The home is the most competitive location for providing telecommunications services today. Fixed, cable, mobile and VoIP providers all work aggressively to provide a full range of personal communication services (voice, instant messaging, email, social networking) to consumers, with a primary goal of winning additional mind (and wallet)-share from consumers when at home. Many within the industry have termed this fierce competition as the “battle for the building.”
For mobile operators, one of the most successful weapons in the battle for the building is the deployment of Home Zone services. A Home Zone service is based on a mobile operator defining a service area around a subscriber’s home where the operator can aggressively price service.
For example, when a subscriber is within his or her Home Zone (i.e., the subscriber is being served by the cell tower nearest to home), mobile calls are charged at land-line rates. Introduced in a number of Western European countries, these first-generation Home Zone services have proved popular with consumers.
Unfortunately, as these services are based on using the macro radio access network (RAN), they also present a number of significant challenges for mobile operators.
Revenue Leakage: As a subscriber’s “Home Zone” is based on the cell tower(s) that services their home, in many situations a subscriber could be served by the same tower throughout their day, whether at home, work or in transit.
Shrinking Margins: As the Home Zone service uses the macro RAN, an operator’s cost of service delivery remains the same. As a result, operators are directly sacrificing service margins.
Poor Performance: Unfortunately, the home is often ill-served from the macro RAN, as it is plagued by poor indoor coverage, particularly with high-speed 3G technologies.
To address these cost and performance challenges, mobile operators are beginning to launch the next generation of Home Zone services, known as “Home Zone 2.0” (HZ2.0). HZ2.0 services are defined by two primary characteristics.
First, they use a low-power femtocell or Wi-Fi access point deployed within a subscriber’s home to address revenue leakage and poor performance. The low-power access points overcome wireless service coverage issues. Moreover, micro radios improve the performance of the handset in the home because the radio resource is closer to the device. The signal is stronger and as a result, data rates are typically higher. Finally, offloading voice and data traffic to the micro radio access point frees up valuable macro network spectrum for outdoor mobile service delivery.
With a relatively small coverage radius (typically within the home), low-power access points constrain the home ‘zone’ and address the revenue leakage issue of alternative approaches. This improved Home Zone resolution helps operators keep the benefits of the HZ2.0 service confined to the home, where competition is most intense.
Second, HZ2.0 services use a subscriber’s existing home broadband access connection for backhauling mobile services. Broadband penetration in developed markets ranges from 35-60% of households. For mobile operators, broadband represents an ultra-low cost transport network that improves the margins for voice and data service delivery.
Also, a wired broadband network provides fast, reliable IP transport for new revenue-generating mobile data services. When delivered through high-speed 3G femtocells or Wi-Fi connections, subscribers get a true broadband mobile data experience.
Home Zone 2.0 is not just a concept; operators have begun to deploy services today. ABI Research recently published a report projecting the number of HZ2.0 (femtocell and dual-mode handset (DMH)-based) subscribers to reach more than 250 million worldwide by 2012.
Orange’s multi-national Unik/Unique HZ2.0 service offer, based on DMH and Wi-Fi, is among the most successful worldwide. Deployed for more than a year in France Orange’s Unik service has delivered a 10% increase in ARPU, and 15% of subscribers who take the service are new to
In more recent months, the
Mobile operators have begun to realize the strategic imperative of HZ2.0. The home is an extremely competitive telecom location and represents an enormous growth opportunity. However, the existing macro radio network does not meet the cost or performance requirements to win the ‘battle for the building’.
Micro radio networks (femtocells and Wi-Fi) offer advantages for mobile operators to address indoor mobile radio performance. By leveraging broadband and IP as a backhaul network technology, operators can dramatically lower the cost of delivering services.
HZ2.0 services relying on broadband access and low power access points (femtocells and Wi-Fi) are being deployed by operators today. UMA is the technology that powers HZ2.0.
Three years ago, when the concept of dual-mode handsets was just getting started, technology battle lines were drawn. There were two camps for providing seamless mobility in dual-mode handsets.
On one side was the ‘pragmatic’ UMA approach: UMA leverages the operators existing network elements and connects to the mobile core as a RAN gateway through standard interfaces.
The other side was a combination of IMS, SIP and VCC.
