MOBILE EUROPE:
Could you first explain a little about Spb, what it is you do and your role in the market currently?

Sebastian-Justus Schmidt:
Spb Software was established in 1999, and since 2001 we have been focused solely on the field of mobile software. Mainly specialising in Windows Mobile, we have gained a huge market share and without doubt are the biggest company that does software for Windows Mobile. As much as 15% of worldwide market share is attributed to Spb Software. Our software titles are translated into more than 20 languages and are worldwide bestsellers in different fields like User Interfaces (Spb Mobile Shell), Feature Enhancements (Spb Pocket Plus) and many more areas – including business-user oriented bestsellers, such as Spb Traveler and Spb Wallet.
We’re expanding rapidly too. Currently we are 72 employees and by the end of 2008, plan to be 100. This growth is achieved without any outside investment. Our flagship usability product – Spb Mobile Shell – has had superb success with operators and handset vendors. Ten OEM and mobile operators ship their devices with our entire usability platform on-board.

ME:
At the ITU Asia congress, I hear Spb is taking things further with the launch of Spb Online.

S-JS:
Correct. Now we have delivered on usability in products, and the next step for us is to address the services segment. The devices are superb, bandwidths are getting luxurious, special mobile services are out there, and honestly, we have been thinking about how we can help increase ARPUs and stimulate service usage – and that’s where Spb Online fits in.
Spb Online is different. It is not a single application like all our other products. Instead, Spb Online is a single entry point for online services from mobiles. It provides users with easy-to-use access to news, programs, games, ringtones, themes and other content like weather information. Last but not least, it includes stunning features such as online games, where subscribers can play against each other in an operator’s network; a superb TV solution and a smoothly integrated radio solution are also a part of the product. We think that Spb Online will increase service awareness and streamline content purchasing of all kinds.

ME:
In some ways, it sounds like an On-Device-Portal.

S-JS:
We are trying to avoid that connotation, because Spb Online is in a class of its own, and is different from what has been called ODPs up until now. The reason is clear: we have put all our experience from thousands of conversations with more than a million users, worldwide – over the last six years – into this new product. We have seen users’ ideas shifting and we have seen new opportunities in cooperation with many mobile operators. We have seen that our core experience, which comes from feature-rich devices – is a big success factor. The more advanced a device is – the more advanced is the user. And the ‘more advanced users’ are looking to claim more benefits from services offered by mobile operators.

ME:
What is the most interesting feature offered with Spb Online?

S-JS:
That will depend on the preferences of an individual user. Some will like the newsreader with great pictures in it, some will use the weather info or other services like online radio and games, ringtones etc. – but we think that the most colourful, thrilling and captivating feature is the streaming TV solution.

ME:
A streaming TV solution? What is new about Spb’s streaming TV?

S-JS:
The way we do it. I never liked a streaming TV solution for mobile devices before. No-one has really been satisfied, and many streaming clients have been so awful we wondered how their makers made money! So, two years ago we started working on a player that would clearly change the viewing experience on mobile devices for the better.
The resulting player is very smooth, bright, and with great audio quality. Users can navigate by touching the screen, and without having to change back to portrait mode. It is possible to change the settings in-video, switch channels, and do all the things that people do with their home TVs.
So we have created a solution with a completely different approach. We have real-time thumbnails of running programs and users can zap around just like at. It is an amazing piece of software and architecture, and in my opinion – the first real TV streaming solution that is fun and easy to use – as a TV service should be.  Moreover, our streaming TV solution is highly optimised for a wide range of mobile devices.

ME:
As you are clearly targeting mobile TV, let’s talk about some of the drivers in that market at the moment. Take a business user –  does mobile TV offer enough advantages over the pleasure of watching TV on a big screen?

S-JS:
Sure, users will watch the big screen if available – and in hotel rooms this will be the case. However, today’s life is all about mobility. Mobility enables us to continue what we normally do at our desktops, (now, even watching TV) – on the go. You will be able to watch TV in a taxi, while waiting in the lobby, or even when camping and outdoors.  There are plenty of this kind of short breaks in the course of a day, when you will gladly use your mobile as a TV player.

