Wi-Fi is our Primary Wireless network

March 13, 2012 at 9:21 pm | Posted in Uncategorized | Leave a comment
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Wi-Fi is our primary network for connecting laptops, smartphones and tablets. You might be surprised to realize that Wi-Fi carries far more traffic than all 3G and 4G mobile networks combined, and will continue to do so in the future. Although mobile networks provides us with an umbrella of coverage, we tend to consume data when we are stationary, and typically Wi-Fi is available as our preferred choice of connection. Even as mobile networks expand their wide-area data capacity, Wi-Fi will expand its role as a compliment to cellular.

Wi-Fi is our Primary wireless connection to the Internet [Cisco VNI

Why? It is more efficient for us to use a nearby radio connection than one far away. Accordingly, it is more efficient for us to connect to a Local Area Network (Wi-Fi) than a Wide Area Network (3G or 4G Cellular). Mobile Operators increasingly speak of moving the network “closer to you,” and Wi-Fi is usually just a few meters away, which is nearly optimal. Mobile Operators want to deliver the best service to you, and so they are working to deliver small cells closer to you, and to take advantage of Wi-Fi (where it is available) that is even closer to you. Think about how much you use Wi-Fi today–in the house, in the office–and consider how much more traffic is carried over Wi-Fi than cellular. Why? Cost and Speed.

Although cellular is the ubiquitous network that we can (nearly) always count on, Wi-Fi is the preferred network that we use to carry our network through the Fixed Internet. Although Wi-Fi had humble beginnings (see reminiscing about the early move by Steve Jobs to introduce Wi-Fi into Apple laptops) to replace Ethernet cables, it has become our default network.

Of the different ways that we can connect to the Internet, Wi-Fi will carry an increasing percentage of mobile data: 50% more than Cellular in 2015 [per Juniper forecast]. Femtocells, in contrast, are not expected to play a large role. In fact, Wi-Fi will be the primary way for us to connect to the Internet, exceeding wired (Ethernet) connections (Cisco estimates that Wi-Fi is the leading connection in 2015, according to their annual VNI study).

In 2015, Wi-Fi will still carry more data  traffic than Cellular [Nitin Bhas, Juniper Research

The original role of the femtocell, as “home base station,” has not been found as attractive as expected, especially due to interference with other cells that use the same spectrum. Subsequently, the femtocell technology has been repurposed into small cells (the Femto Forum renamed themselves as the Small Cell Forumthis February). Accordingly, the amount of traffic carrier by Femtocells is modest (although Small Cells are increasingly important and counted in the traffic carried by the Cellular network).

Wi-Fi will grow as a compliment to cellular Mobile networks, as Wi-Fi matures and acquires the best attributes of cellular: automatic, seamless, and secure (see “Wi-Fi, as easy to use as 3G mobile data“). Mobile Network Operators now recognize and embrace Wi-Fi for its benefits: Cost, Capacity, Coverage, Customer Experience. Mobile Operators particularly value Wi-Fi for its low Cost and high Capacity, as Mobile networks are simply unable to keep up with the demand (Capacity), and Operators are challenged to maintain the profitability as Revenue (for a unit of data) is falling faster than Cost (as Sue Rudd, of Strategy Analytics, has expertly deduced and illustrated), which reduces and eventually threatens profitability. Wi-Fi will help Operators to reduce their cost, and maintain the profitability of Mobile Internet for cellular operators

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Top Femtocell Vendor: Ubiquisys [ABI Research]

March 18, 2009 at 5:57 pm | Posted in Uncategorized | Leave a comment
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Ubiquisys is rated #1 Femtocell vendor – again – by ABI Research in the latest vendor assessment.

To view the ABI rankings of Femtocell vendors, please check out ABI’s “Femtocell Vendor Matrix” ( http://www.abiresearch.com/products/vendor_matrix/Femtocell_Equipment_Vendor_Matrix). Please note that access is free, but registration on the ABI Research website is required. Close behind are vendors ip.access and Airvana. I think that Huawei is a strong competitor, too, as they are leading the market in higher-capacity Femtocells (for enterprise deployments) and have some major trials in action.

“Ubiquisys comes out on top of the vendor matrix yet again both in terms of innovation and implementation.” reports Senior Analyst Aditya Kaul.  “Ubiquisys has the momentum going for it at the moment with multiple operator trials and rollouts across the world. ip.access has seen its partnership and close relationship with Cisco bear fruit. The firm has built upon its innovation and R&D expertise and is now in close competition with Ubiquisys. Closely following ip.access is Airvana, which has risen two positions from last year. Its modular approach allows it to integrate with multiple form factors and is one of the leading femto module suppliers to broadband gateway vendors.”

