Femtocell Views and Analysis

China Femtocell Symposium - Is China ready for rapid femtocell deployment?

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Published on Monday, 26 October 2009

Written by David Chambers

This month's one-day China Femtocell Symposium in Beijing was full of surprises, one of the most obvious being the number of attendees - well over 200 people turned up for this one-day event, not far off the 300 turnout at the Femtocell World Conference in London in June, and far exceeding the numbers at the earlier Femtocell Asia conference.

Why the tremendous interest in this technology? Could China be about the show the rest of the world what a large scale femtocell launch really means?

Numbers

Although I didn't attend in person, and can't find any other written report (in English) of the event, those who were there confirm the surprisingly large number of attendees  - it seemed to exceed the numbers expected considerably. What this shows is more than a casual interest in the technology too.

[Update: The organisers have informed me that 350 professionals attended the event]

It does seem to have been a mainly local event, with the majority of attendees based in Beijing, but others had travelled up from Shanghai and other parts of the country. It is not known how many delegates paid to attend versus those with free passes.

Attendees includes a wide variety of technology companies looking to understand the opportunity for femtocell products - these likely included some potential competitors to today's well known femtocell vendors and/or ODMs (Original Device Manufacturers) who could develop their own platforms for others to resell/reuse.

Technologies

As you may know, China has adopted two major international standards for mobile networks, and also created its own. There are three national service providers who are now all able to provide both fixed line and mobile network services. They have been allocated specific and different technologies to work with:

- China Mobile, the largest mobile network in the world by subscriber base, uses GSM and the Chinese 3G variant TD-SCDMA. It also plans to launch LTE-TDD fairly soon, but again the Chinese TDD variant which it hopes will be adopted in other countries. It's been struggling to increase takeup of its 3G service, with only 1.3M subscribers to date - tiny for a country with over 600M mobile phone users - and plans to triple handset subsidies which will cost it over $4Bn next year alone.

- China Unicom, also with a national GSM footprint was given the GSM 3G technology, UMTS, and thus has the widest range of mobile phones on offer. From 1st October, it started selling the legendary Apple iPhone, but it's pricey at over $700. There had been a "grey" market in 2G Apple iPhones in China, with estimates that at least 1M were in use last year despite it not being officially available from any network operator. The significantly higher performance and features of the 3GS model will surely spark strong demand.

- China Telecom, the encumbent fixed line operator, was given the CDMA network (previously run by Unicom). It has been trying to boost takeup of its 3G service, reportedly buying 4M lower cost ($150) 3G smartphone and featurephone handsets from 31 different vendors.

At the femtocell event, I understand that 3G UMTS and 3G TDD-SCDMA femtocells were shown. The 3G UMTS products are likely to come from domestic vendors (Huawei surely must have a strong presence here), with foreign vendors such as Alcatel-Lucent also likely to be well placed. With the market for TDS-CDMA femtocells very much focussed inside China, there would be several smaller Chinese femtocell vendors offering these products.

picoChip have an office in China and are known to have created a reference design for TDS-CDMA femtocells, which has been adopted by at least one femtocell vendor.

Speakers

Industry figures speaking at the event included Simon Saunders (Chairman of Femto Forum), Rupert Baines (picoChip) and Todd Mersch (Continuous Computing). There were also speakers from Qualcomm and various Chinese academic and regulatory bodies. The welcome address was given by Xie Feibo, Director of State Radio Regulatory Committee, MIIT.

I understand that the speakers from China Unicom and China Mobile who were due to present withdrew at a late stage. This suggests that there may be some sensitive industry information that they don't yet want to disclose - rumours abound of an upcoming femtocell launch in China in the next few months but details are scarce.

[Update: China Unicom publicly launched their commercial 3G UMTS femtocell - called 3G Inn - at the end of October 2009. See here for more details]

Networks are looking at femtocells for LTE

LTE, the 4G technology, which offers higher data rates, more capacity within the same spectrum, and better in-building penetration is being adopted by all three network operators in the long term. China has championed the TDD variant of this new technology, which can fit into a single band of spectrum and so make use of whatever frequencies might be available in different countries.

Nokia-Siemens Networks demonstrated an LTE-TDD femtocell at the show. This seems not to be targetted at domestic consumers, but instead for network operators to be able to rollout large numbers of LTE cellsites quickly in areas of high traffic demand.

Rumours of a major launch

With the re-organisation of Chinese telecom operators having been completed, each is becoming more competitive and looking at innovative new technologies to provide a strong lead. China Mobile has had excellent GSM coverage nationally, with many more cellsites than it's competitor Unicom.

China has very good broadband internet access in most cities, generally good GSM coverage too, but 3G is lacking in some areas.

3G has been delayed for quite some time in China, and takeup remains relatively poor.

Would it not be reasonable to assume that one or other might consider a large scale 3G Femtocell launch as a means to radically change the balance?

Rumours abound on this point - so should be considered carefully - but if Unicom were able to complement their recent iPhone success with a wide scale femtocell offer, they could gain considerable market share.

[Update: China Unicom launched their commercial service shortly after this article was written, at the end of October 2009. Read more about China Unicom launching femtocell commercial service].