We caught up with Anil Kohli, Head of NEC’s femtocell business, and asked him what had changed since we last spoke. NEC now has many trials and commercial deployments, with the use case spilling out from the original residential/consumer proposition to enterprise and outdoor. Anil told us how the deployment cycle time has shortened, believes that India offers great femtocell opportunities, but NEC is clearly concentrating on 3G femtocells worldwide rather than LTE technology at this stage.
How far has the femtocell market matured since we last spoke?
The femtocell industry has made considerable progress. We don’t need to explain what a femtocell is to an operator anymore, nor justify whether the technology works. Many have done a business case, leading to a sequence of field trials and commercial launch.
We’ve also moved beyond the simple residential indoor application. Operators are looking to use femtocells outdoors and to fill coverage gaps. They are also seeing femtocells as a pico replacement/substitute as the devices become more powerful.
How successful has NEC been?
Currently, we have 24 trials underway and 9 commercial deployments of which 2 are focussed on the SME commercial market (using multiple femtocells in a grid configuration). Almost half a million femtocells are in use today across these networks. Operators today want to move quickly and work with a single supplier who can deliver the complete solution – we are one of a few companies with the proven track record and scale who can do so.
How has the customer proposition changed?
The residential femtocell proposition has typically been targetting mobile customer with poor coverage. Where the network operator offers both fixed and mobile services, such as SFR in France, we’ve seen bundling with the fixed wireline service. I think we are likely to see this become more common, allowing operators to grab more customers for their fixed and/or mobile services.
We’ve seen three types of operator approaches:
- Some, for example Vodafone and AT&T, are still marketing their femtocells at improving the customer experience.
- Others, like Softbank, are bundling femtocells with other features as part of a wider proposition.
- A third category is focussing on enterprise and outdoor use in public hotspots. Where new operators don’t have so much legacy equipment installed, femtocells may be a quick solution to provide capacity and coverage.
Newer network operators may have national roaming agreements place to provide coverage where they haven’t yet built out coverage or capacity. Femtocells offer a solution to quickly offload traffic from roaming partners in targetted areas.
Perhaps femtocell takeup hasn’t been as rapid as some have forecast. Why?
There are a combination of factors which include:
- Timing is an issue for many operators. They don't want to launch until they are fully ready, which is why the number of trials is an important measure of progress.
- Many are waiting for the next generation of hardware, which only became available during 2010.
- Some have taken a year or more to mature from trial to commercial launch, while they made ready for mass deployment.
- Price point and hardware performance have been holding some back, but are now seen to be right.
- Finally, the uncertainty in the general economic conditions have postponed some projects in the past.
In the last 6 months, we’ve seen a large number of trials and activity. Operators no longer require such extensive testing that we saw in previous years – they know the technology itself is mature. This has moved the discussion with operators from the technical side to the marketing/commercial aspects.
The maturity of the femtocell solution has reduced the timeline for deployment projects from 9-12 months down to as little as 3 months for a small/initial trial. We’ve also moved ahead in streamlining the business process integration (connecting into the operators back office systems).
You’ve recently commented publicly about femtocell demand in India. Where does this fit?
[Anil was quoted forecasting deployments of 1 million 3G femtocells across India within 2 years. In the same article, Takayuki Kano, deputy managing director, NEC Corporation, added that the company is eyeing revenue of around $100 million from the femtocell business worldwide].
We see Indian operators fitting the 3rd category of femtocell network operators. There is huge demand for 3G service across the country, but operators have typically been awarded a very small slice of 3G spectrum (5MHz only). Femtocells offer a quick way to rollout 3G capacity in public areas and in enterprises to make best (re)use of the limited frequency allocated. We are trialling our system with one large Indian network operator and expect to be aggressively deploying femtocells in due course.
What are NEC doing on LTE femtocells?
I can’t say too much about our plans at this stage. Clearly, it’s a natural transition for NEC and we’ll want to add these to our portfolio. We’ll want to use the same common infrastructure as for 3G, the same business processes and management systems, so that it will be an easily evolution for our customers when the time comes.
Have you seen any demand from MVNOs for femtocells?
We have seen some interest, but in most cases the MVNOs are restrained by their host carriers. Perhaps some operators may allow this in due course – I’m sure it will come at some stage.
How do enterprise femtocells differ from smaller residential ones?
We’ve been working with several operators to deploy enterprise femtocells for SME (Small/Medium Enterprises). These have been installed to provide improved coverage, but Quality of Service (QoS) is the main offer. There are stronger requirements for availability, so we typically deploy multiple femtocells onsite. The larger enterprise femtos can handle 16 concurrent calls and transmit at a higher 100mW RF power level – enough for some 300-400 people.
We’ve found that enterprise femtos are much more cost effective that picocells, especially for smaller businesses with as few as 5-6 people.
How has NEC scaled up to meet this demand?
Our femtocell headquarters are based in Delhi, India which is staffed to man the growing number of projects. We have also recently announced a partnership with Aricent who will use their labs nearby to provide support services including managed services.
[Ed Sidenote: Almost all NEC's worldwide femtocell trials and deployments use Ubiquisys femtocells]