For additional detail on Femtocell vendors, please see my previous report, “Femtocell Product Scorecard.” that describes the overall Femtocell market maturity and vendor rankings.

Problem: Data Traffic Growing Faster Than Revenues

February 26, 2009 at 4:00 am | Posted in Uncategorized | 9 Comments
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Without a doubt, there is a growing problem of mobile data consumption vs. revenue: perhaps 100X growth of aggregate data vs. 2X growth of revenue (in the next 5 years). This growth in data consumption is reflected in operators’ measurements as well as analysts’ forecasts, and this trend is based on clear drivers that we can observe today. Operators recognize this threat to future Mobile Internet service profitability, and therefore Mobile Network Operator (MNO) profitability (as revenues shift inexorably from voice to data revenues).

data-traffic-vs-revenue

Growth is Real, and Exploding

The rapid growth of data consumption is real, has been observed by many operators. Vodafone, for example, exemplifies the rapid growth in the last, two years, from a trickle to a volume that exceeds their voice traffic in European markets that they serve (see figure). This growth has been driven by many factors, including flat-rate and modestly-priced data plans.

vodafone-data-vs-voice-traffic-2006-20081

Over time, this becomes problematic, as forecasts anticipate 100X traffic levels that threaten to overwhelm current networks. Current forecasts-based on observed MNO data traffic growth-anticipate at least a 2X growth per year over the next 5 years [Cisco, 2008], and perhaps growth of 300X to 500X over 10 years (from 2007-2017) [3Gamericas, 2008].  A recent Cisco study combined actual MNO traffic with analysts’ forecasts for mobile internet growth, and concluded that this trend would continue for at least the 5-year planning horizon, with data traffic more than doubling each year (see figure).

cisco-aggregate-data-traffic-2005-20121

An independent assessment came to the same conclusion (data traffic doubling each year), while tracking the growth over a longer time frame (10 years, 2007-2018).  The 3GAmericas study expects this trend to continue through 2018 (based on observed traffic and trends in service usage), as illustrated below.

3gamericas-rysavy-data-traffic-forecast-2007-20182

Recent traffic increases have exceeded this estimate: “six to fourteen times more data is being used on mobile broadband networks today than in the previous year.” Frost & Sullivan recently reported [April 2009] – with “average users downloading more than 5GB per month.”

Isn’t Increasing Data Use “A Good Problem to Have”?

Yes, increasing consumption of data services is a good problem to have … up to a point.  Operators have been trying for a decade to entice subscribers with data services, recognizing that this is their future, as voice usage eventually reaches a peak and pricing becomes commoditized. However, there is a dark side that is emerging: the rapid growth of data consumption is increasingly a concern to the degree that is expands faster than revenues; if costs increase without a similar increase in revenues, then the business is at risk, and something must be done to reduce overall costs to maintain profitability.  Essentially, “data traffic is growing much faster than data revenues,” [Mike Roberts, Informa, 6/2008]

Why Is Data Consumption Rapidly Increasing?

Data growth is expanding due to (a) broad adoption of data services by subs (espec. on flat data plans that encourage use), (b) better devices (such as the iPhone and imitators), and (c) more, attractive data services (such as YouTube, Location-Based Services, Social networking, IM, Mobile TV, and thousands of downloadable Apps).

A) More Subscribers on Mobile Internet Data Plans
Developed markets will easily see 40% of subscribers on a data plan by 2012, most on a “Flat Rate” plan that encourages use (without a penalty of incremental cost for incremental use) [Forrester, 2008].  This trend is so strong that mobile Internet subscribers are expected to outnumber fixed Internet subscribers in 2011 (see figure).

fixed-vs-mobile-broadband-subs-2005-2012-infonetics1

B) More Capable Internet Devices
“The iPhone.” Need I say more? OK, the IPhone has redefined how subscribers can use the mobile Internet, and established that the masses can and will browse, use Location-Based Services, watch YouTube video, download and install applications, and more. iPhone users consume many times more data than average consumers, even those with media capabilities (see figure). Consequently, everyone is rushing to achieve similar success, and more. The network effect is a radical leap in data consumption by End Users-exactly what the MNOs desired, as this establishes that consumers will use data services, if they are simple, fun, and useful. Smartphone users consume car more data than the average subscriber. And smartphones are becoming a common purchase of consumers (although business users led the adoption). By 2011, 30% of the handsets sold in developed markets will be smartphones [Gartner, 2008].

