Mobil Europe 1.1

I JUST DONT THINK THEY GET IT WHO SAID IT, AND WHY?
FEMTOS BREAKOUT YEAR?

First in new series of special reports analyses the femtocell opportunity
MOBILE
EUROPE
ALSO INSIDE:
THE VOLTE STORY
EUROPES WIRELESS MAGAZINE S issue no. 209 S April/May 2010 S www.mobileeurope.co.uk
> How the industry
managed to agree on a common approach to voice over LTE
THE NEW VALUE CHAIN
> The four stages
of openness that lead to a new value chain that can actually benefit operators
HUAWEIS SDP
> Lance Lin
talks to Keith Dyer about operators SDP needs, and Huaweis ability to meet them
P34
Exclusive
FEMTOCELL MARKET
report inside
P36
P39
Contents
April/May 2010
How operators can develop and benefit from a new value chain
INSIGHT REPORT
INTRO: FEMTOCELLS MARKET @ CROSSROADS
A few years ago, widespread femtocell adoption formed the basis for a (not that funny) joke. But femtocells are now no laughing matter. Jarich introduces a college course with no exams.
15 16 18 20 21 22
FEMTO 101 THE FEMTOCELL PROMISE

The basic femtocell premise, and promise, with added stats on data usage, smartphone adoption and femtocells use cases and benefits.
The story behid the next generation of voice services
FEMTO 102 THE END-TO-END FEMTOCELL NETWORK
The femtocell itself, and its place in the network. What is in a femtocell, and what else is required in its operation, management and deployment.
REGULARS
EDITORIAL
FEMTO 201 THE FEMTOCELL VENDORS

Who are the key vendors across the femtocell sector? Who provides what across the femtocell, controllers, silicon, software, security and integration services.
04 06
Keith Dyer guides you through Mobile Europes relaunch, and introduces the first of our Insight Reports.
FEMTO 202 THE FEMTOCELL OPERATORS NEWS

Still plenty of room for growth for NeoMedia, a case for mobile broadcast, Telenors next gen OSS, mobile dominating GPS shipments, Synchronica completes Colibria IM purchase, FonYou heads to Facebook, the sub-$100 femtocell, spam message reporting service, the hidden cost of the smartphone boom, mobile payments growth... And what of the operators themselves who have deployed to date? What have their strategies been, and are the numbers all that high in any case?
ADVANCED STUDIES THE YEAR AHEAD

We now have a solid view of the femtocell market to date, so what lies ahead from trials, to application development, to interoperability testing and marketing?
DIARY
42
The events and conferences coming up in the weeks ahead
EXTRA CREDIT UNANSWERABLE QUESTIONS

The questions that should be at the front of everyones mind as they think about the long-term prospects of the femtocell market.
What are the key growth areas and challenges facing operators as they consider a femtocell strategy?
FEATURES
THE VOICE OVER LTE STORY
25
34 36
The GSMAs director of technology Dan Warren tells the inside story of the move to VoLTE
A NEW VALUE CHAIN

