Operators Eye WiMax Femtos

Femtocells could play a major role in ensuring mobile WiMax operators deliver on the promise of high-speed data services in densely populated urban areas, according to a new Unstrung Insider report. (See WiMax: What's Working Now and The WiMax State of Play in the USA.)

But while many service providers have WiMax home base stations on the drawing board, most vendors take a wait-and-see approach to the technology for now. (See Vodafone Dreams of Metro Femto.)

According to the new Unstrung Insider report -- "The Future of Mobile WiMax: Where, When & How Much?" -- one of the main reasons for WiMax operators to consider femtocells is the potential to reduce backhaul costs on the macro network.

The report notes that a three-sector, 5 MHz WiMax channel carrier would require about 90 Mbit/s of backhaul capacity. The small home base stations, by contrast, use the customers' broadband connections to backhaul traffic back to the core network.

U.S. cable operator Comcast Corp. (Nasdaq: CMCSA, CMCSK) has been the most forthright about its plans for WiMax femtocells. Comcast is one of the companies that is investing in the proposed Clearwire consortium that will merge Sprint Corp. (NYSE: S)'s XOHM operations with Clearwire LLC (Nasdaq: CLWR) to create a national mobile WiMax operator in the U.S. (See Comcast Goes for WiMax Femtocells, Sticking Those Fem-Toes in the Water, and Power of the Press.)

Comcast's senior VP for wireless and technology, Dave Williams, said in June that a key element of the new Clearwire deal is that 5 MHz of spectrum will be set aside just for WiMax femtocell deployments and be available for use by any of the consortium members, which include cable operators Comcast, Bright House Networks , and Time Warner Cable Inc. (NYSE: TWC), as well as Google (Nasdaq: GOOG) and Intel Corp. (Nasdaq: INTC). (See Cable Plays Clearwire Card and Clearwire: We're Still on Track.)

With a WiMax femtocell deployment, Comcast could sidestep the wholesale charges it would have to pay for capacity on the new Clearwire WiMax network. So, it clearly has a vested interest in femtos.

Comcast and the Clearwire consortium could be among the biggest drivers of the development of mobile WiMax femto equipment.

For now, though, big vendors like Nokia Networks have not yet committed to WiMax femtocells, according to the report, and are waiting for the right amount of demand to kick in. Another example is femtocell vendor RadioFrame Networks Inc. , whose CEO, Jeff Brown, recently told Unstrung that he had not committed to WiMax femtocells but that he probably will. (See Femto Vendor Lands $28M.)

Back in the macro…
While WiMax operators and vendors continue to evaluate the potential of femtocells, the price pressure and competition among WiMax macro base station equipment is fierce, finds the report.

"Vendors are willing to eat their margins to make a sale and reduce the price premium over cellular," writes report author Tim Kridel, noting that prices have fallen dramatically over the last several months.

In theory, WiMax base stations should cost 50 percent more than cellular 3G base stations because it is a newer technology and, with the use of multiple-input/multiple-output (MIMO) technology, WiMax base stations use more radios, power amplifiers, and antennas. But the report finds that this is not the case and that cellular 3G and WiMax base stations are actually comparable in price. That means vendors are likely struggling to make much of a profit on this equipment.

The report concludes: "Unless a killer application is found, mobile WiMax must be insanely great… So, to grab market shares from cellular, mobile WiMax must create the perception among consumers and enterprises that it is better [e.g., lower latency], faster, cheaper, or some combination of the three."

— Michelle Donegan, European Editor, Unstrung

paolo.franzoi 12/5/2012 | 3:32:54 PM
re: Operators Eye WiMax Femtos
Wimax Femto = WiFi hotspot?

joset01 12/5/2012 | 3:32:54 PM
re: Operators Eye WiMax Femtos That could work, in theory at least. But how many devices will initially support WiMax and WiFi?
paolo.franzoi 12/5/2012 | 3:32:53 PM
re: Operators Eye WiMax Femtos
ack first question should have read...why do I need WiMax?

paolo.franzoi 12/5/2012 | 3:32:53 PM
re: Operators Eye WiMax Femtos

I am asking the question the other way around. If I already have WiFi and I require these femtos to make WiMax work, why do I need WiFi?

If you say for Fixed NLos, then I buy it. That is a market today for thing like Wireless Backhaul. But the point of the message is that the current arrangement is truly insufficient for High Speed Data, then I am questioning why I need WiMax when I have boatloads of WiFi already available.

paolo.franzoi 12/5/2012 | 3:32:49 PM
re: Operators Eye WiMax Femtos
Sorry, my question was what is the User benefit not the carrier benefit.