C) More Services Used
End Users are consuming more services as a result of better devices and a wider variety of applications. Apple’s App Store, for example, has defined a model of data services on demand that is widely appealing, with 500 M downloads in less than a year of operation [Apple, 2008], establishing that there is a large market for data services [Piper Jaffray, 2008].

smartphone-vs-phone-media-usage-infonetics-20081

Summary: Data Growth Based on Strong Fundamentals

MNOs have a serious problem on their hand-data consumption growing out of control and out of synch with revenues-that is based on strong fundamentals. We see it already in current use, and the future certainly holds far greater growth due to all of the drivers: more data subscribers, flat rate plans, more capable devices, and more attractive services. We will discuss this business problem in greater depth in the next section, “100X Data Growth vs. 2X Revenue Growth.”

100X Data Growth vs. 2X Revenue Growth

February 26, 2009 at 3:59 am | Posted in Uncategorized | Leave a comment
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Having established that data traffic is expanding rapidly (see the previous post, Data Traffic Growing Faster Than Revenues) for fundamental, long-term reasons, let’s explore the central business problem: high growth in costs vs. modest revenue growth.

MNOs have turned to data services for revenue growth, recognizing that End Users have largely satisfied their demand for voice communication. As prices fell for a voice minute of use (just as with Long Distance before that), subscribers could afford to purchase more minutes for their dollar, but at a point their demand was sated and they had no desire to consume more.  SMS has certainly provided an unexpectedly large increase in data use, but that is, like voice, largely played out. What next? Since 2001, with the introduction of the Mobile Internet, MNOs have focused on increasing revenue (APRU) by creating attractive data services: browsing, information, entertainment, and new communication services. Now, almost 10 years later, it appears that they have succeeded … and their problem has become, ironically, too much demand.

Data traffic is growing out of pace with revenues. Data is growing at a torrid pace since the introduction of high-speed and high-capacity, 3G networks a few years ago. Many operators have reported aggregate increases in data traffic far exceeding the 100% growth rate that is anticipated for the next 5 years. Revenue has certainly increased significantly, but only incrementally. No consumer is willing to pay 10X their current monthly bill, so the revenue increase is measured in a fractional increase of the current revenue, not multiples, and certainly not tens or hundreds of multiples.

The Danger of Flat-Rate (Unlimited) Service Plans

The main culprit in unrestrained usage is unrestrained service plans: flat rate pricing. Although (like prepaid) these plans are simple for subscribers to understand, and very attractive in avoiding unpleasant surprises, they invite unrestrained use with no marginal revenues. Although consumers are attracted to unlimited plans, the operator is then stuck with a subscriber that is not generating any additional revenue. Eventually, flat rate plans will have to go, or at least be modified and restricted to manage costs and maintain profitability. We can already see caps emerging in mature, fixed, broadband networks, where the access cost is quite low (relative to mobile Internet): Comcast (in the U.S.) has imposed usage caps on high-speed Cable Internet service customers to limit excessive use and eliminate abuse, and ensure that costs do not balloon, so that service and pricing is maintained for normal customers. Flat-rate pricing is unsustainable, leading to unrestrained usage with no incremental compensation.

Flat-rate plans have been very popular with subscribers; Operators have successfully employed flat-rate plans to sign up a wave of new users to 3G data plans.

  • Significant adoption:
    “Vodafone says it signed up 2 million consumer customers to its flat-rate mobile Internet plans in 2007.” [“Mobile traffic boom to revive base station market, Mike Roberts, Informa, 7 July 2008]
  • Mobile Internet is included:
    Vodafone UK includes access to the internet and email on their mobile as an integral part of the monthly price plan. “Every plan will automatically include internet access”(Note: for post-paid customers, not pre-paid) [“Unlimited Internet on New Voda Plans,” Mobile Business Magazine, 7 May 2008]
  • Many operators employing Flat-rate Data Plans:
    “The best examples for flat, mobile broadband offerings can be found in the Austrian market. T-Mobile has launched Fairclick for €25 which includes 10GB data volume on HSDPA. When it comes to content flat fee, again H3G sets currently the top benchmarks. The X-Series which has been launched in the European H3G countries as well as in Australia and Hong Kong, comprises of a wide range of value added services, such as unlimited instant messaging, Skype calls, web surfing and mobile TV via Slingbox streaming.” [Arthur D Little “The World is Becoming Flat,” Technology & Media INSIGHT, 2008]

Whither Flat-Rate Plans?
Flat-rate plans have proven very popular with subscribers, and so they will be difficult for Operators to give up. I suspect that they will be slowly morphed and restricted to allow Operators to charge for some services, especially content and bandwidth-intensive services such as Mobile TV, or person-person video.