ME:
And where do you think usage is heading? What sort of services will dominate? For instance, what would you make of offering YouTube, Video Recorder, or services like a “selection of the best goals from yesterday”?

S-JS:
All these services would make perfect sense. If you want to address the big mass market you might have to add such services some day. However, I have learned from top managers that they see TV as a chance to browse through channels to get a picture of what happens in the world. Will they really stay with one special programme? Yes, some will. But the basics of TV are the channel browsing possibilities. Channel hopping is random and if one gets caught up in an interesting report or TV show offered at one particular channel – then this usually happens by accident and is a matter of choice. By the way, it’s the same with how many people read the newspapers. So this is what Spb TV offers first: answers to basic needs.

ME:
And will other things come later? Will your solutions always be targeted at Windows Mobile devices?

S-JS:
Well, I don’t like to speak too much about our plans for the future, but speaking for Spb Software I can say that interactivity will be a big thing in the future. Our player is not only a superb product – it is designed and ready for full interactivity. I am sure you will see a lot of great innovative features in our TV solution in near future. As for other OS? We have had great success with Windows Mobile, but I think in time, of course, we will look to broaden our support for other open OS.

ME:
So far much of what we have talked about has been streaming video. But look at the focus now on DVB-T, DVB-H or DMB – when people speak about TV on mobile phones most of them don’t speak about just streaming any more.

S-JS:
Good point. With the exception of national sports events I wouldn’t speak of such mass demand for streaming TV, yet. Right now we are in the hybrid technology phase and the outcome is clear – it is only a question of time until the break-even for IP technology is reached. Our research has encouraged us to invest in this future – there are so many additional benefits to streaming TV.

ME:
But are you aware of the initiatives concerning DVB-H in Europe – and are positioned to meet operator and manufacturer demands around those?

S-JS:
Yes, of course. People who have massively invested in this technology need to get their money back. Sticking to old technology isn’t the path of the future. Check the roadmaps of planned and partly-started investments in the backbone technology and you will see – we will have dramatic changes here and closing our eyes to that fact will not help: old technologies will not survive in a fast and modern world. Anyway – our player will work for DVB-H as well, with small modifications.

ME:
Where do you see the first break-through for your company?

S-JS:
I think we’ll see the first networks running WiMax start within the next month – and several others will follow. There is already communication with 3G suppliers as well. There’s no doubt that 3G, WiMax and especially the successor technology LTE are perfect platforms to carry streaming TV.

ME:
What kind of business model is driving the entire Spb Online architecture, including the streaming TV service?

S-JS:
When we first came up with this idea – no one was willing to spend a penny on it. That situation has changed drastically over the last 12 month and will undergo permanent change over the next months as well. We will benefit from the dramatic changes in costs in the nearest future, and also in the liberalisation of IP services on some markets. Reduced bandwidth costs, new generation of devices, and the acceptance of their common use in numerous everyday situations – all these factors will have positive effects.

Most importantly, Spb Online is well placed to help our partners and customers exploit these factors. We are a proven partner of operators through our customisation and usability products, and we now see a great future for Spb Online, which is set to be a strategically important product for the industry.

With DVB H being acknowledged as the official standard for Mobile TV in Europe, the OMA BCast Smart Card Profile standard is the latest application framework to be released and promises a great number of advantages

After satellite, IPTV, TV over the internet, Channel editors have yet found another promising distribution channel with mobile broadcast TV. This new medium will not act  as a substitution product but as a complementary solution to access your favourite channels on the go. Where the promise is simple and appealing, the setting up of the value chain is not that simple. A glimpse at the variety of stakeholders involved in finding a satisfactory business model gives an idea of the inevitable headaches to be encountered before market launch.

Among them, you'll find channel editors, regulators, broadcast and mobile operators, usually third party network operators, handset providers, regardless of issues about connected devices versus non connected (without GSM capacity) devices such as PMPs. And this is only at business level. Transpose this to technical level and you add some more complexity, with key issues such as responsibility over customer management, equipment, software integration. In order to make mobile broadcast TV a success, standardisation is key.

