Opinions about Femtocell Business Case

Should Small Cell rollout be driven only from the RAN department?

Bright IdeaBasestation planning, deployment, upgrade and optimisation have always been the remit of the operations department. Highly skilled professionals with budgets in the hundreds of millions or billions per year determine the best ways to invest in the growth of network quality and quantity. Tactical decisions about where/when/what to deploy are made on a daily basis. A raft of KPIs (Key Performance Indicators) report on their success and effectiveness.

But as the choices grow of how to tackle data capacity demands, is this simple division of tasks still appropriate? Many operators are adopting a wider view across their business, and not limiting the capacity problem to their engineering department. It’s no longer a simple demand/supply story:

  • We need to differentiate those customers who want premium service and are prepared to pay for it
  • We need to investigate wider business benefits and services other than simply connectivity (important as that is)
  • We need to consider first mover benefits, such as site acquisition, brand positioning, product leadership

That’s not to say that engineering departments aren’t aware of these issues. But the divisional responsibilities within large organisations often hamper their ability to make the smartest moves to benefit both their business and their customers.

An example: Winning the war on network abuse

One successful example of holistic thinking relates to the amount of network resource consumed by the top few users. Unlimited data plans had allowed and even encouraged excess behaviour, where in 2010 the top 1% consumed 52% of network capacity. According to the latest Cisco VNI report, that’s now been brought down to 10%, mostly through data cap tariff plans and by throttling data rates for users after continuous excessive consumption.

It could be argued that a period of unlimited tariff plans helped stimulate demand, increasing the take-up and early adoption of smartphones. Now that we’ve reached a more mature stage of consumer understanding, it’s time for users to be more aware of their consumption and either pay more or make more use of cheaper best-effort Wi-Fi.

Poor linkage between customer need and engineering budget

Enterprise sales teams have sometimes been able to link lucrative contracts to serve large multi-national companies with improved coverage and service. This hasn’t always been as rapidly deployed or effective as it could be. Budgets aren’t necessarily closely linked or inter-departmental goals fully aligned. The cost and complexity of traditional DAS systems have been difficult to justify commercially.

When serving areas that aren’t directly linked to new subscriptions, it’s less common for the business managers to get involved. Major events that affect the brand, such as the Superbowl, command executive board level attention. Many smaller venues may not.

In many cases, the responsibility and scope of the installation then falls back onto the operations team, who have to fund it within the constraints of their existing budget.

Appointing a Small Cell Business Champion

Simon Brown, CEO of ip.access, has witnessed several leading network operators appointing a senior business champion to exploit the opportunities that Small Cells provide. He believes that Small Cells are moving into a second phase of maturity which will see organisational re-alignment across different divisions.

A key part of this involves developing, trialling and evolving new business cases and product offers based around Small Cell technology. This view is further validated by recent research conducted for ip.access by the Yankee Group.

Volume Maturity Curve
 

Inevitably, this involves greater interaction between different commercial and operational departments within the organisation. The chart below highlights several of the workflows. This involves full business co-ordination, where processes between departments are in place, ideally beforehand.

Simon comments that “this is what the leading guys are beginning to do right now, and do with some success”. This theme is discussed in greater detail in our recent webinar: Small Cells Going to Volume.

Cross Business Interaction

Empowering the Sales Force

Proven technical solutions now exist which can quickly and cost effectively provide indoor coverage and capacity for all sizes of business. Some leading operators have already empowered their Enterprise sales teams to offer those to their customers. Evidence of this includes the recently announced Vodafone Sure Signal Premium and AT&T Project Velocity.

More recently, sales tools are emerging which allow onsite sales teams to assess and determine the cost to install in-building solutions. Commercial terms can be determined and agreed on the spot. We already see this in many other lines of business where on-site sales visits are made. Each contract needs to be sized, scoped and quoted which can often be done on the spot by a sales representative. Some operators are empowering their sales teams to do this for in-building systems by moving from custom solutions to standard, easily quotable solutions wherever possible.

With other operators, the sales force may not have been fully trained in an Enterprise Small Cell proposition. There may not be a business champion, looking to experiment, develop and refine the various business cases. It’s through experimentation of this kind that we’ll see the winning solutions emerge.

Summary

I would agree with the view that the next stage of success for Enterprise Small Cells will need the industry to move on from the purely technical aspects and into the business arena. We’ll need to see more innovation, more experimentation and even some risk-taking on the commercial side to establish the most successful use cases.

This can’t come from the RAN departments or operations teams alone. It needs senior executive sponsorship to stimulate multiple departments within these organisations, and co-ordinate a coherent approach. A few leading operators around the world are already making these changes and we will continue to report on progress.

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Further information:

Webinar: Small Cells: Going for Volume – Nick Johnson, ip.access CTO and Simon Brown, CEO

White paper: Accelerating the Enterprise Small Cell: Yankee Group, Feb 2014

 

 

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