Femtocell Opinion, comment and reviews

An Update on the Russian Femtocell market - April 2011

russia_flag100Femtocell trials and interest stretches across many parts of the world. The recent Femtocell conference in Russia highlighted strong interest and developments in the region. With widely available 3G service, rapidly advancing DSL broadband availability and public access Wi-Fi providing competition, femtocells provide solutions for btoh coverage and capacity issues. Here we take a quick look at some of the recent progress we've heard of.

What's the landscape of Russian Mobile Networks

According to Wikipedia statistics, there are three large national networks:

And a number of smaller players (with one in between):

  • Tele2 Russia 18 Million
  • Various others each <5Million totaling around 15 Million

This gives a total of just over 200 Million subscribers. Almost all networks use the GSM/UMTS standard.

All of the larger networks offer full nationwide coverage. As found in other large countries such as the USA, smaller regional networks compete by offering local services but the scale and coverage of national networks attracts more customers.

Wireline broadband internet using DSL is being rolled out rapidly. Currently lagging behind other countries at only 26% penetration at the end of 2009, it is forecast to reach 60% of homes during the next 5 years.

The picture might change slightly for 4G

Yota launched a nationwide WiMAX network and has about 350K subscribers. They recently renegotiated their spectrum licence to use LTE instead and have raised $2Billion to build out a nationwide LTE network covering 180 cities in the next 3 years. They've also agreed to supply this as a wholesale service to all the national networks, effectively allowing them to introduce LTE more quickly and at lower cost.

It seems likely that wide area LTE coverage using conventional macro basestations will be deployed first, before LTE femtocells could be used for in-fill.

I'm speculating here, but in the longer term, the national networks might deploy their own LTE femtocells to capture the majority of the traffic in dense urban areas, relying on the Yota network to handle the wider area traffic elsewhere. However, even LTE femtocells would require high capacity backhaul (meaning fibre to each femtocell), which may be difficult to provide using the current infrastructure.

Femtocell progress in Russia

With residential tower blocks being a common feature of many Russian cities, coverage is difficult (and/or expensive) to provide for those on higher floors or inside blocks on the first floor using traditional macrocell towers. Femtocells, connected through the rapidly spreading DSL broadband offers a cost effective solution for this problem.

It is said that many people want to buy femtocells (and are prepared to pay the $100-$150 cost of them) and the timescale for a full residential service launch should not be too far away.

The major operators have been actively considering femtocells for some time.

Here's what we've been able to find out about each one.

MegaFon

MegaFon ran an extensive evaluation during 2009/10, conducting a "friendly user" trial with NEC and Huawei equipment. This was fully integrated into the live core network in Saint Petersburg.

A half year commercial trial pilot project was the next step. Three vendors were selected (NEC, Huawei and Alcatel-Lucent) with each running a system in a different region. These should all go live in the next 2 months (April/May 2011), with a view to full understanding the strengths and weaknesses of each, and final conclusion being reached at the end of 2011.

As with many femtocell trials, it's not so much the radio or communication technology that is causing the biggest headaches. Integration with the back office systems and business processes introduces a range of issues that need to be understood and dealt with. The trials will uncover those aspects and help shape the final commercial format of the offer.

A full nationwide commercial launch won't be decided until the end of the year, but provided the trials are successful, it is reasonable to expect a commercial launch in some form during 2012.

Details of these trials in the North West region are published on the Megafon website (in English).

MTS

MTS has also been running a trial in the 2009/10 timeframe, and also moved into a commercial pilot service in Moscow using Huawei equipment in December 2010. Telecom Paper reports that this corporate service, called Sure Access, will reach some 1000 businesses using up to 3000 femtocells within 2 years.

They are also planning to launch a corporate/enterprise femtocell service using Alcatel-Lucent equipment in Saint-Petersburg. The press release in Russian (here's the Google English translation) was issued at the end of 2010.

Beeline

Up to now, this large operator has not shown any interest in femtocell technology. However, they had a strong presence at the Femto Conference in Moscow last month. Rumours abound about their activities, but there are no published references I could verify.

So perhaps watch this space – surely they would not want to be held back by their competitors.

Is public Wi-Fi a credible alternative in Russia?

Today there is access to some form of WI-Fi available in most public places, often provided by one of the different telecom companies. Some of the larger providers have prepaid cards system. Others use a premium SMS to buy service – just send a text to a predefined shortcode number and receive back the username and password, with the cost being charged to your mobile phone account.

There doesn't appear to be further major investment plans to install significantly more Wi-Fi public capacity (such as we've seen announced by China Mobile for example). It appears that some years ago mobile operators decided that Wi-Fi was not a profitable business, but today some are resuming research projects perhaps more on the basis of traffic offload.

Summary

All the national networks in Russia are seriously evaluating 3G femtocells, but are at different stages from information gathering through to trials and early commercial pilot service.

The cautious approach taken by traditional network operators elsewhere is found here, but will be fruitful in the medium term.

The major issues around bringing a full residential femtocell service to market still include some of the back-office aspects (billing, customer care etc.). These are much less of an issue for enterprise or metro-femto deployments, which is perhaps why we see corporate/enterprise deployments being introduced more quickly.

 

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