El Rupester 12/5/2012 | 3:32:49 PM
re: Operators Eye WiMax Femtos I can see three reasons:

1) A carrier wants to offer consistent QoS. If you pay Sprint for theitr Xohm service and you get bad coverage, you know how to blame: Sprint. So they want to ensure that both coverage & QoS are both good and are under their control. If they hand off to an arbitrary WiFi service then how do they do that?

2) In-building coverage. Barry West has been clear that he sees femtocells are critical for indoor service - not just residential but for shopping malls, airports, etc. Maybe they are better described as picocells or access points, but using the femtocell technology of self-configure, easy install, low-cost, easy backhaul over broadband etc.

3) Billing & security. If your WiMAX is going to handover to WiFi, then how does billing and AAA work? Does the carrier negotiate roaming agreements with every WiFi operator? Do you have to enter your credit card before you can handover? Can your neighbour on Xohm use your WiFi router for free?

None of these are insurmountable, but WiMAX (and femtocells in general) are licensed spectrum technology used for paid-for service by carriers. WiFi is unlicensed used by individuals for free: there is less-and-less overlap.

COCOViper 12/5/2012 | 3:32:41 PM
re: Operators Eye WiMax Femtos Well the carrier benefits translate into a simpler, less expensive arrangement for the user.

If you just subscribe to Xohm for WiMax service and it is available indoors as well as outdoors- you don't have to worry about billing at WiFi hot spots, as well as handoffs between WiFi and WiMax (thus losing your signal and interrupting whatever you were doing).

On top of this WiMax is going to be more attractive because of set key performance metrics- WiFi is on unlicensed spectrum- thus if it breaks well you can blame it on the building or other noise but that is just how it goes. But given that WiMax is on licensed spectrum and carries with it specified performance requirements- users can EXPECT a certain level of performance. If any of you have ever traveled and used a Hotel's free wireless- you know why this is such a big deal. Because WiFi performance is up in the air- often Hotel WiFi performs at dialup speeds or slower. With WiMax this wouldn't happen.

Same thing in a crowded mall or nighttime hotspot- if there are a lot of users on the WiFi network- you are most likely out of luck on getting anything other than 10-30Kb/sec. But on WiMax there would be a guaranteed level of performance.
El Rupester 12/5/2012 | 3:32:39 PM
re: Operators Eye WiMax Femtos I think I would say that coverage, quality, convenience, security were all benefits for a user as well as for the carrier, no...?

It is true that if you have a 3G/WiFi dual-mode handset and if your carrier supports UMA then you could get pretty similar service.

Fair enough. The fact that there are two different ways to do things doesn't mean one of them is wrong: it just means they can compete (remember the sterile arguments if DSL or cable was "best" ?)

I do think it is notable how lacklustre the dual-mode story has been: T-Mobile in US is doing it, but not in Europe, very few others have adopted it, BT has dropped Fusion as a failure, etc... There are lots of reasons ("Every unhappy family is unique...") but it will be interesting to see if Femtocells do solve the problem any better - or if consumers do not actually see any problem that needs solving!
paolo.franzoi 12/5/2012 | 3:32:39 PM
re: Operators Eye WiMax Femtos
So, I have to now to have a rollout of a new network to make this happen which is my point. Today I could buy a 3G mobile card and have WiFi. That is my point of comparison, and I would say that coverage is pretty good at the moment. Not great, but pretty good.

So, I understand your argument - it just seems that the requirement for Femto type arrangements just put the availability off for many, many years. At that point, it is not very useful to me anytime soon.

Before you get all up in arms remember I run a UMA phone today and am quite happy with the service. So, all that handoff stuff sounds like FUD not reality. I have seen Cellular to WiFi (and the reverse) handoffs many times.

paolo.franzoi 12/5/2012 | 3:32:38 PM
re: Operators Eye WiMax Femtos
Coverage of WiMax is not there yet.

Quality can be a concern.

No idea if convenience...yet.

Security...if I depended on the network for security.....

What my point is, and there are parallels in wireline, people are off building networks to compete with a nice cheap commodity service. Really good idea or no? I get the point of WiMax in India or Pakistan. Just not so sure in countries with lots of 3G and WiFi.

Wimax price settings better not be higher than things like WiFi, Data Cards, UMA phones (where I can make WiFi calls for free on an unlimited basis). Investing a boatload of money to do so, seems like a big deal. This gets to be especially true since now a company has to convince every building owner to put in a Femto or his service goes away (which is what this article says - I make no claim to the veracity of the article). Especially since these buildings already have WiFi, it seems rather problematic.

So, now hotels will have to all have WiMAX femtos on top of WiFi? Really think that is happening anytime soon?

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