Data Revenue Doubling (over 5 years)

Now that the data services are becoming more popular, operators are striving for significant increases in ARPU-perhaps a doubling of average revenue per customer-as demonstrated by the excellent revenue/user of iPhone subscribers. Forecasts suggest that MNOs may see roughly a doubling in mobile data revenues over the next 5 years:

  • “Global mobile data revenues will increase 77% from 2007 to 2012” [Informa, 2008]
    “The traffic boom will be driven by a dramatic increase in the use of advanced applications such as mobile browsing and video-for example mobile video traffic will grow more than thirty-fold by 2012, according to Mobile Networks Forecasts.” [“Mobile traffic boom to revive base station market, Mike Roberts, Informa, 7 July 2008] Annual data services will more than double from $148 billion dollars in 2007 to $347 billion dollars in 2013 [Informa Telecoms & Media, 2008].
  • “Mobile data revenue will double by 2012” [Pyramid, 2008]
    “By our estimates, mobile data will account for 29% of the global mobile service revenue in 2012, up from 19% in 2007. Clearly, the mobile data opportunity is soaring: the 2007 mobile data revenue was more than double what it was in 2004, and we expect it to double again to US$300bn by 2012.” … and 20% of this is SMS in developed markets, 45% in Emerging markets. [“Mobile data revenue will double by 2012,” Dan Locke, Analyst Insight, Pyramid, 4/2008]

Note that this increase in revenue is largely due to IP-based services, not SMS (see figure). “In 2012, in emerging markets, SMS will still comprise 45% of data ARPS in contrast to less than a quarter in developed markets.”

ip-services-vs-sms-pyramid-2008

Operator Solution: Cut Costs

Rampant data use without commensurate compensation? Better cut the cost of the data use, right? That’s exactly what is happening. Operators are looking to reduce the cost of delivering each bit. This problem will not be solved with a single, silver bullet, but will require cost efficiencies in many areas, which is the topic of our next analysis: “Solutions for Expanding Data Usage.”

Solutions for Expanding Data Usage

February 26, 2009 at 3:58 am | Posted in Uncategorized | 1 Comment
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Q: What would you do if your business costs were forecast to increase 100X?

A: Find ways to cut costs!

Operators In Search of Solutions

Having established the long-term trend of exploding data growth (see previous analysis “Problem: Data Traffic Growing Faster than Revenues“) and the consequent threat to profitability (see previous analysis “100X Data Growth vs. 2X Revenue Growth“), Operators are already looking for ways to offload or eliminate cost, and multiple solutions will be required. The problem represents a severe threat to mobile network operators (MNOs): perhaps 100X growth of aggregate data vs. 2X growth of revenue (in the next 5 years). This unrestrained growth in cost is not just a threat to the nascent mobile internet business, but to the entire industry, since the MNOs rely on mobile Internet services for revenue growth. If your Cost Of Goods Sold (COGS) increased 100X, what would you do? Find ways to cut out fat!

This problem is so severe that it must be addressed systemically, with multiple solutions. Since the growth in cost is 100X, no single fix can deliver that reduction in total cost of data delivery. LTE is not a silver bullet that can magically solve this problem: LTE offers, perhaps a 6X cost reduction against a tide of 100X growth in use (and therefore marginal cost). Analysys recently examined the business case for LTE and found that LTE could cut the cost of delivering a MB of data to 1/6 of its current level: from € 0.60 to € 0.10 pr MB. Since the delivery of data service is composed of many components, each component will have to be scrutinized and cost-reduced for the system to reach the necessary cost reduction.

Where is the greatest amount of CAPEX and OPEX in the value chain, and what are the greatest opportunities for cost reductions? Here is a list of promising candidates for reducing the cost of a segment of the data value chain, listed from high-level applications to low-level bit transport (not in order to total, potential cost reduction):

