The compelling selling points of femtocells are increasingly becoming more noticeable.
The apparent strong compelling factor is the disruptive value proposition in terms of cost of delivering a minute of calls (or Mbytes of data) to the end user. Another obvious one is related to service bundling and other innovative marketing ideas.
One area that is increasingly getting attention is the femtocell as platform for added value services (VAS) . The femtocell concept can be extended to make it an integrated 3G access point and intelligent home gateway that offers added value services to the customer. Imagine what can be achieved if a mobile operator can offer something like this, but with a proper cellular flavored radio. This will make femtocells ideal candidates for IMS type of deployments.
The femtoell can also be used as a content distribution platform. In this model content/services/application can be pushed to the UE when the femtocell senses the UE is in its vicinity.
Even a more exciting proposition, is what I call Reverse Content Distribution, where a roaming user outside the femtocell zone can access his content remotely. The femto can orchestrate the user’s access to various equipments at home, such as the PC, Home Media Server, Apple TV, …etc. It can also perform various remote home control functions, like switch on the heating, prepare the bath, access the burglar alarm …etc. There are various mechanisms to enable this. For example, it can be via a femto access interface on the application level. Alternatively, the femtocell can be a passive element and home control can be achieved pretty much in the same way it can be done today from a PC across the internet.
Showing posts with label Convergence. Show all posts
Showing posts with label Convergence. Show all posts
19 Oct 2007
18 Jul 2007
Indoor FemtoCells and content personalisation
One of the tooted selling points of FemtoCells is the enhanced user experience indoors. There is no doubt that in terms of radio coverage the FemtoCell will enable a more uniform and better RF signal indoors.
The story does not end there however. The underlying concept of "convergence" with FemtoCells will give content personalisation and customisation a whole new dimension. In addition to simple signal radiation, a FemtoCell router serving 2-3 mobiles can also perform a whole bunch of other tasks on behalf of users. This is a new uncharted territory with a poetic license to daydream. A variant of social networking can also emerge if it is embraced by the new breed of "converged" operators.
With Google putting effort on mobile content search, the FemtoCell era will be a very exciting and interesting period and one should expect interest in this technology to extend beyond the circle of traditional mobile operators.
The story does not end there however. The underlying concept of "convergence" with FemtoCells will give content personalisation and customisation a whole new dimension. In addition to simple signal radiation, a FemtoCell router serving 2-3 mobiles can also perform a whole bunch of other tasks on behalf of users. This is a new uncharted territory with a poetic license to daydream. A variant of social networking can also emerge if it is embraced by the new breed of "converged" operators.
With Google putting effort on mobile content search, the FemtoCell era will be a very exciting and interesting period and one should expect interest in this technology to extend beyond the circle of traditional mobile operators.
11 Jul 2007
Reuters report on Femtocell featuring ip.access
Reuters made a short report on a femtocell demo organised by ip.access. Check it out here. (Thanks to Mr. Adnan Boustany from PicoChip for sending the link).
What I like the most about ip.access's approach is that they realised the importance of effective marketing to win customer confidence. In terms of technical performance and features I don't think they are far ahead or behind the other major femtocell developers. Nevertheless it seems their relentless marketing effort is paying off.
What I like the most about ip.access's approach is that they realised the importance of effective marketing to win customer confidence. In terms of technical performance and features I don't think they are far ahead or behind the other major femtocell developers. Nevertheless it seems their relentless marketing effort is paying off.
5 Jul 2007
Femtocell Forecasts
Cellular News published an interesting short article suggesting that femtocell shipments will reach 36million in 2012, which in my view a rather conservative estimate. The estimate is contingent on a couple of big operators tidying up their messy business models. If operators grasp the big potential offered by the femto concept, then one can easily predict an estimate closer to 100 million plus. Nevertheless I perfectly understand why other experts do not see it this way.
An interesting quote in the article mentioned above:
"...no matter how attractive the service offerings a femtocell-based solution can bring, the sheer savings from backhaul and energy costs could equate to over $70 billion by 2012, outshining service revenues and providing enough financial incentive for carriers to actively support this solution".
Obviously, the operators that will gain the most are the ones that do not have yet a fully deployed 3G infrastructure.
An interesting quote in the article mentioned above:
"...no matter how attractive the service offerings a femtocell-based solution can bring, the sheer savings from backhaul and energy costs could equate to over $70 billion by 2012, outshining service revenues and providing enough financial incentive for carriers to actively support this solution".
Obviously, the operators that will gain the most are the ones that do not have yet a fully deployed 3G infrastructure.
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.
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.