PA Consultings Frazer Bennett says that if operators can achieve a new level of openness, then they stand a chance of creating and benefiting from a new value chain.
LEAD INTERVIEWS
HUAWEI
39
Huaweis Lance Lin on his companys award-winning position in the SDP market.
go to www.mobileeurope.co.uk for the latest information on mobile
Mobile Europe | 3
Comment
editor: keith dyer
You will notice a few changes to Mobile Europe in this issue both to how we now look, and to the content of the magazine. Im very excited to announce, with this issue of Mobile Europe, a relaunch of our proposition. What you see is the result of a lot of work, consultation and plain old-fashioned hard thinking about what Mobile Europe should be. Back at the turn of 2009 and 2010 we carried out extensive reader research. We asked how you accessed and used Mobile Europe, across our online and print presence. We asked what it was you wanted to see the print issue achieve, and what sort of things you wanted to read in it. And we asked you if you even wanted to receive a print issue at all. Was it worth it, we asked you, still producing print issues in this instant, 24 hour, Twitterinformed media market? The first answer you gave us was yes, you still want to receive a printed issue. This was a completely overwhelming response up above 90% of those polled. So the question then became what is the print issue for given the current media landscape? You were kind enough to say that you like what we do already, but also honest enough to point out possible improvements. If a trend was obvious, it was that many of you asked us for more detailed analysis of a particular market, or geography, or service area. And this makes sense for a print product. Its a format that rewards depth. So, in an age when many publishers are shutting their print products, we have taken the bold but informed step of redoubling our commitment to the format, and to the European mobile market. First off, we are putting our own money where our intentions are. So for every issue of Mobile Europe we will commission, at our own expense, an independent report or piece of bespoke research from a leading analyst in a certain field. We call this series Mobile Europe Insight Report. This issues Insight Report is into the femtocell market. Through the rest of this year future In an age when many we will cover LTE, mobile money, backhaul publishers are shutting their and cloud services. Around these core reports we will programme a series of webinars, surveys, polls and operator interviews, as well as feature the industrys own opinion and thought leadership. We ask you to get involved in this programme, to drive Mobile Europe into becoming a truly valuable and lasting resource for the industry. You will see a redeveloped website also support these programmes. Further, our print issues will still offer you the pick of the best news, and our features will be even more focussed on operator business models and strategies. Again this is something you asked for. Id like to ask you to stay in touch with us after youve read this issue, so we can continue to give you, the European mobile industry, what you require and desire.
MOBILE
EUROPE
Editor: Keith Dyer keith.dyer@stjohnpatrick.com Direct tel: +44 (0) 203 007 0020 Web editor: Robert Riggs robert.riggs@stjohnpatrick.com Production Manager: Tania King Publisher: John Owen john.owen@stjohnpatrick.com Direct tel: +44 (0) 20 7933 8972 Publishing director: Chris Cooke ISSN: 1350 7362 Free Subscriptions Mobile Europe is a controlled circulation monthly magazine available free to selected personnel at the publishers discretion. If you wish to apply for regular free copies then please write to: Database Services St John Patrick Publishing Ltd PO Box 6009, Thatcham, Berkshire, RG19 4TT. Tel: +44 (0) 1635 879361 Email: mobileeurope@circdata.com or register free online at: www.mobileeurope.co.uk Paid Subscriptions Readers who fall outside the strict terms of control may purchase an annual subscription . UK 1 Year - 96. International 1 Year - 120. Subscription enquiries should be sent to: Saint John Patrick Publishers PO Box 6009, Thatcham, Berkshire RG19 4TT United Kingdom Tel: +44 (0)1635 879361 Fax: +44 (0) 1635 868594 Email: mobileeurope@circdata.com Web: wwwmobileeurope.co.uk
print products, we are redoubling our commitment to the format
Printed by William Gibbons & Sons Ltd, Willenhall, UK.
The views expressed in Mobile Europe are not necessarily those of the editor or the publisher. Mobile Europe is published by Saint John Patrick Publishers Ltd, 6 Laurence Pountney Hill, London EC4R 0BL.
4 | Mobile Europe
News
barcodes l mobile broadcast l briefs
NEOMEDIA BOSS SAYS FUTURE STILL BRIGHT

