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The femtocell market is maturing before our eyes. Commercial femtocell service is now available from two of the top three mobile operators in the United States and the third is not far behind. Femtocell services have sprung up in Asia from Softbank in Japan and Starhub in Singapore, and many other operators will soon follow.

Despite this progress, it is important to look ahead and understand how the innovation of femtocells will advance. There are two key trends rapidly emerging in the femtocell market that will have a substantive impact on the future of the technology:

  1. Integrated Devices: Femtocells will rapidly become an added feature of broadband access devices already deployed in homes and businesses.
  2. The 4G Femtocell: The benefits of small cells for next generation mobile networks will result in broad exploitation.

Integrated Devices

Femtocell solutions today are stand-alone home base stations that provide an optimal solution to the “3C” problem of 3G: coverage, capacity, and churn. The stand-alone femtocell is proving the original femtocell model and will continue to be the primary vehicle for delivering in-building solutions.

However, the benefits of embedding femtocell functionality into other devices are driving integration efforts. The top candidates for integration are residential gateways, but other access elements like cable and DSL modems, and even IPTV set-top boxes, also present opportunity for convergence.

The drivers for integration are two-fold. First is cost. Integration allows for shared bill of material elements like memory, processing, physical enclosure, cooling, and so on. We estimate at least $25 of shared BOM cost can be driven out of the design.

Second is security. Femtocells need the same type of VPN, firewall, and IPsec / IKE capabilities which already exist in residential gateways, so it makes sense to combine them. Plus, quality of service (QoS) policies may be implemented at the point of traffic origination – the femtocell – which enables service prioritization and Internet offload.

Due to these drivers, integrated femtocell devices are not far behind. In fact, the Broadband Forum recently ratified a standard for managing femtocells, TR-196, which builds upon the TR-069 protocol for remote automated management as well as the TR-098 standard which outlines how to remotely manage the home network and connected devices. Additionally, large broadband network equipment providers such as Thomson, Sagem, Netgear, and Motorola are already active in the femtocell market, so we can expect to be seeing integrated devices from them soon.

Diagram Article Femtocell Next 1
Figure 1. Integrated Femtocell and IPTV Set-top Box Example


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The 4G Femtocell

Some have been quick to predict the death of the 4G femtocell because of Verizon’s stated intention to not deploy them as part of its initial Long Term Evolution (LTE) network roll-out. While it is easy to jump on and off the femtocell hype bandwagon, it is not so easy to deny the compelling technical and market benefits of an LTE (or, for that matter, WiMAX) femtocell.

Simply put, a 4G femtocell is the least expensive way in which to deploy next generation mobile networks. Because femtocells leverage consumers’ existing high-speed broadband connectivity, they add just an infinitesimal burden for electricity, space, and cooling. In contrast, the cost of each macrocell site is orders of magnitude higher when one considers site acquisition, power, cooling, and backhaul.

Indoor coverage will be even more important for next generation mobile because much of the spectrum being targeted for these networks is in higher frequencies that suffer from poor in-building propagation. Even in the US, where the 700MHz band is targeted for LTE, the use of 20MHz channels to support LTE’s high data rates may result in increased interference and signal degradation as one moves further away from a macro base station – hence the increased need for 4G femtocells.

It is also important to remember how data services are delivered by a cell site. In both 3G and 4G networks, data services are provided over a shared channel, which means that all the active users in a cell site divide up that site’s capacity. With macrocells only, LTE becomes a victim of its own success if end users experience decreasing data rates as more and more LTE subscribers share the same finite bandwidth. In contrast, with 4G femtocells a residential LTE user only shares bandwidth with up to three other household users rather than with roughly 300 subscribers in the macrocell domain – a big difference when it comes to data rates and customer satisfaction Femtocells are just getting started. From integrated devices to 4G femto access points, we can expect many new innovations to continue driving the market forward.

Diagram Article Femtocell Next 2
Figure 2. 4G Benefits Femtocell

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