies gaining traction side-by-side."Dave Hattey, president and CEO of FirstHand Technologies in Ottawa, agrees with Kowal, arguing that carrier support for femtocells, and aversion to dual-mode handsets, gives femtocells the advantage in the long run."The carriers don't want to shift minutes off their cellular system," he points out, "and so this drives the femtocell argument against Wi-Fi and dual mode." Femtocells aren't exactly a slam dunk for the simple reason that there aren't the access points when compared to Wi-Fi."The advantage for femto is that it uses the same handset," says Richard Bodin, fixed mobile marketing manager for Nortel Networks Corp. "And, it delivers service over an IP-backhaul, so it looks like a SIP client to the network. The downside, of course, is that we don't have the access points."Stephen Collins, VP of marketing and business development for Tatara Systems, which has offices in Vancouver, recently returned from the International Femtocell Conference in Dallas, and reports that the technology won't see wide deployment until at least 2009."All the big operators are looking at it and cost is a red herring - it will pay for itself," he says. "Improving home cellular coverage is an issue. The operators who disagree have been reading their own press clippings."Collins also points out that there are a number of ways to approach femtocell network integration. "You can simply convert the voice call into RTP (e.g. real-time transport protocol), or use UMA as in the dual-mode world, or you can tunnel from the handset with native encoding, which is not really a VoIP stream."According to Kowal, data services might be a factor on a 3G service. It can deliver, but the nature of the spectrum makes it in some ways less tolerant. In Canada the player with the greatest expressed interest is Rogers Wireless, which recently joined the Femto Forum. The Forum is intended to promote the technology while also recommending standards and deployment architectures. At present that means consistency among femtocells, which is nice to have, but avoids the more pertinent issues of multi-carrier capabilities.There are also upgrade issues. "The way the networks are configured now, they'd have to upgrade considerably to get the QoS that a user would expect for an internet browser," asserts Kowal. "And if you are then faced with huge upgrades, suddenly network costs become a factor."

Femtocells aim to fill gap in fixed-mobile convergence

News | 01/03/2008 12:28 pm EST

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