NeoMedia faces a bright future within a 2D barcode market is set for major growth, according to CEO Iain McCready. NeoMedia struck license deals in 2009 with Mobile Tag, BEMS, Scanbuy and NeuStar, and in 2010 with Mobiento and MORE Mobile Relations, two Swedish companies. It also has an agreement to load NeoMedia's reader in Sony Ericsson phones. Yet despite these developments, a recent Telefonica phones in 13 Latin American countries. And Sony Ericsson has committed to pre-installing the application on some of its phones. App stores also offer a further opportunity with NeoMedia is a top five download on Sony Ericsson's application store. One major frustration for McCready has been with mobile operators. McCready agreed that two years ago mobile operators were a key target for NeoMedia, but "not any more." Even though NeoMedia has offered operators a free platform with a revenue share deal for any earnings, they still haven't had any takers. "I just don't think they get it," he said. "They are in major danger of Facebook, Google and GS1 eating their lunch."
I The GSA says 2,349 HSPA user devices have been launched by more than 230 suppliers, with 610 devices announced in the last 6 months alone. In the notebooks and netbooks segment, 432 products are equipped with HSPA embedded as standard or optional, and 10 HSPA-enabled e-book readers are launched. There are now almost 1,000 models of HSPA-enabled phones on the market, with smartphones being the key growth segment. I Mobile TeleSystems (MTS) has become the first Russian operator to outsource its network operations, in a deal with Nokia Siemens Networks. The company is aiming to simplify its overall network operations model, which is especially important with the rollout of 3G services for millions of subscribers in Russia's central region. I Mentum will acquire Ascom's network planing business. The business includes the products TEMS CellPlanner and TEMS LinkPlanner and is located in Kista, Sweden. The business currently employs 28 people and all employees are being given the opportunity to transfer with the business. I SFR, in collaboration with Nokia Siemens Networks, will be displaying the latest HSPA+ technology, with download speeds of up to 28 Mbps, on a live 3G network in a trial to be held in the city of Marseille. The trials follows the deployment of 14.4 Mbps for SFR in 2009.
"INCONCEIVABLE" THAT INVESTOR WILL WITHDRAW JUST AS MARKET ACCELERATES

filing by NeoMedia to the SEC warned about the company's ability to continue as a going concern. McCready, however, insisted that it would be "inconceivable" that after its $50 million investment to date, Yorkville would cease to invest just as NeoMedia sees "tremendous acceleration in the marketplace" and "as it stands so close to its goals". McCready said that the licensing deals and the handset deal are evidence that there is movement in the mobile 2D bardcode space. The BEMS deal means the reader will be on all
2D barcodes set for growth. Who will profit?
I The Femto Forum has completed the first femtocell plugfest. The plugfest process, which extended over many months and culminated in a test event was organized in cooperation with ETSI and had vendor support from over twenty companies participating, including vendors of network equipment and femtocells as well as software and hardware components. The companies involved were Ablaze Wireless, Acme Packet, Airvana, Alcatel-Lucent Telecom, Alpha Networks, Askey Computer Corporation, C&S Microwave, Cisco Systems Inc, Contela, Continuous Computing, Genband, Huawei, IntelliNet Technologies, ip.access, Kineto Wireless, NEC, Node-H, Nokia Siemens Networks, picoChip, Technicolor, TRaC Global and Ubiquisys.
Boom could bring operators back to broadcast

Despite very limited roll outs of mobile broadcast TV in Europe so far, increasing data use will drive operators to reconsider broadcast as a multimedia data delivery tool, according to Chem Assayag, Head of Business Development for Qualcomm MediaFLO Technologies. Assayag said that MediaFLO is in talks with European operators now about using broadcast not just for TV, but for data casting and other uses. "12 to 18 months ago operators would have been less concerned, but as they see increasing problems on their 3G networks their interest has evolved. They are now listening again," he said. "It's quite a practical decision to make. What are the cost benefits of 3G and LTE against broadcast if you have to deliver the same content to a million users? Some might say that LTE will solve the problems, but consumer expectations are also going to change. As LTE is rolled out users will demand high resolutions and larger screens, meaning there will be more bandwidth demands on the infrastructure." Assayag said that FLO could have an announcement about European activity within 6-12 months, but he couldn't commit to any more than that.
6 | Mobile Europe
News
OSS l smartphone stats l GPS
Operators to address mid-tier usage