  • Elimination of Handset Subsidy
    Operators seek to eliminate handset subsidy since it represents a large, initial, per-subscriber cost. Some markets already have migrated to this model. In the U.S., for example, Clearwire is pioneering this model by focusing on the End User benefit of using any compatible device to their network.
  • Handset OS standardization
    The current handset market is filled with many competitors-too many competitors-that split the effort in developing an delivering handsets and applications. Competition will cull the field to a smaller number. Operators have made this concern known and have already started to implement this, within their own domain. Unfortunately, when each carrier reduces the number of handset OSs used, it does not effectively reduce the total number of OSs in the industry, as each operator may have a favorite. This reduction will, therefore, take time to play out, as the industry slowly reaches a consensus and pares down the list of providers.
  • Prioritization & Content-specific Billing, Policy-Based Control & Enforcement, Subscriber-awareness, and Fair Use Enforcement
    Operators can be more efficient in delivering traffic by smoothing out demand (reducing peaks demand) by prioritizing usage into classes (e.g., conversational VoIP traffic has stringent delivery requirements, whereas email can be delivered using whatever remaining capacity is available, as “best effort” delivery). Overall data traffic can be intelligently managed, so that congestion is reduced. In particular, fair use enforcement is likely to be invoked to avoid a few users hogging the available bandwidth. In some fixed broadband networks, 5% of users consume 80% of the bandwidth. By significantly reducing peak demand, less network capacity is required, reducing network cost.
  • Flat, Enhanced Packet Core (EPC), Architecture
    In LTE, the IP access architecture is flattened and simplified, allowing the architecture to be delivered in fewer components and connections to be achieved with fewer hops. This significantly reduces the cost and increases the scalability.
  • IP Backhaul (e.g., via Metro Ethernet)
    This is the single, greatest opportunity for reducing Operating Expenses (OPEX), since transport costs represent as much as 45% of OPEX. High-speed IP backhaul is becoming available in metro areas, and can replace the use of costly and cumbersome dedicated circuits (e.g., E1/T1) and point-to-point microwave when connecting hundreds of cell sites back to the mobile network.
  • RAN Sharing
    Where allowed by regulation, multiple MNOs can share a single, common RAN, avoid duplication of capital and operational resources. This can save perhaps 30% of RAN costs for each operator.
  • Monitor Resource Usage
    Available bandwidth can be efficiently shared by use of active monitoring and policy control.
  • Femtocell and UMA
    These techniques promise to radically reduce the capital and operating expense of delivering mobile broadband, by (a) offloading traffic from the existing, macrocellular network to small cell sites installed in the Home and Workplace of End Users. MNOs not only offload traffic, but they also obtain significant cost reduction by obtaining free use of End User resources. Femtocells obtain free backhaul from the End User; UMA obtains free backhaul, radio (Wi-Fi) and spectrum (Wi-Fi).
  • Increase RAN Capacity (e.g., Spectral Efficiency via LTE)
    By delivering more bits to more users over the same spectrum, the cost of radio spectrum (a large, initial investment that can be $1 Billion or more) is reduced. Ongoing improvements in radio techniques continue to provide greater and greater efficiencies, delivering 10X capacity improvements from current to planned systems (i.e., recent advances included in HSPA+ and LTE, such as OFDMA and MIMO).

Only by relentlessly and systemically reducing the cost of each of the components can we hope to maintain profitability as traffic (and cost) continues to increase dramatically. Femtocells, especially, hold a great deal of promise as they can simultaneously cut away the major CAPEX and OPEX costs-as described separately in “Femtocells: A Key Cost Reduction, via Offload.”

Femtocells: A Key Cost Reduction, via Offload

February 26, 2009 at 3:57 am | Posted in Uncategorized | 1 Comment
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Femtocells, in particular, represent an excellent method for MNOs to offload this expanding data use onto End Users’ networks-completely relieving the MNO of major CAPEX and OPEX costs! When an End User installs a femtocell in their home, the MNO obtains:

  • free or reduced cost radio access network (RAN),
    a major CAPEX and OPEX cost
  • free backhaul (from RAN to network) and site rental,
    the major OPEX cost

This solution may revolutionize the way that MNOs deploy their radio networks: instead of purchasing and installing very expensive “macro” cell sites to cover large areas, the MNO partners with the End User to deploy many, cheap, femtocells to deliver capacity where the End User needs it. Certainly, femtocells can efficiently divert/offload traffic (from the MNOs) by delivering excellent coverage and high capacity access where people consume it (perhaps 75% of use in their Home and Campus/Office environments).

Operators need major cost reduction in the delivery of radio access, as the current method is extremely costly, so they will drive Femtocell technology to a successful outcome and deploy them wherever mobile internet is available for free backhaul. Without femtocells, MNOs are forced to deploy more radios, leading to costly RAN enhancements. And MNOs are increasing their spending on radio networks, reflecting their reliance on adding macrocellular capacity. [“Mobile Networks Forecasts: Future Mobile Traffic, Base Stations & Revenues,” Informa, http://www.informatm.com/networks, 7/2008]

In a very short time, femtocells may become the dominant method of delivering coverage and capacity to subscribers. Operators are just starting to deliver service with femtocells costing $200, but the Cost Of Goods (COGS) will undoubtedly drop quickly as Femto deployments expand from thousands to millions.

Although Femtocells are an excellent way for MNOs to reduce or eliminate some of their largest cost components, femtocells are but one of many ways that MNOs will cut costs in delivering data services (enumerated in a previous analysis, “Solutions for Expanding Data Usage“).

Enterprises: UMA or Femto?

February 14, 2009 at 5:38 pm | Posted in Uncategorized | Leave a comment
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Q: Which solution best serves an Enterprise or Campus: UMA or Femto?

A: UMA, then Femto

Summary: the best approach for an enterprise is “UMA first, Femto later”—the same recommendation that I’ve made for individual subscribers at Home, but for different reasons. Enterprises can start savings today with UMA. This allows the enterprise to reap significant savings now, with an Enterprise Mobility solution that can evolve and use Femtocells as they become available. No use waiting on a cool, new technology to save the day … especially when you have no idea on what benefits and pricing will be offered to you.

