Mark Hay from HSL uncovers the GSM femtocell market

mark-hay-hslMark Hay, Managing and Technical Director of HSL, who have developed their own GSM femtocell subsystem, explains their benefits, provides a market update and even tells us how much they cost.

First some background…

What is a GSM femtocell?

Surely this is just the GSM variant of the standard definition of a femtocell?.

The Femto Forum gives a clear definition of femtocells which doesn’t restrict these to any particular technology – GSM, UMTS, CDMA and WiMAX are all viable options. Most of the industry attention has been on 3G UMTS femtocells which are in commercial operation around the world.

GSM picocells have also been available for some time from vendors such as ip.access. Picocells are typically higher RF power and range than residential femtocells and can also be used for public access areas. Both can connect to the core network through broadband IP.

Arguably, a GSM femtocell may be lower power, have a shorter range and be designed for self-installation by consumers.

Advantages of using GSM

  • Spectrum bandwidth 200kHz (compared to 5MHz for 3G UMTS). This means that it’s easier to set aside a single frequency for exclusive femtocell use. The possibility for smaller operators or MVNOs to own or share spectrum also exists.
  • Handles 7 or 14 voice calls (14 possible with the half-rate voice codec)
  • Supports text and low rate data (up to 300kbit/s – good enough for text email)
  • Compatible with all 2G GSM and 3G phones

And some disadvantages

  • Cost: Today’s 3G UMTS femtocells are said to wholesale at $100-$200, while GSM femtocells are $350.
  • Data: Limited data speeds. Wi-Fi must be used for heavy data applications

So why develop a GSM femtocell?

I asked Mark Hay, Managing and Technical Director of HSL, why they had chosen to build their femtocell using GSM technology rather than with the mainstream 3G UMTS approach. He believes that many operators have been brainwashed by vendors promoting 3G.

“The major problem today continues to be around voice – consumers want high quality and excellent coverage. For data use indoors, the widely deployed and low cost Wi-Fi addresses that need with speeds that easily exceed that available compared to a 3G femtocell, but both being constrained by the user’s residential wireline broadband. Therefore a combination of low cost voice femtocell using GSM with Wi-Fi for data makes great sense.”

What progress have HSL made?

HSL have developed a complete GSM femtocell subsystem which includes a BSC (Base Station Controller) and remote management interface.

The femtocell operates at 1800MHz. A separate low cost BSC acts like a femtocell gateway and requires an external IP security gateway (from one of the many standard products available today). The TR.069 management interface, as adopted by many other femtocell vendors, is used for initial provisioning and setting the IP security credentials. It is not used to manage the femtocell directly, which instead use traditional 3GPP methods used for larger cellsites through the BSC.

In order to reduce operational cost, self-configuration logic is incorporated. Default power and frequency settings can be overridden (but this is unusual). The femtocell will sniff and scan its environment, determining nearby cellsites. If there is a problem, the BSC can allocate an alternative frequency. Where GSM/DECT guard band frequencies at 1800MHz are available these are ideal for femtocell deployments because these aren’t normally used by high power cellsites, so interference problems are reduced.

State of the GSM femtocell market

Mark tells me he sees a renewed interest in GSM femtocells, with operators more willing to invest than this time last year – as long as it can be commercially justified.

He feels there have always been some operators more convinced with GSM for voice alongside Wi-Fi for data. Mark believes there is a solid case for GSM femtocells and that femtocells shouldn’t be about data in the home or office. 3G data services are good for use when outdoors.

In some countries, such as in the Netherlands, the GSM/DECT guard band frequencies are license exempt – you just need to register with the regulator.

Mark expects to see Holland launch commercial service in the next few months, with enterprise deployments in the UK imminent followed by a residential commercial service sometime next March/April. There is also activity in India, US and Belgium.

HSL is looking at both residential and enterprise opportunities, but can see it is easier to make initial sales for enterprise use.  He has seen interest from both large and small operators. 


Today’s product operates on the 1800MHz frequency band only. A Quad-band version is being planned and due out in Spring 2011.

Some interest has been expressed for an integrated unit, where the femtocell is incorporated with other electronic functions in the home, but not necessarily for combined DSL/Wi-Fi/Femtocells.

Cost reduction is a major focus, with current prices at $350 reducing to $250 by next April and targeted at $150 by April 2012. (These are indicative prices for quantities of 1000).


There are several types of competitor for a GSM femtocell vendor:

  • There is always the possibility of a Chinese vendor entering the market.
  • ip.access is an established independent GSM picocell vendor
  • 3G femtocells
  • Voice over Wi-Fi techniques, such as UMA. The scale of this market is limited compared to 2G because it requires specially adapted phones.


My take on this is that HSL have come a long way and do offer a commercial GSM femtocell product at an attractive price. I can’t comment on the maturity of the product itself – I don’t have access to lab or field trial test results.

The tradeoff between going down a GSM versus 3G UMTS technology path seems to be that GSM is compatible with every phone, rather than just 3G ones and the narrow frequency band used means that it is easier for spare frequencies to be set aside or even made available for general access.

On the other hand, 3G femtocells have already achieved a much lower price point because 100,000’s have been shipped, offer high speed data to satisfy the most demanding of mobile broadband applications, and can scale to traffic higher capacities.

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