Femtos still on the sideline

In an article published this month on Fierce Wireless Europe, Paul Rasmussen writes what many in the industry already know, that femtocells are still on the sidelines.

Mr. Rasmussen quotes Ovum analyst Steven Hartley saying femtos remain to costly and complex for a mass-market coverage solution.

Speaking quite candidly, Ericsson CTO Hakan Eriksson stated "the femtocell solves no p

roblem from my viewpoint."

Pointing out the obvious, Mr. Eriksson goes on to say that "all the devices that are generating mobile data are Wi-Fi enabled."

Not a good coverage play, not a good offload play... it's no wonder Femtos remain on the sidelines.

With more than 200m Wi-Fi access points installed in the world today, it seems that Wi-Fi is the dominate in-building wireless technology.

AT&T CTO: Subsidizing femtocells won’t fix our network

Wow, that's a pretty blatant statement, and it's the title of an article by Devindra Hardawar at Venture Beat.

We've been following the femtocell market since it's inception four years ago. 

It's clear the bloom has come off the rose, and that the reality of what femtocells can, and can't, do is clear.

I think what's really being said is that in places where the femtocell is deployed a long way from a macro signal, things work pretty well.

But in areas with marginal or good AT&T coverage, the femtocell introduces more interference, outweighing any benefit of added capacity.

In addition, by drawing a line in the sand saying "data on femtos count against data caps," AT&T has clearly pigeon-holed them into 'save' solution for people with zero coverage.

What about data offload? What about places with marginal coverage?

Certainly a Smart Wi-Fi solution would work. Wi-Fi, completely agnostic to the macro cellular network, doesn't interfere at all. Plus it's already in the places where people want coverage - the home and office. And it helps to drive offload, because 50-66% of mobile data usage occurs in the home/office.

We could have this problem licked in no time.

T-Mobile Femtocells: Yes, No, Maybe

Earlier this week Michelle Donegan at Light Reading reported that an unnamed source at the operator confirmed that "the carrier will have 3G femtocells as part of its product portfolio in 2011".

As one might expect, the post was light on details - there was no timeframe and no vendors because T-Mobile was 'still in the process of selecting them.'

Then today, Kevin Fitchard at Connected Planet posted that "T-Mobile USA has no plans to offer a femtocell and will continue to focus on its dual-mode Wi-Fi fixed mobile convergence strategy," adding "at least that's what we're hearing from T-Mobile."

I think the answer is clear:  a definite maybe.

It's a blog, so let's speculate:  Why T-Mobile would want to offer a femtocell:
Everyone else is.  ATT, VZW, Sprint all have a femtocell, they don't want to be left out.  Undoubtedly there are T-Mobile customers who would be willing to pay for a femtocell to get better coverage at home.

Why T-Mobile wouldn't want to offer a femtocell:
It's not at all clear that people want a femtocell service - especially if they have to pay for it.  Of course, some do, but recall that earlier this year the Femto Forum announced that there were 'more femtocells in the US than macro cell towers'.  They pegged the number at 350,000 units.

Let's do some math.  Between the three largest carriers in the US, servicing some 230,000,000 subscribers, they have managed to sell (or give away) 350,000 femtocells - or about 0.1%.  No wonder 2010 was the 'year of the femtocell', or was it 2009, or 2008..., or maybe it will be 2011.

Meanwhile, T-Mobile seems to be rocking the Smart Wi-Fi.  It's part of their hottest selling '4G' phones the MyTouch 4G and Google G2.  Plus with Wi-Fi installed in an estimated 50,000,000 homes in the US, Smart Wi-Fi has a HUGE head start when it comes to installed base.

Wi-Fi Playing a More Crucial Role in US Mobile Carrier Growth

…and femtocells don’t appear to be.

I was reading Roger Cheng’s latest piece covering AT&T’s use Wi-Fi. The company announced they supported 106.9 million Wi-Fi connections in Q2 2010. It’s certainly impressive.

