RFID antennas

	The IP-Cell from South Korea's Contela is a 4-channel femtocell that supports HSDPA with up to 7.21Mbps data rate.

Femtocell technology promises lower cost and better voice quality, but can it surmount rollout challenges and deliver?

The hype around femtocells centers on its promise of a seamless, affordable solution that can compete with fixed mobile convergence (FMC) technologies by allowing users to leverage existing broadband and even IP technologies to deliver low-cost, but high voice quality mobile services using a single handset. Estimates from ABI Research place the number of femtocells in use by end-2008 at a conservative 100,000 units, but growing interest in the technology, service providers’ deployments and the release of commercial products by equipment suppliers will likely push the figure up substantially beginning 2009. By 2010, ABI Research predicts that femtocell unit price will go down to $100 each, and that by 2012, 36 million femtocells will be in use by 152 million users around the world.

Members of the Femtocell Forum are blazing the trail for femtocell adoption. These include NXP Semiconductors, Nortel Networks, Cisco Systems Inc., China Telecom, Netgear, NEC Corp., Ericsson, Alcatel-Lucent, AT&T, Huawei Technologies Co. Ltd, Nokia Siemens Networks, Samsung, Thomson, O2, Vodafone and ZTE Corp. Currently available femtocells—or products under development—fall into four main subcategories based on the mobile network and frequency supported: GSM, CDMA, W-CDMA and WiMAX/mobile WiMAX/WiBro. The initial markets targeted are North America, Western Europe, Japan and South Korea.

As with many new technologies, however, femtocell’s promise has yet to be tested and proven, with the technology yet to hurdle the challenges that block product adoption, equipment development and service deployment. One of the major concerns is the lack of an industry-wide standard. Multiple architectures have been proposed, but the Forum has yet to develop a single architecture that can serve as the industry standard that can be used as guide for equipment development and deployment.

Product developers have a number of technical issues to resolve as well. Nevertheless, a growing number of industry watchers and equipment manufacturers are seeing the technology’s potential, and this could speed up supplier adoption. Already, several suppliers in Greater China and South Korea are expressing interest in pursuing femtocell technology, with some companies releasing their first generation of products.

Femtocell’s promise of cost savings and better call quality for both mobile operators and subscribers is the technology’s biggest selling point. Through small home base stations, femtocell will allow users to use their home broadband access to place voice or video calls using the same mobile phones that they use outside, without having to manually shift their mobile phones’ mode when they enter or leave the home premise. Because the femtocell unit routes the wireless voice traffic through pre-existing broadband connections, the call cost is much lower.

As soon as the mobile phone comes within range of the femtocell at home, it will automatically detect and use it instead of outdoor cell sites. Users need not change how they place and receive calls, and all call services, such as call divert and text messaging are accessible.

Femtocells operate at low radio power levels, which increases battery life.

Unlike Wi-Fi, femtocell does not need an extra dual-mode handset to support Wi-Fi and gain broadband access. Another benefit of femtocell is that subscribers can use the low-cost advantage of VoIP to use their mobile phones. The femtocell base station can also be integrated into the current DSL, cable modem or router via plug-and-play technology, to be able to enter the wireless communication core network.

For mobile operators, the technology’s benefits lie mostly in increased network capacity. Because deployment does not require any new machine installation, capex expenditure is reduced in the long run, as is maintenance cost. Tellingly, some operators such as Vodafone have started trials of femtocell. Sprint Nextel launched Samsung’s Airave femtocells in August.

Further, the femtocell setup can work to the advantage of mobile service providers: By offering a femtocell-based home subscription, the mobile service provider can convert household members who used to subscribe independently to different mobile service providers. This provides an opportunity to increase the subscriber base, reduce churn and increase average revenue per user (ARPU).

Outside of the growing hype, femtocell’s takeoff is hampered by obstacles in the technical, financial and legislative aspects. The absence of a unique spectrum for femtocell renders it weak against interference and risks undermining the performance of the wider network. Mobile operators need to carefully plan frequency usage to ensure that scenarios where more femtocells are deployed in, say multidwelling or high-rise buildings, will not result in femtocell units interfering with each other.

Scalability is another area for improvement. A femtocell base station can support only four users simultaneously, which is less than the number of users that Wi-Fi can support.

High product prices will also limit the technology’s adoption. For operators, initial technology deployment will still entail some investment. An average femtocell unit sells at about $200 at present, as opposed to less than $50 for a Wi-Fi access point. This large price gap can make purchasing UMA handsets, which connect to Wi-Fi access points, seem like a more cost-effective alternative. This cost advantage is, however, expected to be temporary as femtocell unit prices are forecast to go down to about $100 each by 2010, according to ABI Research.

Legislative issues regarding femtocell applications arise in regions that restrict voice service delivery over the Internet. Such is the case in South Korea, where service providers are faced with the task of innovating new business models for femtocell applications that can work with or around government policy. Meanwhile, a similar regulation in Japan has been lifted, thereby allowing the country’s leading communication providers, SoftBank Mobile Corp., NTT DoCoMo Inc. and KDDI Corp., to aggressively push FMC services via femtocells.

In Taiwan, although femtocell technology is available and chipset prices are relatively lower, makers face the challenge of stimulating demand in a nascent market. Makers are closely monitoring market developments to be able to time volume production commencement.

Femtocells are slowly entering Asia’s telecom manufacturing industry. Several manufacturers in South Korea and mainland China have ventured into the production and export of femtocells. There are also a few Taiwan makers with femtocells scheduled for launch in the coming months, although many of the island’s suppliers are taking a wait-and-see attitude toward this line.