Regarding the broadcasting technology, the European union is pushing strongly for the adoption of DVB-H. Regarding the application framework, the latest standard, currently considered in a number of European countries, is OMA-BCAST. The Open Mobile Alliance normalisation body, considering interest of all stakeholders, has defined a model where all constituents' interfaces are normalised and interoperable. This simplifies industrial challenges by minimising integration complexity and scope, and defining clear responsibilities for each provider of a part of the system.

OMA-BCAST introduces unique new possibilities for Operators.
First, OMA-BCAST allows to create a network agnostic service platform for a convergent unicast (3G) and broadcast (DVB-H) Mobile TV. OMA-BCAST encompasses the key services expected by the market such as electronic program guides, interactivity, data casting as well as some advertisement management capabilities. Another key aspect is the introduction of a new standard for guaranteeing services and content protection called OMA-BCAST SmartCard Profile (SCP). This profile relies mainly on the SIM card to deal with the security on the handset. It takes benefits of mobile operator's 3G network to perform authentication and delivering customer keys in a secure and safe manner. All the interfaces between the SIM card and the operator's server are completely standardised excluding any proprietary interface implementation and thus market fragmentation.

OMA BCAST end-to-end framework includes:
– the Service Guide, providing description of channels, programmes and interactivities 
– the video encoders or transcoders that format the video content and scramble it 
– the DVB-H IP Encapsulator for transport over distribution network 
– the Conditional Access System, securing revenues and protecting content.
– The SCP server will comprise two key elements with headend signal packaging, and SIM Centric deciphering capabilities.
– the BSF server, interface with the operator's client database and the access control system 
– last but not least, a DVB-H/3G OMA compatible handset with a SIM card
With this model, unlike other versions of standards such as OSF, there is no fragmentation of the handset market as only one integration of a standard agent is required by handset manufacturers. All other parts of the end to end system functions through well defined interfaces, and regular meetings called ‘Test fests', organised by OMA, allow all providers to tests intensively their solutions within the ecosystem.

Yet as for all recent standards, interpretation of key features can compromise interoperability, and this is another challenge to address. By just replacing one part of an end to end system you might end up with unexpected incompatibilities. It is therefore key to select the adequate providers, and make sure they are compatible with one another.

From the Mobile Operator's perspective, the SIM card hosts yet another key application, as the container for core security of mobile TV. Security renewal becomes a key issue since a threat on the mobile TV security would trigger one of the two : either putting at risk the content deals, either changing all SIM Cards impacted. As a mobile operator, before selecting your SCP server, special attention should be given to countermeasures and responsibility over security.

The paramount interest of a standard such as OMA BCAST for any of the stakeholders rely on valuable benefits:
– Standardised interfaces: especially beneficial regarding availability of handsets
– Simplified relationships between stakeholders: responsibilities being well defined, contractual and operations related issues become seamless
– Time to market: by reducing integration workload on handsets and moving to interoperability issues, the lead time to build an ecosystem is reduced. Where six months on average were necessary to integrate software parts on the handset, those can now be reduced to the original integration of an OMA Bcast SCP agent by the handset manufacturer
– Reduced broadcast network bandwidth with improved customer service access: entitlements are delivered through the 3G network directly to the customers that require access to a service
– Optimize Deployment Coverage by allowing a 3G/DVB-H offer to coexist seamlessly.
Provided the distribution network model is defined, as it depends on country-specific regulations, the main issues for any deployment will therefore focus on:
– setting the adequate partnerships for acquiring contents and proposing a stimulating offer
– selecting an adequate, pre-integrated set of providers for the end to end distribution platforms, including handsets and Sim cards.

With an anticipated interoperability process put in place through partnerships, the best of breed vs suites debate becomes irrelevant. The best in class become part of a de-facto suite, as in the partnership approach conducted by ENENSYS, EXPWAY and Viaccess.

The initiative launched in Q2 2008 by the three partners aims at providing customers and operators with a production ready end-to-end environment, including handset partners.

