14 Feb 2007

The advent of Femto cells - cont'd

Both Epen and Martin made valuable comments on my last posting, so I thought that expanding some of the ideas is in place.

From the consumer point of view, reduced call prices are definitely an important aspect of Femto cells. As for the interference aspect, whether Femto cells will cause more or less interference to Macro cells is debatable. On one hand the signal will be contained within indoors. On the other hand it is likely there will be so many of them. Also, there has to be a reasonable signal penetration into (or out of) buildings to facilitate handover between the two layers.

Will DSL providers get a piece of the pie? It depends who the DSL provider is. As Martin suggested, there are many operators buying DSL assets and are thinking of service "convergence" on the long run. If you are a mere DSL provider, your business model is unlikely to be affected much with Femto cells. Somebody is paying for the DSL subscription (could be the consumer, but could be the operator too), and that's all that matters. If you are someone competing with mobile operators (e.g. BT), then it is likely they will put any hurdle they can think of in the way of Femto cells, unless they make some money out of it.

Femto cells will definitely face fierce competition. If mobile operators loose the battle, at least they can claim that they tried, instead of sitting back and watching the market slip away. They may well loose, but they will loose more by not trying.

There are many handsets with WiFi capabilities around. Whether someone would want to use Skype and ditch the conventional mobile network is a matter of personal preference. For the time being, only technology suave people with love of experimentation do this.

There are also many hurdles that internet based VoIP (e.g. Skype) has to pass before it is adopted on a full scale for mobility. For example, seamless call transfer between the home cell and Macro layer can not happen if you use a simple VoIP routed over the internet: the mobile operator has to be involved somehow. This makes the Femto solution more appealing, because the call is managed easily and seamlessly.

It is not perceived that wireless calls over WiFi will pick up on a large scale, simply because powerful operators (who by the way spent billions on spectrum) will not allow it to happen. So the issue of mobility support is intertwined with the spectrum license and the regulatory aspects associated with it. For example it is not permitted to support mobility on a system using the fixed wireless broadband spectrum in UK.

All in all, here is a summary of all the factors that will influence the Femto cell strategies going forward:

  • License: Is it needed, who owns it and what does it cover? What spectrum?
  • Mobility: Will seamless communication (handover,routing of incoming and outgoing calls) be part of any competing solutions?
  • Content: who has control of it, and how much will it cost to access it?
  • Backhaul: who controls DSL backhaul?
  • Regulatory: how will the spectrum be allocated and what are the conditions attached to it by the regulatory bodies?
  • HW costs: What volumes? Economies of scale? Cost in handset or router?

Indeed... only time will tell.

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