Will Franks, CTO of Ubiquisys (an independent femtocell access point vendor), is pleased that the Femto Forum has given smaller femto companies a voice in the femto standards. He notes that operators have been largely silent on the state of their femtocell trials and market launch plans, suggests we’ll see “hard launches” during 1H2009 addressing many go-to-market business processes and indicates that some operators are choosing between enterprise and domestic markets for femtocells.
What’s your take on the standards process?
The Femto Forum, instigated in 2007 by Ubiquisys, has been instrumental in co-ordinating good input into the 3GPP standards bodies. It’s given smaller companies like Ubiquisys a voice. The basic principles were agreed quickly at an early stage, and there has been a blend of different contributions from vendors. Our ambition to get the standards ratified by the end of Q109 is very demanding but is likely to be achieved thanks to some Herculean last minute efforts by operators and vendors.
And the state of the femtocell market?
This is a non-trivial question – it’s not just about technical aspects, but involves business, IT, distribution, regulatory, consumer expectations, access management and systems integrators.
There has been relative silence in the market. Operators are not willing to talk because they want to maintain a lead over their competitors. Vendors can’t talk – it would breach confidentiality.
However, I would still expect to see “hard” launches of femtocells during 1H2009 with other operators following afterwards.
The technology is here today, but needs some “go to market” aspects to be put in place.
Which market segment will take-off first?
Different operators are taking different approaches:
- Some are addressing consumer markets first, then expanding into business markets.
- Some are addressing business first, then expanding into consumer
- Some have decided to focus on only one market.
We believe the business case is very good for SOHO/SME (Small Office/Home Office, Small Medium Enterprise), and some operators may start with that segment.
Small spaces within enterprises also make sense, for example branch offices and home workers.For large areas within enterprises, femtocells compete more directly with picocells, because the higher value of a contract justifies more expensive tailored installations.
Can femtocells meet the higher traffic density/demands of Enterprise?
Where there are hotspots of high demand in dense office environments, we’ve found that there can be over 70% overlap between femtocells for voice calls. In other words, femtocells can extend their range to share high traffic peaks. Calls can move between femtocells within a Closed Subscriber Group, and this works even with current standard 3G handsets.
Femtocell pricing is a volume driven market. The consumer market is needed to create the market size and reduce costs. Enterprise markets are not quite so sensitive to the femtocell device cost, but are just as sensitive to the overall solution cost.
The SOHO/SME market itself is still huge. For example, within the UK, there are approximately:
- 4.5 million small companies (0-49 employees; excludes home workers of large companies)
- 27,000 medium companies (50-249 employees; excludes branches of large companies)
- 6,000 large companies (250+ employees).
Tell us about some other technical aspects of getting femtocells to market
One area concerns activation (of the femtocell). A SIM card within the femtocell is optional. We’ve found that operators like to use this method. It takes a long time to use alternative systems, a factor that concerns IT deployment people. We believe a majority of our customers will start with SIMs and later move onto (digital) certificates.
So an example of the activation scenario for a new femtocell might involve:
- A SIM being provisioned for the femtocell access point
- A new Femtocell account being created
- The Closed Subscriber Group being provisioned into the femtocell using TR-069
- Provisioning of the femto-gateway using it’s dedicated management system
- Differential billing being provisioned, so that calls made via the femtocell are free or charged at reduced rates
- Emergency calling being configured, so that calls made via the femtocell are notified with the registered street address.
In these first deployments, the RAN gateway architecture has been chosen rather than IMS (except of course where an IMS architecture is already in place) to reduce the change of processes, risk and time to market.