The full scope system, available for trials and production deployment, includes optimised capacities inherited from each of the partners' exclusive features. On top of standards implemen-tation.

ENENSYS head end system includes:
– a Mobile TV transcoder (TransCaster) that turns IPTV or satellite feeds into H264 video stream. TransCaster can run in conjunction with CryptoCaster produt to enable a full SimulCrypt operation and secure content with Viaccess scrambling keys; 
– a DVB-H IP Encapsulator (MobiMux), statistical encoding and Multiple Network Operators capable, that builds the DVB-H multiplexes for the various target platforms;
– an SFN adapter that enables the synchronisation of all transmitters on the network;
– ENENSYS also offers IP distribution means to distribute content from head end to transmitters , Test & Monitoring means (field testers, probes…) as well as a complete automated Network Management System.

EXPWAY Electronic Service Guide Platform includes:
– a Service Aggregator and a Service Designer that allows operators or broadcasters to manage their mobile TV offering and provide key services such as Electronic Program Guide, interactive services and advertisements;
– a Broadcast Delivery Server that allows to push the service offering to the handset through the DVB-H networks;
– a Unicast Delivery Server that allows to push the service definition to the handset through the 3G network.

Viaccess's Conditional Access System dedicated to OMA Bcast SCP standard provides enhanced security and renewability. It extends lifetime of SIM cards and thus reduces SIM management costs for Mobile Operators.

The three companies have conducted early interoperability schemes together, and announced a fully deployable solution. "We believe the best value we can propose clients with is turning the best in class products into immediately deployable solutions, and minimise integration costs" says Justin Deeley, Viaccess VP Marketing.

"Integration level and close relationship between partners result in a smooth and simple configuration of the system with full guarantee in commercial handsets interoperability. Solution is performing and flexible enough to fit any redundancy level as per operator's requirements, thus allowing mastered integration of experimentation chain up to commercial deployment of DVB-H BCAST SCP networks. To switch from trial mode to production, a simple update of equipment makes it possible to move to an exhaustive SFN roll-out network. Such an incremental network design is the key for operators to build a secured business plan based on a sustainable system focusing on CAPEX optimization." says Eric Deniau, ENENSYS VP Operations & Innovation.

"Having an integrated solution, full featured and carrier grade is a major breakthrough for the Mobile TV market. Operators, Broadcasters and Content Owners can safely rely on the partner's solutions to deploy a nationwise Mobile TV and to propose innovative services and contents that their users enjoy", according to Claude Seyrat, VP Marketing and Strategy at EXPWAY.

OMA BCAST standard is the most performing standard for interactive and interoperable Mobile TV broadcast. Technology suppliers are striving to build fragmented offers around BCAST on the market, but the keystone for operators will definitely be the flexibility of the overall solution. Proven interoperability and reliability should be the core focus before deploying a trial or commercial roll out, and special attention must be paid in regards of prior tests conducted.

This shall, on top of a robust and efficient standard selection, ensure smooth roll out of trials and production networks. Players like ENENSYS, EXPWAY and Viaccess should play a key role in forthcoming deployments with DVB H, and have shown to be ready for deployment, anticipating the market take off.

Mobile Europe:
We last talked to Nagravision in this manner at the end of 2007, and it’s always good to take stock and look at how the industry has developed in recent months. What do you think have been the major changes in the market since we last talked?

Jean-Luc Jaquier:
The market has been evolving, and is now really starting to take off, even though it is in many areas still nascent. We have seen licenses granted in many areas, and operators start to launch services. We ourselves have been involved in a couple of major rollouts – one in China. And we are also entering into DVB-SH rollouts in Europe, with Eutelsat, and in the USA with ICO.

I think we are at a good moment in time for mobile TV broadcasting, and next year there will be a big boom in service provision.

On our side, we have continued our development of different platforms to serve the mobile operators, broadcasters and service providers. We have launched our Micro-SD platform, and seen it gain traction in the market. We have also seen OMA-BCAST become an accepted standard along with Open Security Framework, and operators start to look at it.

ME:
Despite this progress, has the pace of the market development been slightly slower than you expected previously?

