Motorola: Price, Delay in Standards Finalization Impede Femtocell Deployments

Femtocells (News - Alert), or micro cellular access points, are set to add a new dimension to the home network experience.

 

Originally known as an Access Point Base Station, a femtocell is a small cellular base station, typically designed for use in residential or small business environments, that connects to the service provider’s network through broadband. Generally speaking, a femtocell allows service providers to extend service coverage indoors.

 

Yet price pressure and technical complexity dampen the spirit for femtocell deployment.

 

Despite impediments in developing an effective business model out of femtocells, the technology remains an attractive proposition, according to Motorola (News - Alert). This is because femtocells enable value-added services beyond “cheap voice” – making service plans a real possibility. Further, backhaul and macro cellular rollout savings make the business case even more lucrative.

 

Recently, TMCnet caught up with Sheriff Popoola (News - Alert), a senior manager of Product Line Management for the Broadband Solutions Group at Motorola, to discuss various issues affecting the deployment of femtocells.

 

Our exchange follows.

 

Sheriff Popoola: Right now, the latest trends in femtocells would be the growing interest in LTE (News - Alert) and WiMAX femtocells. As service providers begin to understand the potential of femtocells; they begin to realize how this can greatly lower the cost barriers to outlaying a new cellular network.

 

SP: Apart from the complexity of integrating a femtocell network with a macro-network, deployment for femtocells is a different paradigm for wireless operators. They have never had to manage this large of a number of devices. They typically manage the element in the networks; which in extremely large networks can number in the thousands. When we talk about femtocells, we are talking in the millions, and the device is located in the consumers’ homes – hence the operator has no control over the device’s environment. The goal of the trials that we have ongoing is for operators actually to see how this will affect their operations paradigm. It requires the wireless operator to learn and acquire new skills that they previously did not have.

 

Additionally, the business model for femtocells is different for cellular-only carriers for triple-play operators and for quad-play operators. While coverage improvement may be the primary driver for one kind of operator, Macro capacity offload, Fixed Mobile substitution, MVNO cost reduction and VAS or some combination of these may be the drivers for other operators. In general, at today’s femtocell price points, it takes a complex business plan to translate femtocells to a profitable business in 18 months. New business models present a barrier today that will be overcome faster once success stories in each customer category are out there.

 

SP: Yes, Motorola is looking at several areas of innovation at how femtocells interact with other devices in the home. One example is the recently demonstrated femtocell with integrated picture frame and VoIP soft phone. We are also looking into innovation in areas of DLNA. Imagine a world where as soon as you enter the home, any photos or movies that you take with your 3G phone get automatically uploaded to your home media server; and can at will be displayed on your PC or big screen TV. According to market research, we have found out that 95 percent of pictures taken on camera phones (note that camera phones today have resolutions up to 8 Mega Pixels; so they are often high quality photos) stay on the phone because transferring the photos is too cumbersome.

 

SP: Motorola is one of the few companies that have the experience and products to leverage every area of femtocells’ capabilities. From a Radio Access perspective, we are looking at femtocells in UMTS, CDMA, WiMAX, and LTE. From a management perspective, Motorola’s NBBS has the highest number of CPE devices under management which include femtocells, xDSL devices, etc. From a CPE perspective, we have announced integrated gateway devices and are looking into xDSL integrated gateways and integrated cable devices. We are looking at how integrating the mobile device into the home network can improve the overall user experience.

 

SP: Service Providers who are wiling to deploy femtocells need to spend a lot of time upfront understanding and validating their business case. This will be the key to their successful launch of the solution.

 

 

SP: Femtocells work for all technologies but are best suited to technologies at high frequencies, which in turn have low in-building penetration. Femtocells allow operators a less costly way of achieving in-building coverage. Femtocells also provide a better value proposition to the end consumer; when they are used for technologies capable of high-speed data; this creates the ability to integrate the mobile into the existing home network and provide greater perceived value to the end consumer.

 

SP: At the moment price and finalization of standards are the two main challenges. The market is looking for a cost reduction curve that is unprecedented at this early stage of a new technology; and the whole industry is rising to that challenge. The finalization of standards is something that will also enable a steeper cost curve and allow femtocell CPEs from different vendors to work on networks provided by other vendors. Motorola and other members of the Femto Forum are working actively with all the standards bodies to propose a set of standards as quickly as possible and are putting an IOT program together.