9 Feb 2007
The advent of Femto Cells
Home base station solutions, also called Femto cells have recently attracted a lot of attention. The idea is to give the mobile user a small box similar to wireless routers, which provides mobile cellular coverage at home. But why would mobile operators want to do that?
In order to answer this question, one has to look at what mobile operators are competing against. Fixed line carriers and DSL service providers are seriously threatening the mobile business by offering new products centered around Fixed Mobile Convergence, which in essence utilises wireless access technology to capture mobile users when at home, and divert their mobile originated voice and data calls to the fixed line network.
Mobile operators found themselves in a predicament: the traditional Macro cellular networks are not able to compete with what DSL service providers can offer, neither from a cost structure point of view, nor in terms of access speeds. (of course the mobile operators are partly to blame because they picked the wrong battle by trying to compete on the basis of access speeds rather than mobile centric applications).
A home base station or femto cell can help mobile operators in many ways. First they can compete directly with other home access solutions which rely on other types of access technology such as WiFi or WiMax. This is because low cost mobile handsets are widely available, whereas dual mode handsets with WiFi capabilities are pricey and still limited in variety.
The femto cell will also enable the operator to cater for subscribers where the service is most needed. Compare this with traditional macro deployment where the infrastructure is first built in places where subscribers are "likely" to appear and even before subscribers start using the network. A femto cell also circumvents the issue of outdoor-to-indoor propagation which typically kills the capacity of 3G and 3.5G systems.
The deployment costs associated with a femto cell are marginal in comparison with Macro cell deployment. This is because the customer is providing the "real estate" to keep the box, the power, as well as the backhaul (e.g. DSL subscription). I don't assume here that Femto cells will replace the macro layer, nevertheless the extent of investment in the macro layer will be considerably less.
Femto cells will also enable the operator to offer creative and disruptive tariffs to directly compete with fixed line. Home zone offers can also be more effective than traditional home zone offers using macro cells which extend for kilometers sometimes (because they rely on a cell ID parameter).
So where is the catch? I will discuss the downside in a future post.
In order to answer this question, one has to look at what mobile operators are competing against. Fixed line carriers and DSL service providers are seriously threatening the mobile business by offering new products centered around Fixed Mobile Convergence, which in essence utilises wireless access technology to capture mobile users when at home, and divert their mobile originated voice and data calls to the fixed line network.
Mobile operators found themselves in a predicament: the traditional Macro cellular networks are not able to compete with what DSL service providers can offer, neither from a cost structure point of view, nor in terms of access speeds. (of course the mobile operators are partly to blame because they picked the wrong battle by trying to compete on the basis of access speeds rather than mobile centric applications).
A home base station or femto cell can help mobile operators in many ways. First they can compete directly with other home access solutions which rely on other types of access technology such as WiFi or WiMax. This is because low cost mobile handsets are widely available, whereas dual mode handsets with WiFi capabilities are pricey and still limited in variety.
The femto cell will also enable the operator to cater for subscribers where the service is most needed. Compare this with traditional macro deployment where the infrastructure is first built in places where subscribers are "likely" to appear and even before subscribers start using the network. A femto cell also circumvents the issue of outdoor-to-indoor propagation which typically kills the capacity of 3G and 3.5G systems.
The deployment costs associated with a femto cell are marginal in comparison with Macro cell deployment. This is because the customer is providing the "real estate" to keep the box, the power, as well as the backhaul (e.g. DSL subscription). I don't assume here that Femto cells will replace the macro layer, nevertheless the extent of investment in the macro layer will be considerably less.
Femto cells will also enable the operator to offer creative and disruptive tariffs to directly compete with fixed line. Home zone offers can also be more effective than traditional home zone offers using macro cells which extend for kilometers sometimes (because they rely on a cell ID parameter).
So where is the catch? I will discuss the downside in a future post.
18 Dec 2006
VoIP over UMTS: The Finale - Embrace the trend or block the threat?
This post is a try to summarise and distill a theme from the previous posts about VoIP over UMTS, without getting much into the technical detail, but rather by proposing a view of the telecomm market and motivations for VoIP.
First, let us get the definitions out of the way:
VoIP over cellular:
Carry the voice conversations of mobile users using VoIP by routing them over a packet-switched network, instead of the traditional dedicated, circuit-switched voice transmission lines.
The Market landscape:
Fixed Line broadband prices are falling. Fixed operators offer a huge bandwidth at cheap prices. With a WiFi extension it is possible to become semi-mobile. Fixed line operators realised that they have to diversify their business instead of relegating themselves to become ISPs and ISP carriers. Therefore came up with the Fixed-mobile Convergence concept. They want to win part of the mobility market by putting together compelling UMA offerings. Mobile operators undoubtedly will fight back, probably with home/enterprise collapsed architecture base stations.
