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TeliaSonera Tackles Indoor Coverage

Michelle Donegan
GSMA News Analysis
Michelle Donegan
1/30/2008
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Telia Company launched today a GSM picocell indoor coverage service for business users in Denmark. (See TeliaSonera Picks ip.access.)

The operator is deploying the big brother of the much-hyped femtocells to fill GSM coverage gaps in buildings and to relieve capacity constraints for enterprise customers in the country.

While picocells have been around for some time, TeliaSonera says it can now make a business case for this indoor coverage solution because of the ability to use IP backhaul, which is less expensive than E-1 leased lines or other traditional backhaul transport methods.

Paul-Flemming Hermann, in-building and special solution expert at TeliaSonera in Denmark, describes IP backhaul as a "revolution." (See Of Backhaul & Bean Counters and Insider: The Backhaul Question.)

"In some cases, we couldn't help customers because the revenue they provided us wouldn't pay for the [in-building] solution," says Hermann. "Now, we can do the most fantastic solution at the customer premises. That's the goose-bump effect."

With high backhaul costs, picocells could be a costly indoor coverage solution for operators.

"Ten years ago, picocells were present, but you needed the leased lines, and that did not make a business case," says Hermann. "IP is the key to making the picocell case work."

TeliaSonera is deploying the nanoGSM picocell system from ip.access Ltd. Hermann says the operator can use the customer's DSL connection for backhaul but prefers to install its own DSL line so that it is "in control from A to B."

TeliaSonera does not charge businesses for use of the picocell. The model is to improve customer satisfaction and reduce churn by filling customers' coverage gaps.

This is in contrast to Orange UK 's strategy for its recently announced OnSite Coverage picocell service. Orange will charge a monthly rental fee as well as offer bundled service packages, including handsets, to businesses with its in-building coverage service. (See Orange Expands Indoor Coverage and Orange Deploys Picocell.)

"If you want to use mobile as a business tool, coverage needs to be good inside the office," says Emma de Heveningham, product manager for voice marketing at Orange. "Customers are asking us to deliver extra capabilities and services."

Orange says it has customers using the OnSite service in Switzerland and the U.K., and the service will also be rolled out in France, Spain, and Poland. Nokia Networks supplies the picocell solution to Orange, which includes the S-series picocell system from RadioFrame Networks Inc. (See NSN, RadioFrame Team.)

While there are a lot of differences between picocells and femtocells, some argue that operators can gain operational experience from these early 2G picocell deployments for business customers, which will help them to provision femtocells for consumers.

"Operators can learn a lot about how to do [provisioning] efficiently and accurately with 2G," says Mark Keenan, general manager for Europe, Middle East, and Africa at RadioFrame. "I think they'll pick up a lot of knowledge from pico deployments."

Not everyone agrees on the extent to which experience with deploying picocells will help with femtocells. But the most important common denominator between the two kinds of small base stations seems to be the IP transmission for backhaul.

TeliaSonera's Hermann says picocells and femtocells are fundamentally different in many ways. Picocells are installed by operators and aimed at the enterprise. Femtocells, on the other hand, will be installed by consumers like a WiFi access point, targeted at consumers, and will be deployed on a much larger scale than picocells. The business cases for each can also vary dramatically.

However, Hermann believes the experience with IP backhaul through its picocell service will help the operator when it comes to deploying femtocells, as both small base stations will use broadband connections for backhaul. (See TeliaSonera Preps Femto Trial.)

"We can learn similarities through IP transmission," says Hermann. "IP backhaul -- that has been a lesson."

Andy Tiller, vice president of marketing at ip.access, agrees. "IP backhaul is a key thing operators have worried about," he says. "The partitioning of the functionality between the two ends so that it works well over the broadband IP network has been informed from what we've learned in 2G."

— Michelle Donegan, European Editor, Unstrung

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