J-L J:
For sure, we are now behind where we expected we would be two years ago. Back then Italy was rolling out very fast with all three operators, 3 Italia, TIM and Vodafone, and we were optimistic. But the market has been delayed by regulation and spectrum issues since then. In DVB-H, now you have countries such as Switzerland, France, Holland, who are either already launched or looking at launching in the coming months. Things are becoming much more concrete. The main failure has been the disaster in Germany – we saw what happened when broadcaster network operators and mobile operators do not manage to strike a deal together.

So I think the important point to take from this is that we need to see three-way partnerships between the content owners, the broadcasters, and the mobile operators to make mobile TV a success. Only if the industry works together will we see continued progress.

ME:
Can you describe how you think those partnerships might work in reality?

J-L J:
In the mobile TV value chain, each party has different strengths. The content owners need to bring their creativity, perhaps made-for-mobile content and so on, in order to add as much value as possible. The broadcaster has the power to push mobile TV to the public, whilst maintaining a high quality of service. The mobile operators have direct access to the consumers, which is not always the case for broadcasters. They also have the capability to finance mobile phones into the market and have huge marketing power. All the partners have to be in a strong relationship for the benefits of these strengths to be realised.

ME:
In terms of the business model the market might follow, we’ve seen free services as well as paid-for content. We’ve also seen free services that are still encrypted, ensuring payment is made at some point in the value chain. What do you think now offers the best chance of success.

J-L J:
Free TV is a risky model for service operators and broadcasters, who are losing money paying for the broadcast network rollout and maintenance. The main players who currently benefit from the value chain by making money out of Free TV are device vendors. The other players have to invest in the broadcast service, hoping to recoup with advertisement revenues in the long run. Yet advertising revenues will only start to generate decent revenues when the service is reaching mass market, which is likely to take years. There is a long revenue gap to bridge over these years.

At the same time, lack of revenues out of Free TV will lead to lower investments in the network infrastructure and poorer in-door service coverage, which will hinder mass market adoption. It is actually the most critical issue of the success of Free Mobile TV over DVB-T, which is not deployed for deep in-door coverage.

But as you have mentioned in your question a sustainable way of offering Free TV while providing revenues is to finance the network rollout and its maintenance by collecting a one-time service access fee. This fee could be invisible to the consumer and would be collected for each mobile broadcast device sold. The model is being considered in several countries, today.

Now the question is how to make sure this Free TV access fee is collected. The solution is to encrypt the content, so only authorised devices (that is to say for which the service access fee has been paid) can access the service. Also, the devices that are bypassing the fee (e.g. through on-line Internet sales from other regions) would not work on the network.

Another advantage of the approach is to offer the maximum flexibility in business models, offering for instance a mix of Free TV and Subscription TV out of the same channels: for instance Public Service Broadcaster TV channels can be served as Free TV with one-time access fee on retail Portable Players, while partnering Mobile Operators can charge a recurring monthly access fee on their mobile phone service.

ME:
Can this model be sustained within a mobile operators’ overall convergence strategies, as they seek to deliver services to a range of devices, fixed and mobile.

J-L J:
Multimedia convergence evolves around two axis, terminals and content. The first axis is about offering a cross-device service ubiquity, whereby the service operator’s content is offered to consumers through any receiver means, such as mobile phones, portable players, PCs, STB to TV sets -broadcast or IP STB-, games consoles, in-car entertainment devices, etc. The second axis is about offering richer content on the devices, from linear TV to interactivity, content on demand, music, games, etc.

Being a leading actor in all networks and markets, broadcast TV, broadband and mobile TV, Nagravision is offering fully-integrated solutions to support the service operators in their multimedia convergence strategy. A key success factor is a service head-end that federates across delivery networks and consumption devices.  Such a service head-end is typically built around three pillars: content security, content management and a service delivery platform (SDP) to create the applications and content business logic. The service head-end thus becomes the cornerstone that seamlessly converges the entire service creation, content management and content protection across the different delivery platforms. It’s therefore well on its way to become a service- and business-defining factor for many digital TV operators who are serious about service convergence.

