HomeNewsNew report says femtocells improve LTE/WiMAX business

    New report says femtocells improve LTE/WiMAX business


    The Femto Forum, the independent industry and operator association that supports femtocell deployment worldwide, has announced the results of research into the femtocell business case for 3G, WiMAX and LTE operators trying to manage the surge in data usage from smartphones, dongles and iPad like internet access devices. The research is said to have found that operators can use femtocells to efficiently manage rapidly growing mobile broadband usage while also making a healthy return on their investment – in typical cases by more than ten times. The study was carried out by Signals Research Group (SRG), a US-based wireless telecommunications consultancy, and the full results will be presented in a dedicated daily session at Mobile World Congress (MWC) in the femtozone.

    This 2010 report is a natural follow-on to the 2009 report published at MWC last year. The earlier report – which considered assumptions based on consumer behavior in 2009 – found that average household lifetime value increased by more than a factor of 2 across a range of scenarios and that macro-cell offload was a significant factor in the case of USB dongle users.
    The new report examines the near future when mobile broadband services are truly mass market across the world and customers have solid 3G and some next generation mobile broadband service choices.

    The research looked at the impact of femtocells on a variety of operator scenarios both large and small, both incumbent and new entrant. Specifically, these studies included a 3G operator looking to improve the mobile broadband business case using femtocells across four different consumer and enterprise market segments, a European 3G femtocell operator upgrading to LTE and a greenfield operator deploying either LTE or WiMAX in Asia.

    The research reached the following conclusions:

    . The business case, while compelling in 2009, improves further as
    data use continues to increase and as operators move from purely coverage-driven femtocell deployments to ones based on macrocell-offload, performance enhancement, and personalized home-zone and office-zone services

    . In all of the 3G and next generation cases studied using a customer
    lifetime perspective, the macrocell-offload network savings exceed the cost of the femtocell. This suggests that the risk an operator takes in supplying the market with femtocells is lower than some believed

    . A operator offering either 3G or dual-mode LTE/HSPA femtocells is
    able to realize a return of 10 times on their LTE/HSPA femtocell service investment across a wide range of mobile broadband customers

    . A operator offering 3G femtocells is able to double the customer
    lifetime value of carefully targeted mobile broadband households

    . A sample European operator with 10 million subscribers deploying
    femtocells to 10% of their customer base is able to realize a return on their incremental femtocell investments of more than 10 times

    . A business case exists even for a regional operator deploying only a
    few thousand femtocells

    . A new entrant deploying LTE or WiMAX can dramatically improve
    customer experience by providing each new subscriber with a femtocell.  A study in a major Asian market indicates that an operator could fund such a mass deployment of femtocells by deferring macro cellular rollouts for 36 months in as little as 7.5% of the planned coverage area

    "Wireless data has reached a tipping point.  As the mass market embraces mobile data, and as rich media reaches the device-top, operators are confronted with an exponentially increasing demand for traffic.  Femtocells – strategically placed – offer the operator a powerful tool to contain escalating network costs and to significantly enhance the end user experience," said J. Randolph Luening, VP Wireless Economics, Signals Research Group, LLC.

    "Over the past 12 months there has been an explosion in data usage due to dongles, netbooks and touchscreen smartphones. Now that tablets like the iPad promise to further add to the network load, operators are looking at new and innovative ways to leverage this growth and turn it into an opportunity," said Simon Saunders, The Femto Forum's Chairman. "This report provides a detailed insight into the operator business case for employing femtocells in existing or new networks. It is now clear that femtocells properly targeted to complement and enhance macrocell deployments represent the most economical means for operators to deliver a managed mobile broadband service that meets subscriber capacity and service quality demands."