The mid to low tier was the fastest growing smartphone sector in 2009 in Europe, according to stats released from comScore. comScore found that the fastest growth for smartphone adoption was for tariffs below 50 in France, Germany, Italy and Spain, and 35 in the UK. Although adoption of high-end tariffs also showed good growth in the UK (60%) and France (43%), across the board it was the mid to low tier segment that topped the charts, with adoption of sub-50 contracts
TELENOR GRAPPLES WITH MULTIPLE OSS
Telenor HQ - now with fewer OSS
82% OF ALL USERS PAY LESS THAN 35 A MONTH

growing 52% in France, about 40% in Germany and Spain and 14% in Italy. "We are seeing that people who pay less on a monthly basis are also less intensive data users," CommSCores Alistair Hill said. "Yes, they are using smartphones and data services but these types of devices are not quite iPhones. They tend to be Symbian based devices that are not quite as smart as the iPhone." Hill said that 20% of users in the mid-low tier use their devices for data every day, against 32% of high end users. 82% of all users pay less than 35 a month, Hill added, so addressing that market with smartphone devices that drive mobile media use will be critical for operators.
Operating companies in the Telenor group are demonstrating the pressing need for operators to get a grip on diverse operating systems, and consolidate their back office software and functions. Telenor Norway is consolidating diverse inventory and resource management systems onto a single next-gen platform from Telcordia. In Denmark, Telenor is using Ontology Systems to provide a single view, across nine different OSS, of the impact network changes will have on the customer and services. This need is also generating an opportunity for companies in the OSS space, as well as attracting attention from the network
MOBILE DOMINATES GPS MARKET

Demand from the cellular industry for GPS ICs nearly doubled during 2009, according to IMS Research. IMS Research, which operates a service tracking GPS IC shipments, has reported that the cellular market for GPS ICs grew 91% in 2009. In absolute terms, IMS estimated that mobile phones accounted for 76 million GPS IC shipments in the fourth quarter of 2009, with 40 million shipped in 4Q 2008. In terms of market share, that was enough to lift cellular from 80% to 83%. The next biggest sector was the PND sector, with 8.2 million in 4Q 2009 9% of the market. Tom Arran, research analyst at IMS Research, said Ericsson and Texas Instrument were two companies showing good growth. Arran added that digital cameras and notebooks would be the next markets to show major growth.
equipment vendors themselves, all of whom have stepped up their services support capabilities. For Telcordia's Ray Bariso, the contract to provide operational support systems for Telenor's next generation network is proof that the company can "continue to compete and win on the global wireless stage". Telcordia is providing inventory and resource management software to Telenor as the operator continues to upgrade its 2G and 3G, and deploy 4G, networks using equipment from Starent and Huawei. Bariso, who is Executive Director, Operations Solutions, Telcordia, said that Telcordia's OSS would provide the basis for Telenor to drive increased operational efficiency throughout their business. "Operators need to address the operating expense gap they have and the only way to do that is to address their operational efficiency. On the back end that starts by having a core of service and resource inventory that all their other components rely on. Bariso said that Telcordia's systems would replace a "varied set" of inventory systems that the operator had built up over time. Telcordia is an existing supplier to the operator for its Application Server Platform and in service delivery, but this is a new customer for Telcordia on the OSS side.
go to www.mobileeurope.co.uk for the latest mobile news
Mobile Europe | 7
News
messaging l backhaul test l facebook telephony
SYNCHRONICA OUTLINES PLANS FOR COLIBRIA

Synchronica CEO Carsten Brinkschulte told Mobile Europe that the key aspect of a deal to buy Colibrias IMPS business is to acquire Colibrias operator customer base, as well as future revenues. The transaction will see Synchronica take over responsibility for Colibria's 13 operator contracts, as well as 46 people. It is paying $750,000 in cash, plus two tranches of new shares, for the mobile-IM focused business assets of Colibria. OMA IMPS (Internet Messaging and Presence Server) is a standard used to provide mobile IM and presence-enhanced messaging services. It is specified in the GSMA PIM programme for interoperable mobile IM. But IMPS presence servers and gateways can also be used to open up online communities, such as GoogleTalk, to interoperate with users of "operator" mobile IM communities. Colibria's technology will give Synchronica a ready-made mobile IM technology to add to its Mobile Gateway 5 product, which includes push email as well as an OMA IMPS compliant presence server. In time, Brinkshulte said, the two products would be combined. Colibria will keep hold of its SIP/SIMPLE assets, with which it addresses pre-IMS and IMS opportunities, including support for operators committed to the GSMA's Rich Communications Suite path. Brinkschulte said that he saw IMS and SIP/SIMPLE deployments as more geared towards mature markets, whereas Synchronica wants to take its services to the emerging markets. Operators' "own brand" IM is seen as particularly relevant in emerging markets, though not exclusively in emerging markets. Telecom Italia and Optimus are two European operators with IMPS-based services. Brinkschulte confirmed that as well as the IMPS assets, Synchronica has bought Colibria's Windows Live Messenger mobile gateway technology. "Microsoft has special requirements around the UI and technical protocols," he said, "and carriers need to know that they are complying with Microsoft's legal requirements."
Testing times for mobile backhaul
Ixia now includes time sync protocol support
Synchronicas Mobile Gateway UI
FonYou takes operators to Facebook users