But was struck me more was the utter lack of discussion about femtocells. Recall that just a year or two ago, AT&T’s femtocell launch was eagerly anticipated by the company, along with the mobile (and femtocell) industry.

Yet skip ahead, and AT&T continues to laud its use of Wi-Fi with nary a word on its femtocell deployment. It's like they have fallen to the side of the road.

Perhaps it’s reflected in a release the Femto Forum put out the other day. The Forum announced that there were “more femtocells deployed that macrocells” in the US.

At first blush, that sound like good news… until the details come out.

According to the announcement, there are ‘conservatively’ 350,000 femtocells deployed by Sprint, Verizon and AT&T in the US, versus 256,000 macro cells. But with the ‘big three’ serving about 230 million subscribers, 350k femtocells deployed isn’t very impressive.

Even converting to households, it isn’t much. I found another study which says 75.8m homes in the US have broadband, a pre-requisite for a femtocell, so we're at 0.4% penetration. (versus 62% for Wi-Fi).

I know, femtocells are just getting started, and there’s plenty of room for growth. But at the end of the day, ATT is touting it’s Wi-Fi connection numbers, not it’s femtocell deployments.

Informal Surveying

We have an informal survey on the home page of UMAToday.com that we use to capture some information and opinion from our visitors. It's not scientific, nor is it a well-distributed audience, but we do get pretty good responses.

For example, for the past few months, we asked visitors to answer: Do you plan to get a femtocell at home?

After tallying up several hundred votes, nearly 40% (or 39.6% to be exact) answered they never plan to get a femtocell at home, because they use Wi-Fi. Another aha moment for me. That's why we're talking about how to make Wi-Fi smarter and more beneficial to subscribers and operators. As we can see, customers are already using it to solve their coverage problems.

Ironically, another 40% (or 39.7% to be exact) answered they would get a femtocell 'as soon as they're available from my operator.' Is our audience clamoring for femtos? Certainly there's interest. In fact, 13.6% of our respondents told us they have femtocells now, but 8.1% said they'll never get a femtocell, because they don't need it.

It would be fun to dig into the responses in more detail, but these numbers give us an overall glimpse and, quite frankly, the numbers speak for themselves. Ready to vote again? We've got a new survey up today.

Kineto Turns UMA into "Smart Wi-Fi Offload"

Today Kineto, a leader in the UMA space, announced a new "Smart Wi-Fi Offload" solution. For all intents and purposes, it looks like they have renamed UMA into "Smart Wi-Fi Offload".

Not that it's a bad thing...

In the four years since UMA was introduced, there have been some major shifts in the market. Early UMA deployments were on focused on fixed-mobile substitution (FMS), and relied on feature phones (remember the Samsung G709?).

At the time, FMS (and FMC) were hot topics, but the mobile industry had never heard of an iPhone and mobile operators all believed that had more network capacity than they could ever want or need.

Skip ahead to 2010, landlines are a dying breed, subscribers are getting larger buckets of minutes and FMS is a natural occurrence. But the industry has been blind-sided by the meteoric rise of the smartphones, specifically web-driven devices like the iPhone and my Touch.

I was in a meeting with an industry analyst the other day who casually mentioned that he believes mobile operators will need to increase their current network capacity 10x in the next 3-5 years.

Consider that number for a minute. It’s staggering.

Now consider this: what are the options for an operator to increase their network capacity by a factor of 10?

• Add more segments and channels onto existing cells? A good, but finite, idea.
• Install more macro cells? Certainly that continues to be important, but even doubling the current number of towers probably wouldn’t increase network capacity 10x.
• Femtocells? Certainly this is an important technology, but there continue to be a range of growing pains.
• Wi-Fi is a great option. It’s already installed in the homes and offices of these ‘smartphone’ users, it doesn’t interfere with the macro network, and now with Kineto’s solution, it can be added as an application to the range of offending smartphones.

The reality is that to achieve a 10x increase in capacity, mobile operators are going to need to do all these things in earnest, starting today.

I think Smart Wi-Fi Offload is a good first step.

