Guest columnist Rupert Baines, v-p marketing at picoChip, describes how he saw femtocell launches making a big impact on last week's Mobile World Congress
At Mobile World Congress in Barcelona last week we saw several femtocell announcements – from carriers making their plans on commercial launch, through vendors announcing their new products.
In the UK, Vodafone’s recent marketing promotion of their SureSignal femtocell (“Five bars. Guaranteed”), featured heavy advertising on posters and on-line. While this is the biggest launch so far, ten operators now offer femtocells – AT&T, Vodafone, SFR, China Unicom, DoCoMo, Softbank, Optimus, StarHub, Sprint and Verizon. More than 60 others are trialling, many with plans to launch this year.
As such, femtocells have shifted from a great idea to a reality. In its recent revision of market figures, ABI forecasts that by 2014 volumes will be hitting 40 million units per annum, while Infonetics predicts a more bullish 69 million.
The technology behind femtocells is far from trivial: operators have approached their deployments carefully and need to be certain that femtocells will not cause interference.
Clearly, they improve service for people with bad coverage, and there is a straightforward benefit for people who want voice and 3G data coverage. Perhaps surprisingly, femtocells actually improve the network for other users too, by reducing interference and freeing up capacity.
When a femtocell is switched on it detects its surroundings – searching for other basestations in the surrounding area – and self-configures to minimize radio interference (self-organising network, SON, or cognitive radio).
It then connects to the core network via broadband, so security, authentication and other services must be integrated into the device, adding another layer of complexity. The result is, however, an end-to-end solution delivering a personal cell service in the home with perfect mobile voice coverage and high data rates.
Data capacity is a particular concern for carriers: with the growing use of smartphones, wireless data rates are rapidly increasing. Unwired Insider states that traffic is growing 130% a year, but per subscriber capacity is essentially flat: although advances like HSPA+ increase data rates, the number of users is growing too.
New devices like Smartbooks or the Apple iPad will only make this worse. But each femtocell not only delivers full data rates to its users it creates new capacity for them too. FCC Chairman Julius Genachowski said last year that “One of the biggest challenges facing wireless is the looming spectrum crisis; there isn’t enough spectrum to meet the future demands of mobile users … femtocells are part of the solution.”
The initial technical challenges were essentially solved by 2007. The following year was about more subtle issues – such as interference management and security – and just as importantly saw the definition of standards that ensure that any femtocell can integrate with the network. In 2009 we saw productization of the femtocell and initial launches: it was the year the technology became real to consumers.
As a consequence, we are beginning to see the market become a consumer market with a value chain like those in the DSL and WiFi sectors. During 2010 and 2011 we expect to see the operator business cases established, widespread deployments and cost optimization, as volumes dramatically increase. The predicted 40 million units estimated by ABI represents a significant increase in volumes from the 350,000 expected in 2009.
As volume increases, costs will be driven down. The target chipset ASP, of course, requires technical excellence; but ever increasing functionality will be expected as well. The early pioneering spirit will need to be supplemented with less glamorous but no less important values of operational excellence. The femtocell ecosystem needs to ensure that it offers certified quality, a reliable supply chain and logistical support – in short, that it delivers on its promises.
The femtocell market is undergoing a period of radical change and market participants must keep pace. I believe one way of doing this is by incorporating as much functionality as possible onto the femtocell chipset to make it easier for OEMs and ODMs to quickly develop femtocells and manufacture in volume.
An inevitable consolidation of the market will take place as volumes ramp up, as it has done in the past with WiFi and DSL. It is crucial that the market is prepared for these changes, in order to benefit everyone in the value chain.
See also: Ubiquisys aims software platform at low cost femtocells