A femto cell is currently the smallest implementation of a cellular network.

It is designed to be placed
in each home and enable ordinary mobile handsets to communicate with the mobile network through
broadband connections, including cable or xDSL. Femto cells operate on the same licensed
spectrum that is used in macro and micro cells but only have a range of tens of meters, to cover the
area within the home. They bring a whole new value proposition to mobile operators and enable
them to enter a previously unreachable market: the home environment.

But do we really need femto cells ?

The Femto Forum has been formed by seven early femto cell innovators mostly in the UK
(including IPAccess and Ubiquisys) during July 2007 andattracted several heavyweights during the
summer of 2007, including ZTE, NEC, Alcatel-Lucent, Nokia Siemens Networks, Motorola and ZTE.
The forum currently consists of 50 members that are distributed across the mobile value chain. The
forum has created four working groups tackling technical, business and marketing issues and aims
to minimize fragmentation in this new market.

Why is there a need for such small cells?

The most efficient way to increase network capacity in a cellular network is toshrink the cell size –
ok, there are other ways, including getting new spectrum, sectorization, adaptive algorithms for
scheduling but all are semi-disruptive and cannot compete with a smaller cell size. However, in an
archetypal mobile network, the cost to deploy a network with many small cells in data hungry areas
is prohibitive. Femto cells piggyback on broadband connections and are relatively inexpensive and
can effectively form a distributed high capacity network. On a much simpler usage case, femto cells
can provide coverage where ordinary cells cannot, in highly populated areas where propagation
issues are a concern.

(Although pico and femto cells may appear similar, a pico cell connects to a base station controller to
extend coverage in areas without, e.g. enterprise locations. Femto cells may include some form of a
base station controller and are more intelligent).

What femto cells really propose is revolutionary for mobile and fixed operators, assuming that they
aim to provide more than just coverage in the home. Saying that, femto cell application is most likely
to depend on the region it is being deployed in: Western Europe is most likely to use femto cells for
advanced data services, while North America is more likely to see femto cells for coverage in remote
areas where low traffic does not justify a typical base station.

Are femto cells valuable as marketed currently?

First of all, I am not convinced that fixed operators will be happy to see mobile operators
piggybacking their broadband connections and generating revenue through them, cannibalizing
bandwidth that could otherwise be used for fixed services. Although it is likely that some form of
agreement will take place between the mobile and fixed operators, it is still early to discuss about
this when there could be serious technical difficulties facing femto cells.
 A serious technical issue is interference, with femto cells interfering with each other and the
macro/micro cells in the main mobile network. Simon Saunders, chairman of the Femto Forum,
affirms that major femto cell developers have made their products aware of their environment and
intelligent so that they do not interfere. This may be the case, but I would like to see how femto cells
will interact when there are tens in the vicinity, all trying to work in the same spectrum. Another issue
is whether the mobile network will be able to cope with so many distributed base stations accessing
the core elements of the mobile network, including the central switches, location registers,
softswitches, media gateways etc. These may have been designed to cope with hundreds of base
stations in dense urban areas, but the number for base stations may escalate to several
thousands if the mobile operator considers femto cells.

As far as usage is concerned, I can t see a solid scenario for femto cells. They can bring mobile
wireless data to the home with the added benefit that users can access the new application with a
device they are already familiar with. However, I don t see how a mobile device can compete with a
PC or a notebook computer for data services most commonly accessed at home: Web, email, social
networking and multimedia. Especially if mobile operators build WiFi in a femto cell box to enable
computer networking, I think thatfixed operators will get quite alarmed.

I can see three ways for mobile operators to bring something of interest to end users with femto
cells:

 New services: Mobile operators can release new services that can target mobile devices with very
high speed connections. Intelligent architectures that distribute intelligence to the edge of the
network (including IMS) are ideal for this setting but then again, user behavior is nearly impossible to
predict, and deploying this kind of services would require heavy capital expenditure on behalf of the
mobile operator.
 New terminals: This is a far more radical approach. Mobile operators can promote devices with
increased display and input capabilities to be used in femto cells and outdoors. This would be
possible only when proof of concept has been achieved and economies of scale are in place to
justify for the need to change handsets (or get an additional one).

Or they could simply add coverage where there isn t to start with and build a stable of applications
after end users are familiar with cell at home solutions.

Do we really need femto cells ?

Femto cells may be a good thing. After all, distributed is the way to go forward: FON and Meraki
enjoy success with little overhead costs compared to traditional network providers by giving more
power to the end user. I am not saying that the mobile operator will give more power to the end user,
but will enable more advanced applications and perhaps cheaper mobile basic services including
voice and SMS at home. There is a lot of work to be done to make sure that:

 Fragmentation is managed and technical issues are resolved (e.g. Nokia Siemens has released a
femto gateway that speaks to other vendor femto cells via a proprietary interface).
 Operators market (and subsidize) the devices very carefully
 Mobile operators should work with fixed operators to setup some form of cooperation to enable
femto cells, or assess whether they should offer fixed services themselves.
 Educate end users that health risks are minimal (as with guideline compliant macro/micro cells)

However, as it stands (and in the short term future) I wouldn t pay anything to have a femto cell at
home, when I can enjoy voice calls through circuit-switched (or VoIP) practically free and have a
very fast broadband connection with WiFi.
Would you?