More Femto Optimism

I’ve been buckled down recently and haven’t come up for much blog air. But this seemed like an important thing to highlight...

Promising news from Infonetics for those with a vested interest in the femtocell market. In an October FMC and femtocell report, the research firm says that combined, sales of FMC network element equipment and femtocell equipment are forecast to grow to $7.4 billion worldwide by 2013. The report also stated the number of 2G/3G femtocells is expected to increase five-fold from 2009 to 2010.

"So far, we have found no evidence of the economic downturn having a major impact on the pace of FMC rollouts, and it has had only a mild effect on the femtocell space,” said Stéphane Téral, principal analyst for mobile and FMC infrastructure at Infonetics Research and co-author of the report. “In the first half of 2009, we saw unabated UMA rollouts at T-Mobile USA, Orange, and Rogers Wireless in Canada, with Turk Telekom joining the bandwagon more recently."

Co-author Richard Webb, directing analyst for WiMAX, microwave, and mobile devices at Infonetics, added: “As for the femtocell market…..We expect at least a dozen major operators to launch in 2010, giving this market a kick-start.”

You can read the report highlights on Infonetics.com.

FMC in the UK: Game On!

Today Vodafone announced, during a presentation at the Femtocell World Summit, a new femtocell product for the UK market available July 1. No actual press release yet, but there are several reports from the event.

Details of the offer a bit sketchy, but according to the Register (and other insiders), the Vodafone Access Gateway will cost t £160 as a one-off price. Alternatively there are bundled options with specific phones which run a monthly fee of £15 – £30. There may also be an option for subscribers with high-tariff packages to receive a femtocell for free.

It’s not clear what subscribers get in return. Most obviously, a femto offers excellent indoor coverage. Perhaps users will also get some type of discounted calling when attached to the femtocell.

Of course, Orange has offered it’s Unique service, based on Wi-Fi, in the UK for some time now. While there has never been nation-wide promotion of Unique, it’s estimated the company has sold between 250,000 and 500,000 Unique-enabled devices.

This leaves T-Mobile and O2/Telefonica as the two operators in the UK without some type of Home Zone service bundle. Looks like it’s Game On! for FMC in the UK.

AT&T's Plan to Drive Economic Growth

On March 10^th, AT&T announced its plan to rescue the US economy… I mean “to drive economic growth” through increased investment in their network.

According to the press release, “AT&T plans to invest $17 billion to $18 billion in 2009, in line with its 2007 capital expenditures of $17.7 billion and expected to exceed the planned investment of any other U.S. telecom company.”

Wow.

So, what’s AT&T going to spend on? They list four items:

• Expanding 3G service
• Increasing HSPA data rates
• Customer trials leading toward general availability of 3G femtocells
• Continued expansion of AT&Ts leading Wi-Fi footprint

So the company is going to invest in two in-building wireless technologies? Wi-Fi and Femtocells.

Followers of this blog know that I often wonder why AT&T doesn’t just use their enormous presence in Wi-Fi (already in U-verse, ships with 2Wire DSL modems, AT&T DSL subscribers already get free access to +20,000 HotSpots from Wayport/ Starbucks / McDonalds and more) to do a simple UMA dual-mode phone service.

Not that femtocells are bad, but when probably 50% of AT&T’s 15 million DSL households already have Wi-Fi, and they are the biggest Wi-Fi hotspot provider in the US, and they have an exclusive on the most popular Wi-Fi enabled phone ever, it just makes sense.

An unlicensed femtocell

The market is catching on to the benefits of home zone services, where consumers get mobile services that work better and cost less. For operators, the ability to offload the macro network and increase the performance of mobile services indoors, coupled with the ability to develop location specific home or enterprise services has driven increased interest in this market opportunity.

Typically we talk about the need for home zone services, irrespective of the underlying radio technology (Wi-Fi or femtocell). For consumer and service providers, the benefits are nearly identical.

But an interesting trend has emerged in the press. Recently there have been several references to the ‘unlicensed femtocell’, perhaps known by the more common name of Wi-Fi.