Our company agreed to deploy “UMA now, Femto later.” We easily came to this conclusion after a recent, enterprise-wide review of UMA vs. Femto with our IT and Telecom team for a moderately large, multi-location company (2,500 employees in large and small offices around the world). It is a relevant question for enterprises, with UMA available and Femto coming. We concluded that we should start the savings now for several, independent, use cases:

  1. At Work or On Campus: Reduce Mobile Charges, and potentially eliminate Wireline service (PBX/CENTREX/VoIP)
  2. When Roaming: Eliminate Roaming Charges
  3. At Home Office: Eliminate Wireline + LD Charges

Note: Any Enterprise can start using UMA for selective End Users, for each Use Case.

uma-vs-femto-for-enterprise-and-home

What Benefits Will Operators Provide With Femtocells?
Start saving with UMA today, as we do not know what the future holds. The undeniable truth is that Enterprise femtocells do not yet exist, we don’t know for sure when they will be deployed, or what benefits (if any) will be offered to the Enterprise by the Mobile Operator. So it makes no sense to put off savings, if your operator is offering them (as is our case in the U.S., with free, unlimied voice and data service using UMA over Wi-Fi).

Femtocells, when available for the Enterprise, will be welcomed by the End User but will present new concerns for the Enterprise:

  • It is easier for the End User to use Femto—no change is required (versus learning how to use UMA over Wi-Fi).
    To eliminate any learning curve, I suppose that the handset could be pre-configured for the user to use the (a) enterprise WLAN and/or (b) Home WLAN, but that is still a manual process that is not fun to consider for 1,000 handsets. I believe that this step (and others) can be automated for some devices, such as automatically configuring BlackBerry devices with the BlackBerry Enterprise Server (BES). However …
  • It is not easier for the Enterprise to use Femto—many changes are required.
    As I discussed with my IT organization, it requires a lot of carrier- and equipment-specific work for the carrier and IT organization to integrate the femtocells with the Enterprise routing and power, resulting in a carrier-specific configuration that locks the Enterprise to a single carrier. The enterprise will, quite literally, be an extension of the Mobile Operator’s Network, with lots of femtocells attached to their walls and routers. I worked for AT&T Mobility when we pioneered this solution (“Wireless Office Service,” using an earlier, more costly and complex microcell technology), and once installed, it is likely to stay in place due the inconvenience and cost of installing a new solution. Enterprise Mobility solutions are very “sticky” (and therefore extremely attractive for the Mobile Network Operator to lock in high-ARPU subscribers).

Eventually, for nearly all of us, Enterprise femtocells will be a wonderful thing for End Users on campus, just as they are in the Home. However, the technology is not there yet. Nearly all femotcells are low-capacity (up to 4 simultaneous calls), suitable for the residence. Only Huawei has a product that supports significant capacity (16 simultaneous calls) [see Light Reading report] and the first Mobile Network trials are starting (by Orange/FT and AT&T Mobility) [see Femto Trials and Deployments]. We simply can not predict certain, near-term success for enterprise femtocells with the confidence that we embrace Home femtocells. And, most importantly for enterprises, we will have to wait and see what service plans and benefits are offered to enterprises that allow their buildings to be an extension of the operator’s radio network. Will the mobile operator generously offer free, unlimited, on-campus voice and data service (as is offered with most UMA plans today)? Or will the operator be stingy, and offer no cost savings (as does Verizon Wireless with their “Network Extender” Home Femtocell, requiring the End User to purchase the unit, and offering no discounted/free usage)?

Conclusion: Reap savings now using free voice and data (using UMA over Wi-Fi) in the Enterprise just as at Home.

UPDATE: What Qs should an Enterprise ask regarding in-building wireless? Which technology would you deploy? Check out the excellent discussion on this topic, “Six Questions for Enterprise IT departments deploying Femtocells” at ThinkFemtocell. David & I discuss the pros and cons of Femtocell and UMA deployment in the Enterprise.

Femtocells Growing Up: From Small (Home) to Medium (Enterprise) to Large (Urban) Capacity

January 14, 2009 at 3:00 am | Posted in Uncategorized | Leave a comment
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Femtocells will grow in capacity, serving an increasingly broad set of coverage applications.