In South Korea, femtocells are winning the support of WiBro equipment makers. About nine companies from the sector are engaged in femtocell development, including Dongwon Systems Co. Ltd, Youngwoo Telecom Co. Ltd, Kisan Telecom Co. Ltd and Ivy Network Co. Ltd. Meanwhile, W-CDMA femtocells are available from three South Korea companies: Contela Inc., Ivy Network and Axess Systems Co. Ltd. On the outset, femtocells were intended simply for expanding coverage, but South Korea’s major service providers such as SK Telecom, KTF and KT have recently been considering W-CDMA femtocells to be the core equipment or base stations for FMC services.

In mainland China, the first movers in the femtocell category are market leaders ZTE and Huawei.

Early supporters of femtocell technology in Taiwan are from the WiMAX market, specifically suppliers of WiMAX base stations. Industry observers in Taiwan predict that by the end of 2008 or early 2009, Taiwan suppliers could start applying picocell and femtocell technologies to improve WiMAX signals in dead spots.

Among the companies with femtocells in their pipelines are Tecom Co. Ltd, Alpha Networks Inc., Zyxel Communications Corp. and Gemtek Technology Co. Ltd. While there is currently a dearth in actual femtocell supply in Taiwan, some WiMAX device makers note similarities in the specifications and functions of femtocells and picocell or microcell base stations, and that femtocells, when available, can be priced lower than picocells and microcells.

Femtocell supply growth will also be stimulated by the rising availability of femtocell chipsets. Among the chipset suppliers that offer femtocell ICs are Freescale Semiconductor and Qualcomm Inc. Runcom Ltd and Fujitsu Ltd are scheduled to release femtocell chipsets in H2 2008, with Fujitsu also to adopt IEEE 802.16j technology.

Suppliers in mainland China and South Korea focus on W-CDMA femtocells. W-CDMA femtocell supply in South Korea yields mostly collapsed-type femtocells, but makers said their goal is to move to IMS-type products in the near future to leverage an IP-based architecture.

The development focus of South Korea W-CDMA femtocell makers is on supporting HSUPA, increasing HSDPA data rate and improving handover performance. They also place emphasis on security function. Makers ensure compliance with UL and CE.

Ivy Network, along with SK Telecom and Electronics and Telecommunications Research Institute (ETRI), will be supplying femtocell equipment for the trial services scheduled to start within this year in South Korea. Ivy Network will also undertake a field test with Hutchison Telecommunications of Australia. Ivy Network’s core R&D activity is centered on supporting HSUPA. Its new product with HSUPA support is set to be introduced in mid-2009.

Contela is working on raising the HSDPA data rate to 7.21Mbps in its upcoming IP-Cell femtocell base station. Other than HSDPA, the model is going to support HSUPA as well, with a data rate of up to 1.46Mbps.

In terms of voice QoS, Contela’s other R&D priority is to improve the handover performance to avoid interference between the existing macrocells and its new femtocell. Contela recently finished developing security features using IP security technology and call signal encoding. The company plans to use the technologies in its upcoming models.

Contela will be working with Japan’s KDDI, providing complete equipment for the latter’s femtocell systems, with Hitachi in the consortium.

In mainland China, ZTE and Huawei are developing W-CDMA femtocell base stations. ZTE has released its first W-CDMA femtocell home access solution, the ZXWR H8901. This W-CDMA home access base station can provide services for individual home or SOHO clients.

Huawei exhibited a W-CDMA home base station trial product in Wireless Japan 2007. This product supports HSDPA and HSUPA.

Communication and network service providers in South Korea see femtocells as gaining the support of WiBro service providers for use as the core equipment in their network. In the mobile WiMAX and WiBro market, handover performance is the core development priority. To provide smoother performance, femtocell makers are studying profile B and profile C. A femtocell that supports profile B integrates an access control router (ACR) function, thus, allowing it to operate independently without the need for any extra ACRs. On the other hand, a profile C femtocell requires a separate ACR when it makes handovers to other femtocell zones.

Dongwon Systems has developed the DWS-SAP WiBro femtocell to support profile C. According to Sunshin Kwag, general manager of the optic technology research center of Dongwon Systems, profile C femtocells can guarantee better handover performance than profile B types. Kwag added that profile C also offers lower maintenance and repair costs. In the meantime, Dongwon Systems plans to commercialize profile B-type femtocells beginning 2009.

Ivy Network supplies both W-CDMA and mobile WiMAX femtocells. The company focuses on mobile WiMAX profile B femtocells for overseas markets rather than WiBro.

For some makers, the convergence of femtocell equipment with other communication and Internet technologies is a key target.

With most Taiwan WiMAX base station suppliers still emphasizing macrocell, microcell and picocell base stations, femtocells might have to wait a little more time before they can start dominating makers’ drawing boards. Among companies with femtocells in the pipeline, only one has a sample femtocell base station, Zyxel. A few Taiwan WiMAX suppliers focus on CPE products, such as Accton Wireless Broadband Corp. Accton has no plans to develop or produce femtocell base stations or access points.

Zyxel’s femtocell base station, the Max-1200, is part of a series of WiMAX base stations in different scales. It includes the Max-2021, a microcell base station, and the Max-3200, a picocell base station.

Tecom projects it will launch its femtocell access points or base stations in H1 2009. Gemtek gives an H2 2009 release date for its femtocell access points. At present, Gemtek is focusing on picocell base stations.

Alpha currently concentrates on microcell base stations and expects its roadmap for femtocell access points and base stations to be more clear after Q3 2008.