20 Jun 2007

Femtocell Challenges

In a previous post I talked about the potential benefits of femtocells to the operators as well as consumers. In this post I'd like to investigate the potential hurdles in the road to viable femtocell solutions.

Looking at various analysts remarks I narrowed the list of potential show stoppers to the following items, all of which are not unresolvable, but one has to be aware of:

Cost:
This is the obvious one. There is no doubt that we are well into the cost reduction era. This is by far the number one item on every operator's agenda. The bottom line is that operators want to see a nice dollar savings associated with Femto cells, which increases pressure on femto cell development firms to reduce their price tag. Traditionally, pricing is based on a BOM plus margins. An alternative way for development firms is to price based on potential benefits/savings. My firm has recently been engaged in a similar pricing activity with a potential investor.

The cost challange means that there is a limit to the amount of effort and features developers will bundle in the femto cell box. Deciding what is "sufficient" feature list is a difficult call (check the technology life cycle model proposed by D. Normann in one of my previous posts)

Radio Planning and interference management:
Unlike Wi Fi, the Femto cell is likely to use the licensed spectrum e.g. UMTS band. Although it is my view that the femto network is better have its own carrier, many clients would like the femto cell concept to work on the same carrier frequency used by existing infrastructure be it a macro, micro or pico layer.
Femtocells are expected to coexist with the rest of the network by automatically configuring themselves. Operator or user intervention is undesirable...a femto cell box has to be fully plug and play without the need to setup,configure or optimise it in anyway. Therefore lots of effort is being spent on femto cell radio management features e.g. choosing the right carrier, automatic setting of power levels, protecting other infrastructure from harmful interference, handoff ...etc .

Core Network Integration:
I touched upon this in a previous post (Femtocell Architecture).
In a nutshell, a legacy architecture is too old fashioned, while on the other hand a full flat IP architecture with an IMS core is an expensive undertaking with no sign of becoming available soon.

Interim solutions relying on some kind of concentrator seem to attract some attention. I can't really comment much on this and I'll leave it to the core experts to make their minds.

With converged solutions such as femto cells there is also an increased expectation of a higher level of network intelligence and features at the edges of the network (as opposed to the traditional model of core intelligence).

End user perception:
The consumer will (and has to) ask: "what's in it for me". At the moment most of the promises revolve around cheaper calls as well as using the often over hyped word: "convergence". The fact is that most people do not know what this word means! The operators will find it challenging to convince the consumer that the femtocell is the way to go.
In addition, there is the issue of backward compatibility in terms of usage. Many people have Internet access at home and a big proportion use WiFi routers to have wireless coverage at home. Is the Femtocell going to replace that? if so, then there is a need to have a combined WiFi/Femto router to enable legacy equipment to access the Internet. Alternatively people will end up with a stack of routers, from different suppliers.... hardly a convergent solution!.
Therefore the extent of device convergence will play a significant role in any operator's femtocell strategy.
There are also health concerns about exposure to increased levels of RF waves.

94 comments:

Martin said...

Hello Housam,

always interesting to read your blog!

Calling devices with Wifi the "legacy equipment" is a bit tough to swallow :-) After all, at home most devices will have Wifi and switching over to any other air interface protocol is not even an option on the horizon.

On top there are 3G/Wifi phones available know (such as the Nokia N-series phones for example) that question the Femtocell approach altogether.

So I agree, integrated Femto3G/Wifi boxes look like an interesting thing to consider.

Cheers,
Martin

srini said...

Hi Housam,

I agree that keeping cost low is a big challenge for femtocell vendors. Can you comment on target BOM cost that vendors are considering? What portion of the BOM cost goes into the baseband controller, timing and RF modules?

Thanks,
sbang

Housam Housami said...

For the femtocell to be a viable solution Martin it has to have the ability to replace alternative radio access routers. The "convergence" achieved by the femtocell dictates that whatever access technology is being used at home has to be replaced by this one femto box. So in order to give operators the power to "control" the subscriber an integrated Femto/WiFi box is needed. All the WiFi equipment can access the internet via the femtocell router using one provider.

When I mentioned the "legacy equipment" I actually meant all the laptops and computers that access the internet using WiFi access points. A Femto/WiFi integrated box is not only interesting, it is about to be a reality. I know of at least three different femtocell development companies who have this on their roadmap. Operators are also keen on this.

It is ofcourse great to have WiFi on mobile handsets. It may work a treat for accessing the internet and making VoIP calls and what not, but it is not a "for all users" solution. There is no guarantee on quality. There is no spectrum protection and no mechanism to have a feasible roaming and handover capabilities. And while it may work in suburban and rural areas, it becomes problematic in "vertical" cities where every flat has a WiFi router. There is no room for comparison between WiFi and standard based cellular technologies. by the way I found that it costs less than 10 euro to add a WiFi air interface to the femtocell router.

Finally Martin, I should say that looking from a femtocell perospective, (if it turns out to be a success), WiFi enabled devices will be "legacy equipment" ;-)

Housam Housami said...

Srini,

I'm afraid I can not comment on target costs. I have confidentiality agreements with my clients.

As for the split between the different modules, this depends on the differentiation approach. Some concentrate on the signal processing features and algorithms, while others put the emphasis on good RF with low noise figure...or both :)

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