All the focus for Femtocells is currently on Home use, with the future pretty bright there. Next on the Femtocell agenda: Higher-capacity Femtocells are desired to serve Enterprises, but these high-capacity Femtocells do not yet exist. So the evolution path is from the bottom (low-capacity) up:

1) Small capacity:       Home use
2) Medium capacity:  Enterprise use
3) High capacity:       Urban use

Home
In addition to the basic Femtocell and its core value proposition, there are several enhancements that are being considered (see this post for a list of future Femtocell features). Additional, location-specific features are foreseen: the femtocell can offer new applications and tariff options. Additionally, Operators are considering how to integrate Femtocells into a Home network that supports multiple media, content, and delivery channels (lots of wild options there).

Enterprise
Femtocells are already working hard to deliver to the Enterprise, too. Although the initial Femtocell deployments are in the residence, the same benefits can be delivered to work locations. Huawei is already bringing such a product to market (in their uBro Enterprise AP that supports 16 simultaneous voice calls-4x the capacity of other Femtocells that are targeted for the Home). This trend is called a “Super Femtocell” and it blurs the lines of what is currently considered a Femtocell vs. a Picocell. Linquistically, Femtocells might be considered to be smaller than Picocells, but the difference isn’t in cell size–the real trend here is to bring the benefits of current Femtocells (low cost, self-configuring, standards-based) into locations that would have currently been served by Picocells (e.g., an enterprise floor, building lobby, mall), where a lot of traffic needs to be served.

­Much attention has been devoted to Femtocells’ potential to improve indoor cellular coverage. However, Picocells have existed for a decade. Picocells already provide larger coverage and capacity than femtocells, which should make them well suited to small and medium businesses. Yet global shipments of picocells will total only about 18,000 this year. Why? According to ABI Research senior analyst Aditya Kaul, “One major reason for picocells’ low penetration has been their high total cost of ownership. Picocells are mostly operated and maintained by mobile operators, and every installation and service call costs them money. Many operators underestimated these costs when they initially opted for picocells.”

Enter Femtocells. The market has focused on femtocells that are solving the problems that made picocells problematic. Femtocells promise a far lower Total Cost of Ownership TCO). Picocells may improve and deliver or Femtocells may grow up and displace existing Picocell products.  

“There is, says Kaul, a time-limited chance for picocells to secure a larger market. “There is a gap between the small capacity provided by femtocells and that required by SMEs. Picocells can fill that gap, but only if the next generation has drastically reduced ownership costs. ‘Super femtos,’ which are essentially femtocells with picocell capacities are also being prepared for this market, and home-grade femtos could see some use in the SMB market, once interference and handover issues are resolved. Therefore picocells have a limited window of opportunity.” reports Cellular-News.

Urban
Many observers (myself included) expect that the next generation of radio, LTE (or WiMAX, if that’s your flavor) can be deployed most efficiently by using Femtocells to deliver the new coverage … and using the existing 3G network as the backup/alternative for broad coverage. Operators deploying LTE will undoubtedly use this approach and will provide subscribers with LTE devices that fall back to 3G for maximum coverage (Note: this is exactly the approach taken when each, successive generation of radio networks are introduced, such as 3G handsets that fall back to 2G networks when 3G is unavailable). Comcast has proposed this for WiMAX deployment. Clearwire similarly is delivering mobile WiMAX but is depending on a fallback network coverage of 3G CDMA. Femtocells would be an excellent way to build up coverage and capacity where it is needed most: in the home and office, where customers currently generate the greatest amount of traffic and usage.

Femtocell Innovation (Future Features)

January 13, 2009 at 7:16 pm | Posted in Uncategorized | Leave a comment
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It’s just a radio, right?!?

Actually, Femtocells are evolving quickly (even before they have been significantly deployed) to incorporate several categories of features. It reflects the hectic pace of competition and innovation in this space that will redefine how radio networks are deployed by operators … and how service is delivered to you and me. I’ve listed the features in the order that I anticipate that they will appear in the market (in chronological order):

Greater Efficiency
Initial deployments are using a (a) simple method of raw concentration using old switching technology (pre-Release 6 MSC) that will soon be superseded by a (b) more efficient method that concentrates only SIP signaling into modern softswitches (3GPP Release 6 “MSC Server”), not the bearer traffic. Predictably, he initial deployments will be simple and cost-effective, but the more efficient solutions will drastically increase the efficiency in the Operator’s network and therefore the cost savings. The GSM world is deploying the simple solution first, whereas the CDMA world is moving ahead quickly to deliver the SIP- and softswitch-based solution.

Self-Configuration
Millions of these devices will be deployed, so they had better be simple to install and configure. In fact, they need to be self-configuring. Currently, we’ve just got past the hurdle that Operators were concerned about the Femtocells interfering with existing macrocells. Self-configuration takes a much greater step, and ensures that the Femtocell automatically reflects the (changing) radio engineering of the network (neighbor cells, frequencies, handoffs permitted, handoffs not permitted, etc.). Like any access device, the Femtocell will grow up to incorporate a dynamic set of service policies. 