The comparison makes sense. Femtocells have a couple of generic properties. One is a low power radio designed for use in-building CPE. Second is the ability for these devices to be deployed as consumer without operator intervention. Third, they are ‘self organizing’, meaning they determine their environment and adjust the capabilities accordingly. Forth, the term femtocell is actually radio agnostic. ‘Femtocell’ is applied to CDMA, UMTS, EV-DO, GSM, LTE, even WiMAX. While the one thing these have in common is that the frequencies are licensed, why not add 802.11 b/g to the list?

Now before you think this is something I made up, there have been several references of late:

This article in DigiTimes (“Tecom Ships UMA Femtocells”) refers to ‘UMA femtocells’ being shipped to T-Mobile. Clearly not the classic definition, these were in fact Wi-Fi terminal adaptors.

This article in The Register (“Femto Forum Gets Big Ideas”) comments that “In the USA T-Mobile is already deploying 2G femtocells to provide coverage in customers’ homes.” True, but it is an 802.11 b/g femtocell.

This last one is perhaps the most interesting. Ozzie Diaz, Chief Technologies for HP's wireless business, comments on his blog (“Wireless Operators Getting the Runaround”) about the importance of local radios:

One operator who does seem to have a clue on making use of these non-cellular radios in handsets is T-Mobile USA in their Hotspot@Home with unlimited calling while at home connected over their WiFi access point connected back to the T-Mobile core network. In essence a “femtocell” without the pain of the frequency planning or spectrum management. But taking the same advantage of femtocells and using the customers Internet access link at home for “free” backhaul to the core network…FABULOUS model of eliminating a BIG CAPEX problem for themselves.

It just gets you thinking about what a femtocell really is, a tool for making mobile services work better and cost less.

A Home Zone is a Home Zone

This week ABI Research released the results of a survey conducted on behalf of Motorola. The article states that while “…the majority of consumers have never heard of femtocells…”, “…more than 40% of European mobile and internet users plan to purchase femtocells in the next 12 months.”

It’s easy to conclude then, that the questions focused not on the wireless technology to be used in the home (e.g. a ‘femtocell’), but on the benefits of having a “Home Zone” service, where the key factors were better in-home mobile coverage and lower costs.

Demand was highest in Poland, Spain and Italy, with moderate demand in France and the UK. Germany had the lowest demand of the six countries surveyed.

We at UMA Today thought this sounded a bit familiar. Through the magic of the web, we were able to recall a similar announcement from Motorola in August, 2005. Three years ago, Motorola announced the results of a survey of 1,000 consumers in six countries on the demand for a dual-mode handset service. This time the countries were France, Germany, Spain, Sweden, Italy and the UK.

And the results??? About the same.

Demand was highest in Sweden, Spain and Italy, moderate demand in France, lower demand in the UK and Germany.

I think there are some very interesting data-points from both surveys:

• Clearly there is continued demand for home zone services, regardless of the technology.
• I find it ironic that Italy continues to show strong demand, showing me that Telecom Italia Mobile’s Unica service was a victim of regulatory roadblocks rather than consumer interest.
• Orange’s plans for its Unik/Unique service are in UK, Spain, and Poland, three countries with strong demand for Home Zone services.

UMA Today continues to be a strong supporter of Home Zone services, and this is simply confirms that there is market demand from consumers for a thoughtful, value-oriented service offer.

Sorry Sprint

A very interesting opinion was posted to the GLG site the other day. Samual Greenholtz with Telecom Pragmatics opines that Sprint’s first choice for its home zone service was a dual-mode CDMA/Wi-Fi product. But lacking a DMH standard for CDMA networks, they were forced to settle for their second choice technology: femtocells.

With that, I say “Sorry Sprint”. It’s well known that there is no UMA/GAN for CDMA networks. With a 3GPP2 version of GAN, Sprint would have been free to choose dual-mode handsets, femtocells, terminal adaptors or even softmobile clients to run off their mobile network.

Is there an opportunity here?

"This is like deja vu all over again"

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.