Mobile operators see DSL as a headache, because suddenly they have to compete to offer high throughput. They have been fighting an uphill battle with WiFi (and soon WiMax) since they shifted their focus to “high throughput”. Mobile operators are generally unimaginative and still think in terms of “talk”, “text” and recently “broadband”, instead of capitalising on their greatest assets: mobility and location information.
The Proliferation of Wireless broadband has changed the mobility landscape. There are WiFi hotspots on every corner. WiFi Social networks are emerging. (FON): a company that gives you a customised router and allows you to share your broadband with other FONers. Businesses can also make money.
From the regulatory point of view, there is an increasing pressure on reducing mobile roaming charges. Also, it is still ambiguous how mobile data termination charges will be collected, at the moment there aren’t any, which makes VoIP an appealing solution.
Advent of “convergence” has put vendors in a predicament. Now they are trying to sell “standardised” architecture to very different types of customers.
Whenever the industry gets excited about new technology, financial institutions and banks become skeptical because they want to see some ROI on existing investments before committing any new ones.
If they don't embrace VoIP, mobile operators face a threat from it. Enterprise VoIP is already perceived to be a major threat. At the moment they are resist the trend and offering differentiated services to their enterprise customers, e.g. extension dialling
Shift in Markets structure:
The industry is moving away from a vertically integrated arrangement, where operators (think vodafone) own the infrastructure, the frequency, the transport, and applications, the portals, the content and the handsets. The future will be different, companies will own infrastructure to carry multiple types of traffic and a myriad of access technologies (fixed +wireless). Other companies will specialise in content provisioning, others will concentrate on marketing and user acquisitions.
It will be interesting to see how incumbents will shift away from current business models. There is space to diversify revenue streams: For instance, new technology will enable operators to challenge traditional promotion channels. Location information is a great asset and many interesting applications can be wrapped around it.
At the end of the day social re-engineering can open up new business models and allow the industry to get into new businesses. For example, adopting “work from home” ethos will allow telcos to compete with many industries such as: Real estate, car industry, and transportation service providers!.
VoIP over UMTS: motivation and market drivers:
First, let us get the definitions out of the way:
VoIP over cellular:
Carry the voice conversations of mobile users using VoIP by routing them over a packet-switched network, instead of the traditional dedicated, circuit-switched voice transmission lines.
The Market landscape:
Fixed Line broadband prices are falling. Fixed operators offer a huge bandwidth at cheap prices. With a WiFi extension it is possible to become semi-mobile. Fixed line operators realised that they have to diversify their business instead of relegating themselves to become ISPs and ISP carriers. Therefore came up with the Fixed-mobile Convergence concept. They want to win part of the mobility market by putting together compelling UMA offerings. Mobile operators undoubtedly will fight back, probably with home/enterprise collapsed architecture base stations.
Mobile operators see DSL as a headache, because suddenly they have to compete to offer high throughput. They have been fighting an uphill battle with WiFi (and soon WiMax) since they shifted their focus to “high throughput”. Mobile operators are generally unimaginative and still think in terms of “talk”, “text” and recently “broadband”, instead of capitalising on their greatest assets: mobility and location information.
The Proliferation of Wireless broadband has changed the mobility landscape. There are WiFi hotspots on every corner. WiFi Social networks are emerging. (FON): a company that gives you a customised router and allows you to share your broadband with other FONers. Businesses can also make money.
From the regulatory point of view, there is an increasing pressure on reducing mobile roaming charges. Also, it is still ambiguous how mobile data termination charges will be collected, at the moment there aren’t any, which makes VoIP an appealing solution.
Advent of “convergence” has put vendors in a predicament. Now they are trying to sell “standardised” architecture to very different types of customers.
Whenever the industry gets excited about new technology, financial institutions and banks become skeptical because they want to see some ROI on existing investments before committing any new ones.
If they don't embrace VoIP, mobile operators face a threat from it. Enterprise VoIP is already perceived to be a major threat. At the moment they are resist the trend and offering differentiated services to their enterprise customers, e.g. extension dialling
Shift in Markets structure:
The industry is moving away from a vertically integrated arrangement, where operators (think vodafone) own the infrastructure, the frequency, the transport, and applications, the portals, the content and the handsets. The future will be different, companies will own infrastructure to carry multiple types of traffic and a myriad of access technologies (fixed +wireless). Other companies will specialise in content provisioning, others will concentrate on marketing and user acquisitions.
It will be interesting to see how incumbents will shift away from current business models. There is space to diversify revenue streams: For instance, new technology will enable operators to challenge traditional promotion channels. Location information is a great asset and many interesting applications can be wrapped around it.