Applications
Many Home Zone apps are being considered and are most efficiently provided using the advanced, SIP/IMS approach (see Efficiency). “Operators in the US and Korea believe they will be moving to this second stage as early as late 2009, especially as the femtocell sector is now convincingly addressing the main operator fear about the technology, potential interference with other femtos and with macrocells.” reports Rethinking Wireless. Ubiquisys, in particular, has taken a leadership position in this area by developing its web-based services architecture, and has encouraged a growing eco-system of internet application partners through its association with the MIT’s Entrepreneurship Lab

Wireline Service, too
While you’re in the neighborhood, why not deliver wireline service, too, and pick up the $40/month revenue currently paid to the wireline provider? That’s the converged solution offered by T-Mobile (in their competing, UMA service, @Home) and other service providers (for more on the difference between UMA and Femto, see this post that compares Sprint’s Femto service vs. T-Mobile’s UMA service). It’s inexpensive to add to the Femtocell an ATA connection that provides wireline service. Customers in developed markets (US, Japan, Western Europe) will like this option, since they may be reluctant to “cut the cord” and this option allows them to continue using their corded phones in their home (how quaint!). Emerging markets could care less for this option: once you have your own, personal phone, why would you desire one that is tethered and connected to a wall? 

Capacity
In addition to Homes, Operators also seek a Femtocell solution for Enterprise locations–that will require a far greater capacity that for a residence. Although the initial Femtocell deployments are in the residence, the same benefits can be delivered to work locations. Huawei is already bringing such a product to market (in their uBro Enterprise AP that supports 16 simultaneous voice calls–4x the capacity of all other Femtocells that are targeted for the Home). This trend is called a “Super Femtocell” and it blurs the lines of what is currently considered a Femtocell vs. a Picocell. Linquistically, Femtocells might be considered to be smaller, but the real trend here is to bring the benefits of current Femtocells into locations that would have currently been served by Picocells (enterprise floor, building lobby, mall), where a lot of traffic needs to be served. 

Simplified Installation
Slightly different installation requirements exist for a residence unit vs. one that sits in a building lobby. Power over Ethernet (PoE) will be very attractive for enterprise deployments, allowing the Femtocell to be attached to the wall and brought into service with a single, Ethernet connection (borrowing a page from current, enterprise-grade, Wi-Fi gateways, such as Cisco’s Aironet product). Presto!

Home Network Gateway
Some operators are thinking that the Femtocell can be the center of a Home Network, including options such as Storage (Content cached for delivery, or for backup) and Wireless Networking (e.g., connecting to other devices using Wi-Fi). Cable providers (and other ISPs) like the Home Networking Gateway option, in order to deliver a complete, converged solution for a diverse set of client devices, as they are ISPs and are device agnostic. AT&T has been heard to specifically favor the Home Content Server option. John Stankey, President of Operations, commented that the product could be combined with a Wi-Fi gateway to develop “a media device that is used for storing content or distributing content. We would like to get to a gateway device that optimizes the home network” [as reported by FierceBroadbandWireless]. According to Airvana’s business development VP Paul Callahan, at least 90 percent of femtocell access points in four to five years will be integrated gateways. “That’s how we see the market and we’re seeing customer demand for that,” he adds. reports Unstrung.

Find and Fix Cellular Coverage Holes

January 13, 2009 at 12:22 am | Posted in Uncategorized | Comments Off on Find and Fix Cellular Coverage Holes
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Common problem: Considering changing cell phone companies, but you’re unsure of the coverage?

Solution: Check out the coverage at this web site
                   … or get your own, In-Home, Base Station (Femtocell)
                        possibly for Free (more here)

Poor coverage info is shared and available at Dead Cell Zones (http://www.deadcellzones.com/), where you can identify coverage holes for all North American carriers. What a great resource! If you are considering changing cell phone companies, you can go here and find out if there are coverage gaps that have been reported in your neighborhood, your drive to work, etc. Naturally, you can also check the mobile operator’s web site for their coverage map, but not all operators provide this data and they may be subjective or optimistic in their coverage maps. This site offers an unbiased report based on thousands and thousands of reports collected monthly. Share your coverage gaps with other consumers at http://www.deadcellzones.com!

So check for coverage at the Operator’s site (see below) and check for coverage holes at Dead Cell Zones.

Cellular Coverage Gaps: www.deadcellzones.com/

Cellular Coverage Maps:

T-Mobile coverage:                www.t-mobile.com/coverage/

Verizon Wireless coverage:    www.verizonwireless.com/b2c/CoverageLocatorController

AT&T Mobility coverage:       http://www.wireless.att.com/coverageviewer

Sprint Nextel coverage:         coverage.sprint.com/IMPACT.jsp?language=EN

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