Femtocells: the next big thing

Indoor base stations (aka femtocells) could substantially improve indoor 3G coverage and avoid the need for further investment in macrocellular networks by mobile operators, according to an Analysys report.

“3G network in-building coverage is significantly worse than that of 2G for most mobile operators worldwide,” according to report co-author Dr Alastair Brydon. “As the number of mobile users that make calls within their homes increases, operators could be forced to make substantial further investment in their macrocell networks to improve 3G coverage. However, deployment of millions of femtocells could provide a much less expensive alternative.”

Basically, indoor basestations can provide a less-expensive alternative to traditional outdoor cellular infrastructure for providing in-building coverage. Analysys reckons that femtocells in 60% of subscriber’s households could save an average of $45 per customer per year by 2012 for an operator with 5m users.

Cost savings are only part of the argument, though: “3G femtocells improve opportunities to generate additional voice revenue from fixed–mobile substitution, group tariffs, mobile data services and DSL.”

Analysys concludes that femtocells are set to cause fundamental changes and will drive fixed–mobile substitution. Clearly this opens up the possibility of new revenue streams for resellers.

But “critical implementation and performance issues need to be resolved before they can be deployed widely … These include interference, range, performance, network integration and management, hand over, billing and security”.

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