At the end of the day social re-engineering can open up new business models and allow the industry to get into new businesses. For example, adopting “work from home” ethos will allow telcos to compete with many industries such as: Real estate, car industry, and transportation service providers!.
VoIP over UMTS: motivation and market drivers:
- There is a big hype behind VoIP over cellular, largely because of the attention it attracts in fixed networks and internet world.
- There is a perception that VoIP over cellular will be cheap. This may be true if the operator already has an under-utilized packet core network for example. Nevertheless, offering operator controlled VoIP is not necessarily cheap. Having to run an IMS network to control VoIP introduce what is called “IMS Tax”, where the mobile operator has to deal with increased traffic for the same number of calls, and loose one of their greatest advantages: the ability to carry CS voice efficiently.
- There is also a view that VoIP over cellular is inevitable because once LTE is out CS voice is dead.
- If an operator wants to deploy IMS capabilities, VoIP can be bundled with other added value services and experiences, which hopefully will make a good compelling offer.
- There is a perception that VoIP offers some advantages in terms of capacity , quality and efficiency.
- Convergence: “VoIP fits well with the all IP convergence concept”. The fact of the matter is that convergence is not exactly “all IP”. Convergence is : "the process of replacing several legacy networks (boxes) based on old technology with a single network for all telecomm services, and for all telecom access (fixed + wireless)". So the theme is: a simplified, scalable and integrated transmission and core network.
What is the right VoIP over UMTS operator strategy?
There are two generic strategies which are opposite to each other, and a spectrum of possibilities in between. Essentially, the operator can either offer VoIP is a cheap substitute of voice calls, with limited investment in infrastructure and very much in line with the traditional internet provisioning model, or alternatively, offer a differentiated and high quality voice which is part of a more compelling and complete offering.
Cheap:
- The Premise: Subscribers want to do cheap voice calls.
- Provider mentality: “We give the pipe, you do the skype”.
- Follows the broadband ISP model by providing access to the internet and no additional differentiated services.
- Best effort voice calls.
- User experience is not seamless: standalone applications for VoIP and users have to know how use them.
- Ubiquity to the internet user, who can access their VoIP provider accounts from any terminal using any type of access. (unless blocked by a scrupulous operator).
Premium:
- Premise: Subscribers want to do reliable voice calls.
- Walled Garden mentality: “My network, my revenue”. Operator wants to charge for your VoIP calls.
- Guaranteed quality.
- Seamless user experience: user does not know his calls are carried over VoIP
- User ubiquity undermined by walled garden, perhaps have to pay for ubiquity.
- Differentiate the voice offering by value added services. VoIP becomes part of a complete compelling offer. (not voice centric).
Conclusion:
On the long term, VoIP over cellular is inevitable. However, there are serious issues to be addressed by the cellular mobile operators if they want to still exist few years down the line. They have to make up their mind what business they want to be in, and have to adapt to the new world of horizontal integration. It is very likely that the term "mobile operator" will diminish or disappear with new revenue streaming and business models emerging.
Contact me to get a power point presentation slides on VoIP over UMTS strategy)
3 Dec 2006
Review of article: What exactly is IMS?
Just read this article by Ian Poole in IET Communications, which is a good overview of IMS architecture. (I don't know why I pay them subscription fees for the magazine when you can download all the articles for free!).
I am not convinced that the need for IMS stems from the desire to "converge". The main objective for IMS is to give the operators a mechanism by which they can charge for any user activity and control the content distributed over their network. With the introduction of 3G data access the operators realised that the future is bleak if they simply offered mobile data speeds for users to access the (mostly) free Internet content. Therefore they wanted a mechanism by which they offer an alternative or additional content they can generate revenue from and control what content the user has access to. Flexible content distribution platform and flexible service provisioning are by-products and not the core issues.
With IMS revenue generation may not be focused on the end user. It could well be based on a sharing revenue with 3rd party content providers or by selling to marketers or retailers alike access to customers.
I am not convinced that the need for IMS stems from the desire to "converge". The main objective for IMS is to give the operators a mechanism by which they can charge for any user activity and control the content distributed over their network. With the introduction of 3G data access the operators realised that the future is bleak if they simply offered mobile data speeds for users to access the (mostly) free Internet content. Therefore they wanted a mechanism by which they offer an alternative or additional content they can generate revenue from and control what content the user has access to. Flexible content distribution platform and flexible service provisioning are by-products and not the core issues.
With IMS revenue generation may not be focused on the end user. It could well be based on a sharing revenue with 3rd party content providers or by selling to marketers or retailers alike access to customers.
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