ME:
And the introduction of standards has helped the industry consolidate around this model?

J-LJ:
Certainly, and when it comes to standards we are active in all fronts, with both mobile operators and broadcasters, in bringing mobile TV to the mass market. We provide a multi-standard security solution, based on OMA BCAST and OSF standards. Today, we offer the widest choice of terminals, covering Mobile TV handsets, Portable Media Players, In-Car entertainment devices, USB dongles, and Portable Navigation Devices.

Our position within the DVB-H Mobile TV market is very strong, with more than 90% market share in number of users, and more than 25 DVB-H terminals working with our solutions. The latest introduction in our device partner ecosystem are Garmin and Avmap, the world-first DVB-H Mobile TV and GPS terminals, offering interesting opportunities for converging Mobile TV and Location Based Services.

Also, we have very recently announced our selection by Chinese’s State Administration of Radio, Film and TV (SARFT) for their nationwide China Mobile Multimedia Broadcasting (CMMB) mobile TV service, being rolled out as we speak. The project is a fantastic opportunity for our company, as we are talking about dozens of millions of users in the coming years, using both mobile phones and portable media players. The entire Mobile TV market will benefit from the Chinese service rollout, with the introduction of dozens of low cost terminals and reference designs available to service operators and consumers worldwide.

Finally, as I mentioned at the start of this interview, we have also announced our selection by Eutelsat for a DVB-SH pilot in Europe, as well as ICO for a DVB-SH pilot in the US, which further strengthen our position of multi-standard Mobile TV service protection leader.

Our technology, service protection, means much more than securing content access; it’s the essential keystone of the sustainability of the Mobile TV business case: from enabling and sustaining Mobile TV revenues on the long run, to allowing a balance between content owners, broadcasters, mobile operators and terminal manufacturers. It is the key technology to offer the consumers what they are looking for: a great outdoor and indoor coverage for their favourite high quality basic and premium content.

ME:
Jean-Luc, thank you.

Keith Dyer hears that femtocells can have a bright future if vendors can solve several pressing operator requirements

When an industry body forms with seven founding members, and a year later has over eighty members drawn from operators and vendors, it's reasonable to assume there is something significant going on. When that body starts producing agreement across its members on a common approach to standards within that time frame, then you can certainly assume that the body is more than a talking shop.

This is what happened with the Femto Forum, a body started in the summer of 2007, with just seven members. Clearly, then, the Forum founders had realised that their customers, the operators, required a common approach that would, in the end benefit all.

Of the issues facing operators, one of the key ones was how they would manage the integration and aggregation of femtocells into their core networks. With millions, potentially, of these devices going into people's homes and offices, operators made it clear that it was essential that they had one common interface to manage, no matter who the femtocell supplier was.

So at its plenary meeting in March, operator members agreed the following principles for interoperability on the interface (called the Fa interface) between Femtocell Access Points and Femto Gateways. They agreed there would be:
– a single definition of the Fa interface with specific modules defined for each radio technology to comply with existing standards.
– A "collapsed" architecture where the NodeB/BTS and RNC/BSC functionality will be placed in the Femto Access Point (FAP) to optimize signaling and performance over the broadband connection.
– Interfaces from the Gateway to the core network shall use existing standards.
By making representations and recommendations to industry standards bodies, 3GPP, 3GPP2 and establishing cooperation agreements with the DSL Forum and the GSMA, the result was to adopt a commitments to standardise around the luh interface. This was slightly controversial at the time, as it meant delaying going down a SIP/IMS control path. But with operators delaying their own IMS investments, or at the least taking a piecemeal approach to IMS, this has not been seen as a bar.
Steve Mallinson, ceo, ip.access, says that the critical issue is giving operators a working solution that meets their current and future needs. Although luh standardization is not finished yet, it is only by getting standards into the femotcells area that "we will see big volumes in the long term".
Mallinson says that he thinks the standard may be finalized by the end of the year, with the first compatible products available by mid-2009.

