Femtocell Operator News and Opinons

Femtocell service to launch in Japan January 2009. Why IMS?

Softbank Logo Softbank Japan announced this week that it plans to launch a femtocell product in January 2009 and has awarded a supply contract to NEC. Unlike mainstream femtocell developments, this uses a different network architecture with calls made and received using the SIP internet protocol which is commonly used to handle Voice over IP (VoIP) calls rather than the existing mobile network core networks via the Iu interface. Why the different approach?

Softbank, a large Asian conglomerate, bought Vodafone's Japanese subsiduary (Vodafone KK) in October 2006 and has been growing market share ever since through an aggressive price war. Softbank also operates an ISP (Yahoo! Japan) which is the number 1 provider of DSL broadband to domestic premises and also bought Japan Telecom in 2006, supplying fixed telephony.

NTT DoCoMo and KDDI continue to mobile dominate the market. In April 2008, the market share for all cellular technologies was DoCoMo 52%, KDDI 29.5% and Softbank 18%.Softbank is growing its market share using heavy pricing tactics such as free calls between members of the same family, which both KDDI and DoCoMo now also offer. Softbank continue their success in attracting customers, ranking first for 16 consecutive months in mobile subscription growth in Japan. DoCoMo continue to promote the benefits of their 3G network, on the basis that it provides more capacity and coverage than competitors.

What effect the price war has had on ARPU (Average Revenue Per Subscriber) and profitability remains to be seen.

Femtocells allow Softbank to address the concerns of their customers about poor indoor coverage (compared to 2G and other 3G networks), and maximise the growth of mobile data services combined with their broadband ISP service.

The Japanese market has often taken a different technical path from the rest of the world.

  • Rather than deploy GSM, a variant known as PDC was developed. Whilst the core network is very similar, phones and radio equipment is quite different. This held back the Japanese electronics industry from enjoying the early bonanza as GSM was deployed worldwide.
  • Creation of the highly successful i-Mode web browsing and e-commerce system, which had strong takeup in Japan. Many content providers developed and continue to offer services using the system. Attempts to match the success of this service in Europe and elsewhere have not been successful, for both commercial, technical and social reasons.
  • There is a very strong interest and demand for electronic gadgets in Japan, with rapid takeup of new services and capabilities. The lengthy commute to work on public transport justifies the use of many portable devices. The extensive choice of handset devices in Japan has led the market for many years.

Japanese vendors participated actively in the development of the 3G UMTS standard, and have shared in its success through sales of infrastucture, such as NEC's cellsites and SonyEricsson phones. Foreign visitors can at last now make and receive calls when roaming using their standard 3G phones.

Softbank has migrated the vast majority of its customers to its 3G network (over 82% have 3G handsets today).

Softbank has awarded the contract for supply of their femtocell solution to NEC, which will subcontract the femtocells themselves from Ubiquisys. NEC will provide the systems integration. Other vendors included in the solution are not named in their press release.

Technically, these femtocells include a full cellular packet data core network (specifically the SGSN and GGSN functions) which allow direct connection to the internet without data traffic having to be routed back through Softbank's core network. There is still a femto-gateway which connects through to the IMS core network and would handle voice and some data sessions. Voice call handover between the outdoor and femtocell network is likely to be supported using the VCC standard.

Commercially, femtocells allow Softbank to achieve several goals:

  • Address any concerns about poor coverage and/or indoor data performance. A customer survey earlier this year identitied that customers were far more concerned about poor indoor coverage (81.5%) than outdoor (18.5%).
  • Develop their marketing strategy of selling to the family unit (free calls between family members)
  • Offload capacity from the main network
  • Capitalise on their ISP and fixed broadband assets
  • Encourage takeup of fixed/broadband combined packages
  • Take advantage of the high proportion of 3G users, perhaps with a view to migrating all customers to 3G in the medium term.

Why choose the SIP architecture rather than the mainstream Iu approach?

  • The Japanese market is keen to use the latest technology and be ahead. Long term trends point to IMS and SIP being the mainstream solution for voice traffic.
  • Additional call parameters can be used to increase the call quality and features associated with call handling.
  • Closer interoperation/feature set between fixed and mobile phones. For example, both a fixed phone and mobile phone could ring for incoming calls.
  • Much higher data rates and data capacity can be provided to users through femtocells. "It gives the customers the feeling they have the whole network to themselves"
  • Prepare the ground for early LTE 4G deployment using a similar network architecture.

Any disadvantages?

The following assessment is our best guess:

  • Although any standard 3G phone can be used (the IMS client resides inside the femtocell), new SIP capable phones may be required to take advantage of additional features. [Correction: 24/09/2008]
  • Handover to/from the femtocell may not be smooth because of additional overheads between the systems.
  • Visitors/guests to your home are unlikely to be able to use your femtocell, even if you wanted them to.
  • Voice calls made outside the femtocell will fall back to the standard 3G service.
  • Compatibility issues when operating in standard 3G mode and when roaming.


Field trials with Softbank staff will be extended to around 1000 access points from October, leading to full commercial launch in January 2009. Concerns about interference with the macrocellular network have proven unfounded - the system technically works well, although a different frequency for the femtocell is best. Femto-gateways and core network capacity has been installed to handle up to 40,000 access points, which presumably could be quickly increased to meet demand.


NTT DoCoMo has been offering a WiFi/cellular dual mode service for some months. It has also quietly been running a femtocell service since last year, and recently announced a new product upgrade from Mitsubishi, its femtocell supplier. No public plans for either type of service have been announced by KDDI.

Other IMS adopters?

The special situation of Softbank and the Japanese market allows them to take a different path. The rest of the industry seems set on a more conservative, compatible approach using the Iu interface to work with existing phones, core networks and services - at least in the short to medium term.


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