Operators Reveal Femto Realities

Mobile operators share the good, the bad and the ugly about femtocell services

Michelle Donegan, Contributing Editor, Light Reading

June 28, 2011

4 Min Read
Operators Reveal Femto Realities

Operators shared their practical experiences with femtocell trials and commercial services from the technology to the business case at the Femtocell World Summit in London last week.

The result is a collection of knowledge about what works, and what doesn't yet, in these still early days for the femtocell market.

Here are the highlights:

  • Vodafone Group plc (NYSE: VOD) offers femtocell services in nine markets -- Australia, Greece, Hungary, Ireland, Italy, New Zealand, Qatar, Spain and the U.K. Based on that market experience, Thilo Kirchinger, Vodafone's principal connected home manager, said that the need for indoor voice coverage is the trigger for most customers to buy a femtocell and that data offload is not a proposition that can be sold to customers. (See Femto Watch: Vodafone Expands Footprint and Vodafone's Femto Empire.)

    Kirchinger also urged equipment suppliers to support femto standardization fully, engage better with the connected home industry and lower the cost of femto access points.

  • Telecom Italia (TIM) is about to start offering Alcatel-Lucent (NYSE: ALU) femtos to business customers in Rome, Turin, Milan and Bologna, but the operator did not reveal its service price plans. The operator will not support open access in the access points because it wants to understand better how the indoor access points could affect users' services on the macro network, according to Ferruccio Antonelli, wireless devices director at Telecom Italia. He also noted that the "point of failure" for femtos is backhaul technology. Telecom Italia, whose femto users will mainly use ADSL links, recommends a broadband connection of at least 1 Mbit/s to backhaul the femtos. (See AlcaLu, Telecom Italia Rev Femto Apps.)

  • Vodafone Greece 's new products, innovation and wholesale group product manager, Polychronis Tzerefos, said that femtocells are a customer-retention tool, not an acquisition tool, and that operators should expect to subsidize them heavily. Most customers of the femto service in Greece are in small office/home office (SOHO) or SMEs. Tzerefos said there are early indications that there's a significant increase in data revenue after a femto is installed, but he added, "We need to double-check the figures because the numbers come back very high."

    Among the technical challenges the operator encountered, Tzerefos said there is lot of integration to be done with existing business systems, customer relationship management, business intelligence and customer self-care portals. And as for marketing the femto service, Tzerefos shared that there was much internal debate about, "How do you sell the customer coverage when you're supposed to have the best coverage in Greece? How do we explain they need a solution?"

  • Malaysia's fourth mobile operator, UMobile, is running a femtocell pilot with Alcatel-Lucent. Chief Planning and Strategy Officer Bill Chang said that it's a "no-brainer" to give femtos away for free and to bundle them with other services in a loyalty program. But current regulation in Malaysia hinders the femto business case. Every time a mobile operator installs and turns up a base station in the country, it has to pay a license fee to the regulator. Chang did not specify how much the fee is, but noted that if the same charge applies to femtocells, then "that would drive the femto cost-effectiveness to a negligible level." Chang said the rules needed to be changed before UMobile could proceed with its femto plans.

  • MegaFon , Russia's second-largest mobile operator with 55.6 million subscribers at the end of 2010, also encountered a hitch in regulation when it started its femto pilot. Russian law requires that a network gateway be located in the same federal district as the access points that it serves. Since MegaFon has offered residential and enterprise femtos from AlcaLu, Huawei Technologies Co. Ltd. and NEC Corp. (Tokyo: 6701) across eight federal districts, that means it had to deploy no less than eight femto gateways. "If femto gateway is to be set in every Russian federal district ... big capex is required," said Pavel Skorodumov, senior engineer at MegaFon.

  • NTT DoCoMo Inc. (NYSE: DCM) wants to introduce LTE femtocells as soon as possible. According to Hiroyuki Hosono in the operator's radio network equipment group, the purpose of an LTE femto can be to accelerate the customer migration from 3G services to LTE services. The operator is now toying with whether to offer a single-mode LTE or dual-mode 3G/LTE femto.

  • Vodafone's new technologies manager, Alan Law, said that the role of femtocells in Vodafone's networks continues to evolve. "Femtocells will have a significant and important role in our networks in the future," he said. The operator is already taking femtocells out of the home to provide targeted coverage in rural areas. Law said that the challenges Vodafone found in rural deployments are access to power, IP transport for backhaul and flexible locations.

    — Michelle Donegan, European Editor, Light Reading Mobile

About the Author(s)

Michelle Donegan

Contributing Editor, Light Reading

Michelle Donegan is an independent technology writer who has covered the communications industry on both sides of the Pond for the past twenty years.

Her career began in Chicago in 1993 when Telephony magazine launched an international title, aptly named Global Telephony. Since then, she has upped sticks (as they say) to the UK and has written for various publications, including Communications Week International, Total Telecom, Light Reading, Telecom Titans and more.

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like