Industry embraces femtocells but faces hurdles

July 25, 2007
Telecoms

Femtocell trials are gathering pace, with Vodafone Group among the latest to evaluate the home-access-point technology. The UK-based operator group has been testing femtocells with a number of vendors since conducting an RFP process several months ago. Japan's SoftBank is also working with eight technology partners, including Alcatel-Lucent, Motorola, IP Access and Ubiquisys, in a series of proof-of-concept femtocell demonstrations lasting until December, with a view to commercial deployment in 1H08.

France Telecom and Sprint have also put out RFPs, and work on femtocells at SFR is reported to be well advanced. Meanwhile, Telefonica/O2 and T-Mobile say they are looking seriously at the technology. "If we can meet the cost targets, I think femtocells will be a very logical successor to home-zone services today," says Mike Short, vice president of research and development at O2.

But as operators embrace the concept, there remain more questions than answers when it comes to technical issues, implementation strategies and the business case. The International Conference on Home Access Points and Femtocells in London in July provided something of a reality check, as operators acknowledged that there was still much work to be done before the technology could be made available to consumers.

Jiri Varek, RAN-systems expert at T-Mobile International, listed 10 challenges that still need to be addressed, including integration with the core network and billing system; DSL backhaul issues and the ISP relationship; hand-in complexity and access/security problems; interference; synchronization and dropped calls during handout; and operation and monitoring.

Much of the discussion in London focused on the integration of femtocells into operators' networks, particularly when interfacing with the core network, with a succession of speakers calling for a standards-based approach.

With vendors and operators preferring not to wait for IMS, it was important to have standard interfaces to connect to the core network, said Nick Johnson, CTO of IP Access. He said that various combinations of Iub, Iu, SIP and Iu+ were available for connection from the femto Node B via the gateway to the core network but that it would be necessary to try out the various alternatives.

Kalle Jokio, chief architect of home-access solutions at Nokia Siemens Networks, said that with customer-premises equipment (CPE) coming from several different vendors, there needed to be a standard interface. "From the operators' point of view, the multivendor supply model is important in high-volume deliveries," he said. "The threat is that the industry becomes fragmented and there's no advantage of scale of industry and there are interoperability issues."

NSN said Femto Gateway, the femtocell product it announced this month, would use a standard interface to connect to the operator's core network and said it would cooperate with femto CPE vendors to "ensure interoperability of their equipment to the NSN interface." It is also collaborating with DSL CPE provider Thomson to develop an integrated femtocell residential gateway, with commercial deployments planned for 3Q08.

Not all delegates were won over, however. Steve Shaw, vice president of marketing at UMA specialist Kineto Wireless, described NSN's approach as a "vendor-specific protocol" that other femto vendors would have to comply with. "I'm sure IP Access, Ericsson, Alcatel-Lucent, NEC and Motorola can't wait to build a femto that conforms to the NSN specification and vice versa," he said wryly.

Shaw said that UMA continues to be the only published, industry-recognized standard for femtocell backhaul and that the "minor work" to extend the current UMA specification to support Iu was kicked off in October by the 3GPP, though Nick Johnson noted that 3G UMA standardization was still a "work in progress."

Shaw said it would be 2009 before any major commercial femtocell deployments occurred.

In terms of displacing current UMA services, Bruno Dachary, 3G-consumer-launch director at Orange/France Telecom, told delegates that UMA was already available and provided a proven customer experience. He said that new improvements would enhance the UMA proposition and that the available range of Wi-Fi-enabled 3G handsets would be larger in 2008.

Dachary said taht the major benefit of femtocells would be in data services but that femtocells were "a techno-push product" that would have to be managed by the operator. Orange/FT would look to rent product to its consumer customers, he said. "The issue is that we have to make sure we can manage this product, and we have to manage it," he said. "It's mandatory in our license."

Although a major benefit of femtocells would be in providing dedicated bandwidth for 3G/HSDPA and in extending data usage at home, customers mainly wanted to pay less and have good coverage, Dachary added.

Varek said that T-Mobile planned to invest in femtocells and that those plans had not changed in light of feedback from its U.S. subsidiary, which recently rolled out a UMA service. "For us, the main driver for femtocells is voice and improving voice quality," he said.

Stuart Carlaw, research director of wireless at ABI Research, said that regardless of their understanding of the technical aspects of the femtocell, each carrier is struggling to come to terms with establishing a sound business plan that can form the cornerstone of its offering.

In a research note accompanying his presentation, Carlaw said that the femtocell market would be subject to high amounts of risk and that the cost of developing products would only be truly nullified when carriers came to grips with the financial dynamics of the market. "Essentially, it is a process of understanding the costs and deciding whether or not they outweigh the cumulative costs of deploying the solution," he said.

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