Cloudberry launch small cell service targeted for smaller European operators

Tom GuldbergWe've seen several companies trialling and offering "Femtocell as a Service" to existing network operators, who may not have the in-house capacity, experience or budget to bring small cells onto their network as rapidly as their business demands. Some, like COLT and Virgin UK, have extensive fixed network assets. Other companies are bringing different capabilities to market.

We recently saw Cloudberry Mobile, a Norwegian based player, announce their offer and asked Tom Guldberg (CEO - pictured left) and Geir Ove Jenssen (CTO) to explain their concept further. They believe that disruptive change is imminent and say that "the telecom industry as we know it will be dead in two years."

What is it that you are offering today?

We offer "Small Cell As a Service", where we host a small cell gateway and remotely operate all the logistics of rolling out residential and enterprise small cells. We understand how this needs to interwork with the internal business processes of the operator, and can also advise on the most appropriate marketing strategy.

Our focus is on the residential and enterprise markets and we will subcontract and/or partner to serve both worlds. From our background while working at Network Norway, which pioneered the concept of enterprise small cells in the region, we've gained considerable experience of what it's like to launch and operate this kind of service as an operator. We gained both the marketing and technical expertise that allows us to reduce the risk and timescale to deploy small cells, which we believe could give smaller operators a differentiating advantage.

Our target customers are the smaller network operators in European countries, typically the 3rd or 4th, who don't have such large network assets as their larger competitors. Our solution may also be attractive to some MVNOs. By providing small cells to their own customers at the primary places where they are used, we can help differentiate the service they deliver and give them a significant competitive advantage.

Why small cells?

In Scandinavia, there has been a clear shift from fixed to mobile communications. Already more than 75% of voice calls are mobile to mobile. At a time of economic uncertainty and business volatility, companies like to stay flexible. They want their customers to reach a person, not a company and are confused as to why they should need (and pay for) two separate lines. We expect to see this regional trend continue to spread across the rest of Europe.

The poor quality of indoor coverage is a growing problem. There is s perception that quality is steadily decreasing and customers are reporting that their mobile service isn't as good as before. This may be partly due to the switch from 2G to 3G, which uses a higher frequency and so has poorer indoor penetration, and/or related to network congestion from heavy data traffic load.

Today, many new office buildings being made of materials that are unfriendly to wireless signals, such as concrete and glass with reflective coatings, which exacerbates the issue. Older techniques to solve the problem, such as DAS (Distributed Antenna Systems) are simply too expensive, and so operators are turning to small cells as a much more cost effective solution.

We've found that customers don't really mind how the problem is solved, but they are insisting on improved service.

With this background, operators are looking for a solution that keeps CAPEX and OPEX down At the same time, they may not have built up the necessary in-house experience and capacity to do this themselves.

What mobile services are enterprise customers looking for, apart from good coverage and capacity?

For voice, we believe that Mobile Centrex combines very nicely for companies with more than 10 employees. They aren't willing to stump up the full cost of their own dedicated PBX and so are more than happy for their operator to host this in the cloud. A combination of Mobile PBX and small cells is very powerfull, bringing features such as a private numbering plan, call transfer, attendants and even hunt groups.

For data, some customers might not want Wi-Fi on their premises. We find that most businesses want their small cells configured in open mode, so that anyone can use them including their visitors. They don't want the hassle of specifically authorising or configuring access permissions for each guest, as sometimes is done for Wi-Fi.

What proportion of traffic did you find was carried by indoor small cells, and will this change?

People think they are very mobile, but actually most of our time is spent at the home or office. We can't consume a lot of data when moving. Of course there are exceptions for those in different jobs, but we found that at least 50% of traffic was handled in the office. Where customers also had a small cell at home, this increased to around 70%.

[Ed Note: This may make the economics of installing small cells quite attractive for some MVNOs, such as Virgin UK are planning]

When do you think LTE might be relevant to deploy inside an enterprise, and what would the trigger points/factors be to justify it?

The main factor is the installed base of handsets and their capabilities. The first generation of LTE smartphones is emerging (e.g. Samsung Galaxy S3 and iPhone 5). As these become more prolific/prevalent, we'll also see them present in the enterprise. This will take some time, but is inevitable.

In terms of security, 3G is already good enough and would not justify a move to LTE alone. What is different is the low latency and high speed. The short call set-up time of LTE makes it appear amazingly fast and provides an excellent user experience. HD Voice also attractive, but some operators are rolling this out using 3G too.

So for the time being, 3G is the current technology and serves a very large installed base. The 3G technology has proved to be extremely elastic and adaptable, and continues to provide good capabilities. When combined with small cells, it can deliver the quality of user experience that customers want today.

View our 2 minute video interview with Geir Ove Jenssen

For more specific information about Cloudberry, visit their website

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