Internet-based telephony provider fonYou has said it will launch a Facebook mobile application that will allow users to have a "Facebook number". The idea is that Facebook users will sign up for the appllication, which will give them a second number, alongside their usual mobile number. Then the fonYoudriven application will import Facebook contacts into the application's address book automatically, as well as letting other users know that user is using the app - asking them to add the number to their contacts. The attraction of having a Facebook number is that a user can keep their "private" number, whilst allowing Facebook contacts to contact him through the second "social network" number. The application will be available in May 2010, fonYou CEO Fernando Nez Mendoza said. One thing worth noting is that this is not a VoIP or internet telephony app integrated into Facebook. It is regular mobile telephony with a second number distributed through and on Facebook, and managed from within Facebook. "The implications are radical. Operators have to go where the users are and the most impressive growth of users currently is on Facebook," said Nez Mendoza.
Ixia has responded to the introduction of converged mobile backhaul networks, and the challenges facing operators of increased load on the backhaul, by introducing a new testing solution. Ixia now offers testing solutions for mobile backhaul protocols including IEEE 1588v2 and ITU-T Sync-Ebased time synchronisation standards. The explosive growth in the number of wireless subscribers using data-intensive smart phones has resulted in service providers rolling out wireless backhaul services over Carrier Ethernet and MPLS using IP as a cost-effective solution to accommodate increased bandwidth loads. TDM circuits provide ultra-high reliability, superior voice quality of service (QoS), and acutely accurate timing. Replacing TDM circuits with Ethernet technology requires attention to accurate timing - on the order of parts per million (ppm). The IEEE 1588v2 Precision Timing Protocol (PTP) and ITU-T Synchronous Ethernet (Sync-E) using Ethernet Synchronization Messaging Channel (ESMC) protocols address this issue. "The hurdle facing most mobile backhaul network operators is reproducing the stability and reliability of TDM on Ethernetbased services," said Bob Mandeville, president and founder of Iometrix. "Full end-to-end compliance testing of timing protocols such as 1588v2 - demonstrating reliability on par with TDM - is key for equipment manufacturers helping carriers to make the transition."
8 | Mobile Europe
femtocell l spam
SUB-$100 FEMTO CAN BE PROFITABLE

Ubiquisys has said that it can profitably support the production of sub$100 femtocells. Ubiquisys announced in April that SerComms's G3mini is the first example of a "new generation of low-cost femtocells" that can come in at under the $100 mark. One competitor had questioned how Ubiquisys can support that number profitably. "I thought it was a strange thing to announce," the industry player said to Mobile Europe. "Is it achievable, can anyone make money at that price today? It's not enough to stay in business at today's volumes." But Keith Day, VP Marketing Ubiquisys, said that the company's hardware and software designs can support manufacturers in the profitale production of femtocells that fall "well within" the $100 mark without compromising performance. He added that the number has been reached without factoring in massive volume production. The first order to attain that sub $100 mark was for 100,000 units, he said. "We make healthy margins at below $100. We are a small UK company that does nothing other than make femtocells. We have to answer to our shareholders and be sustainable. In fact, we deliberately waited to talk about this because we didn't want it to appear as just a publicity stunt before we started to implement it with manufacturers, get a robust product, and get orders." "How do we do it? The process is fairly clear. We have encapsulated the radio bit and a lot of femto deployment expertise into our Femtocell Engine software. By doing that we can help manufacturers deliver femtocells without the need for them to have 3G radio or software expertise," Day said. " They can also benefit from efficiencies of production through our customisable hardware designs." Day added that performance need not be affected. Some competitors have proposed that cheaper products can be produced with less sophisticated RF designs, where operators can deploy femotcells in a sole carrier. But Day insisted that the Ubiquisys femtocell has been designed "from the outset" for use in shared carriers. "We think the G3 mini is best in class. It is eight calls and has real time continuous self-organisation," Day said.
SPAM REPORTING SERVICE

