Not Happening Yet

Quality of Service or innovation is definitely not on the priority list of
the Indian service providers. While the operators are adding 10 mn subscribers a
month, there is a clear lack of initiative or enthusiasm where new and better
technologies are concerned. This is aptly reflected in the industry's response
to femtocell technology.

Femtocells are basically a personal base station that reside at the
customer's premises. Plugged into fixed line broadband connections, these low
power radio systems provide improved cellular signal strengths within the
enclosed quarters enabling faster data downloads, and allow mobile users to use
their existing mobile devices to access both data and voice services. The key
differentiator of femtocells is that it allows mobile users to access fixed
mobile converged services via a single device-the handset.

Bharti Airtel, Reliance Communications and Vodafone, all became members of
Femtoforum about two years back but don't have any deployment of femtocell in
the country. Femtoforum is a not-for-profit membership organization founded in
2007 to promote femtocell deployment worldwide. According to some media reports
Bharti Airtel is conducting pilot projects for femtocells. The same is true for
Reliance Communications and Vodafone, both are members of Femtoforum but are
doing nothing about femtocell deployment in the country. Despite repeated
attempts none of the service provider is forthcoming about femtocells deployment
status.

“The telecom industry in India is yet to show any interest towards femtocells.
If it makes sense financially, there will be interest among operators. However,
operators' prime focus in the current situation would be on expansion,” says
Saji Mathew, AVP-IT at Tata Teleservices.

Femtocells definitely have the potential to make a major impact in the Indian
telecom market.“Femtocell can make a major impact in the Indian telecom market
especially for indoor solution (home/SOHO). Today, each operator is facing
challenge of giving the best indoor coverage. As more than 70% of traffic
happens inside the building, indoor coverage will be a major key performance
area for wireless operators in upcoming years,” says Sethumadhavan Srinivasan,
deputy director of network strategy and marketing, Huawei, Asia Pacific.

This coupled with the much anticipated launch of 3G services this year,
femtocells should see a good traction for femtocells this year. Due to increased
competitiveness in the Indian wireless market, operators are looking to
differentiate themselves with better technologies that can offer higher value to
the end user.

Operators across the globe are seeking new business opportunities while
trying to control capex and opex costs. Femtocells solutions can go a long way
to enable better traffic balancing between fixed and mobile networks that are
likely to lead to significant savings in Radio Access Network (RAN) while
enabling operators to enhance the user experience of their subscribers by
offering better coverage and increased capacity in the home environment.

“As of now, there is no interest from the Indian operators in any new
technology mainly because subscriber acquisition is at the top of their
priority. I think it has the potential to become popular in the near future,”
says Vivek Mohan, President, Alcatel Lucent.

Some of the leading operators recognize that femtocells provide an efficient
way to reduce their capex costs and at the same time offer a superior user
experience to their customers. Europe and North America along with Japan have
been the early adopters and are likely to see widespread adoption by 2010.
Starhub, Singapore has deployed femtocell solution last year, which is also the
world's first commercial femtocell deployment. Verizon is also planning to
deploy femtocells.

How does it work?

Femtocells basically create a micro-cell tower in the home, thus extending the range of wireless phone signals. It allows the subscribers to route calls over the Internet thus reducing pressure on the local towers.

The Pros

“Femtocell are basically designed for home and SOHO users and eliminate the
blind areas of the UMTS network. They also meet the demand for high speed
services, resulting in better 3G user experience. It goes a long way in reducing
the site rental cost with zero footprints. Automatic planning and software
upgrade means much lesser O&M effort. Apart from that being small and light,
they are easy to deploy,” says Sethumadhavan of Huawei.

Femtocells offer major advantages to the operators. To begin with it offers
seamless coverage for indoor scenario and leads to lower capex and savings in
transmission cost.

...and the Cons

The cost of femtocells is a hindrance in the acceptance of the technology.
Today the cost of femtocells is higher than many operators would like. The Bill
of Materials (BoM) today is $100 with the end product costing around $180 to
$200. This is seen as still too high for the mass market to take up. However,
many chip vendors are working hard to reduce the cost to $50 or even less.

“The next wave of cost reduction should come in 2009 when new entrants
compete and try to capture the market share,” says assistant vice president,
Aricent, Sudhir Tangri.

Commenting on the technological challenges associated with femtocells, Tangri
says, “The main technological challenges are installation, configuration and
management of femtocell. Apart from that integration and interoperability with
the existing macro network. Quality of Service management and interoperability
with the ISP network

A key driver for femtocells adoption, broadband penetration is lacking in
India with only 1-2 % of Indian households having broadband access. However, a
little push from the operators can definitely lead to the acceptance of the
technology in the country.

Going forward, there would be a niche market among the tech savvy consumers
in urban India, after UMTS deployment by major operators. Femtocells are managed
by the operators with a combination of in-house tools and proprietary management
systems. Femtoforum members have recently agreed to implement the Broadband
Forum's TR-069 `CPE WAN Management Protocol', a worldwide standard for real-time
management of customer premises equipment as the basis for the management
protocol for femtocells. This would enable the operators to automate
provisioning, configuration and also remote management of femtocells.

There are also some technical challenges associated with a mass market
deployment of femtocell solution. At one level the solution must be
easy-to-install at consumer level. At another level, the solution should be able
to crack the challenge of radio interference between femtocells and the public
infrastructure macrocells.

Though India is one of the biggest telecom markets in the world, the Indian
operators are clearly not at the forefront of the technological advances being
made. The Indian service providers are not the leaders where technology is
concerned.

Gagandeep Kaur

gagandeepk@cybermedia.co.in