More importantly, Mallinson says, operators want to see that their vendors have a migration path to standards, rather than insist everything they deploy or install from this point on, is fully standards compliant. This allows them to go ahead with their trials, and even commercial launches, without worrying about the standards as they are formed.

The other main area of standards focus within femtocells to date has been in the management of the femtocells themselves.

In July this year, following a plenary meeting in June, the Femto Forum announced its members have agreed to implement the Broadband Forum's TR-069 "CPE WAN Management Protocol".  The adoption of this standard is critical because, unlike traditional cellular equipment, femtocells will be deployed in high volumes and installed by the subscriber, so the provisioning and configuration must be completely automated and managed remotely by the mobile operator. The TR-069 protocol standardizes secure CPE auto-configuration practices and incorporates other CPE management functions, including diagnostics and troubleshooting, performance monitoring, and software/image management, into a common framework. Some Femto Forum members have already adopted the protocol into their existing solutions, others will need to do so.

"Femtocells represent a very different approach to mobile network architecture and therefore require a suitably different approach to network management. The similarity to fixed broadband networks is obvious so TR-069, the dominant standard for the management of broadband gateways, is the natural choice," said George Dobrowski, The Broadband Forum's Chairman.

As well as the management of the CPE, there is the question of how femtocells will interact with the macro network itself. Michael Flanagan, CTO, Arieso, points out that in most deployment models, femtocells take advantage of a subscriber-provided backhaul path to provide licensed cellular service in a manner analogous to the commonly used WiFi router. However, the interactions between femtocells and the overlay macro network are critical for the success of future femtocell deployments.
"Widespread femtocell deployments will put additional strain on traditional maintenance, as well as the operation of the macro network," Flanagan says.

"System parameters will routinely need to be updated to account for the addition and deletion of femtocell sites. If the femtocell market lives up to its promise and hype, there will rapidly come a point when it will no longer be physically or financially possible to conduct routine updates of the overlay macro network manually."

At that point, Flanagan says, network operators will need to be able to rely on automated software solutions in order to maintain target quality objectives across multiple service classes. Such solutions will also need to allow the overlay macro network to reconfigure itself automatically in order to respond to the areas that are served by femtocells (or not served, in the cases where femtocells go out of service).  Using this kind of software, the macro network will be able to redirect its coverage and capacity to other areas in order to make maximum use of all network resources (including the femtocells).

Flanagan thinks that while the standard model for femtocells is based on the subscriber-driven "pull" of femtocell purchases, new solutions coming to the market will allow for a service-provider-driven "push" of femtocells onto the network. This will enable service providers to identify areas where femtocell additions would most relieve the overlay macro network.

"On their own," Flanagan says, "femtocells could end up causing as many headaches as they promise to solve. In order for femtocells to have a significant, positive impact it is necessary to ensure that the combined macro and femtocell networks are properly optimised and that automation replaces what would otherwise become labour intensive and prohibitively expensive update and configuration activities."

Further challenges lie ahead. Nick Rickard, Product Director in the wireless business group at Alcatel-Lucent, says that quality of service (QoS) cannot be guaranteed, since the femtocell relies on a broadband data connection provided by a third party. It may be necessary for operators to partner with ISPs to provide a guaranteed QoS to the customer, or indeed for operators to become ISPs themselves.

Rickard recognizes that billing can be an issue too, since operators will need to know when a customer is accessing services via the home femtocell or outdoor macro network, especially if enticing 'home zone' tariffs are offered to persuade users to install femtocells. Since users with home broadband connections already receive internet data services for 'free' with their ISP subscription, no operator could reasonably charge extra for data services via a femtocell which uses that 'free' resource. 

He also mentions security – since the femtocell uses the internet to connect to the operator's network, robust security measures (i.e. IPSec – IP Security) must be in place to prevent hackers from 'spoofing' the identity of a femtocell and obtaining services for free at someone else's expense. A system also needs to be in place to prevent a customer from taking a femtocell abroad and using it to obtain free "home" calls on a local broadband connection.

Yet, given the progress the Femto Forum, and its members, have made, there's no reason to think these issues cannot be resolved. The vendors involved know they can simply not afford to lose out.