Constant battles were fought pitting UMA versus IMS (a RAN technology versus a ‘journey’ to an all IP core network); UMA versus SIP (a RAN technology against a session layer signaling protocol); and UMA versus VCC (a 3GPP standard RAN technology for mobile operators against a still-incomplete, almost-standard for fixed operators to connect the SIP core to the GSM mobile core).
In the end, UMA prevailed. It provides full-service transparency, security and scalability with a modest impact on the mobile core. If a mobile operator wants to roll out dual-mode service today, UMA is the only way.
As we enter 2008, a similar battle is shaping up around femtocells. The protocol for connecting the femtocell to the mobile core network has been divided into two camps.
On one side are the more pragmatic “Iu-over-IP” approaches. UMA, the only 3GPP standard Iu-over-IP approach, is leading the charge, but there are vendor specific approaches from Nokia/Siemens, ip.Access and others.
On the other side is some combination of IMS and SIP…again. Some have even erroneously thrown in VCC as a way to connect a femtocell to a mobile core.
As Yogi Berra famously said, “This is like déjà vu all over again!”
Will the SIP/IMS team be successful this time? It may be too early to say, but there are powerful forces behind the push for Iu-over-IP/UMA. Mobile operators do not want to burden the femtocell business case with new SIP/VoIP infrastructure. Many are drawn to the service transparency and relative simplicity of an Iu-over-IP/UMA approach. In the end, UMA is a proven, deployable technology.
2008 will be the year the two approaches duke it out. But if history is any indication, ‘pragmatic’ wins every time.
In December 2006, I wrote my predictions for UMA technology and markets in 2007. As we close out the year, it’s time to look back. All in all, it’s been an excellent year for UMA.
Prediction 1: Dual-mode handset models will more than double.
Reality: Correct! Reality surpassed our expectations.
At the close of 2006, there were just three models commercially available: the Samsung T709, P200 and the Nokia 6136.
As of today, there are many more devices: Samsung’s T409, T739, P260; Nokia’s 6086, 6301; RIM’s 8820, 8320; Sagem’s my419; and LG’s brand new KE520.
The Motorola A910, announced in 2006, became available for sale from BT this year. Given the Nokia 6136 and Samsung P200 are still available, the industry will close out the year with 12 commercially available handsets; a four-fold increase over 2006. Excellent progress.
Prediction 2: Subscriber count will go through the roof.
Reality: Half correct, we don’t have comprehensive reports.
Going into the holiday season, the
While
Prediction 3: More operators will launch UMA service.
Reality: Correct.
Prediction 4: VCC will actually be understood by the market.
Reality: Correct.
VCC has so many holes in terms of features and capabilities, no mobile operator will deploy it. The company that was leading the charge,
Now, what’s in store for 2008…
As reported by Unstrung Wednesday, Telecom Italia (TI) has shelved its UMA-based Unica service offer in favor of a ‘home grown’ SIP-based solution.
The article goes on to say that TI is re-launching Unica using a SIP client available on one phone, the Nokia E65. Ironic since the UMA-based Unica service was thought to have a ‘limited availability of handsets.’
The new service is part of TI’s quad-play push. My Italian is a bit rusty, but after reviewing the web site, I believe that subscribers of the new Unica service must have TI Mobile (TIM) GSM service, as well as TI’s fixed-line VoIP service Alice.
The new Unica service is about putting
It’s not the same
I believe this is a key element that was overlooked in the article and in TI’s decision. UMA-Unica and SIP-Unica are actually very different services.
The UMA version of Unica was about delivering mobile services over IP and broadband -- make the mobile service work better and cost less when the subscriber is indoors and connected via Wi-Fi. UMA is a mobile centric service for fixed-mobile substitution.
The SIP version of Unica is about putting a fixed-line VoIP service (
In the end, the SIP-Unica service has no technical barrier to entry. Any user can download any SIP client onto any E65 device. TI has chosen to package this up into a service. This is the same business model as Truephone. From a regulatory perspective, any operator (actually any person) can provide the same service.
It’s clear the UMA and SIP versions are different services and will appeal to subscribers with different needs. The UMA-Unica comes from the mobile division, the SIP-Unica from the fixed division.
The bigger question is: what type of demand is there for a mobile phone with a fixed-line VoIP client? We all remember how successful T-One was.
A final thought
It’s clear UMA technically works and operators are deploying it successfully (
Changing the underlying technologies of the Unica service won’t solve the politics. In fact, putting the fixed division’s service on the mobile division’s device is likely to make things even more contentious.
What do you think?