The GSMA is introducing a service to allow customers to use a shortcode to report spam or fraudulent messages to mobile operators. The industry body will also keep a central record of all reported spam, delivering reports and anonymised data back to mobile operators so that they can identify spam sources and benchmark their own filtering performance against industry norms. The service, called the Spam Reporting Service, will use the code 7726', (SPAM) where local national numbering plans permit.
go to www.mobileeurope.co.uk for the latest mobile news
Mobile Europe | 9
Advertorial PT
EVOLVING TO NEXT GENERATION SIGNALLING: THE COST BENEFITS AND COMPETITIVE ADVANTAGES
Comfone deploys flexible next-generation IP-based signaling solutions to advance the reach of their network.
QUESTION:
To stay competitive in todays business environment, Comfone faces the continuing challenge of expanding their reach to new operators. What do you see as some of the hurdles that operators face today as they look to reduce their roaming coverage costs?
Advanced signalling solutions enable efficient roaming from the smallest to the largest carriers.
ANSWER:
Operators expect a roaming service provider like Comfone to offer roaming solutions which enable them to increase their revenue as well as the effectiveness of their roaming business, while at the same time reducing their costs. They want expert know-how regarding all elements of roaming such as signalling and clearing, and, additionally, they need innovative solutions which anticipate their future challenges, as is the case with data roaming at the moment.
QUESTION:
As a leading provider of roaming, signalling and value added services; can you speak about the importance of providing your customers a variety of access options for their signalling needs?
ANSWER:
It is certainly very important to offer a variety of access options to a mobile operator. Based on their infrastructure and their technical requirements, they want a customised solution, one which fulfills their specific needs. With Comfone, mobile operators have the choice of Signalling Access over Public Internet, Signalling Access over private MPLS or via dedicated access with a leased line to one of Comfone's MeetMe-Point Telehouses. Signalling Access over Internet (SAoI), an innovative solution provided by Comfone, offers a quick and cost-effective access method to connect operators to Comfone's infrastructure. This freedom of choice is an important competitive edge for Comfone.
ANSWER:
One of Comfones primary goals is to offer its customers reliable, high quality services and solutions. In order to guarantee this, Comfone has enhanced its network to IP-based signalling infrastructure, by means of introducing SAoI and SIGTRAN. This step is a costeffective alternative to choosing traditionally more expensive circuit switched facilities. Lowering the infrastructure costs results in more competitive pricing for Comfone, which is also a benefit for our customers. The wide reach of the Internet also allows Comfone to extend its service offerings to a broader range of mobile operators from the smallest to largest operators and in some geographically remote locations.
QUESTION:
Can you elaborate on Comfones innovative signalling access offerings that allow mobile operators to take advantage of next-generation signalling Signalling Access over Internet (SAoI)?
QUESTION:
While Comfone has embraced a next-generation IPbased signalling infrastructure as a means to controlling transport costs, how is Comfone able to cost-effectively
10 | Mobile Europe
Advertorial PT
offer service to mobile operators who have not yet made the transition to IP signalling?
allowing us to minimise costs while guaranteeing our high standards of quality and service.
ANSWER:
This does not pose any difficulty because the Mediation Devices (MDs) positioned at both the mobile operators premises and at Comfone are simultaneously able to establish a transparent virtual SS7 link over IP. With this solution mobile operators are able to achieve the cost benefits from IP It is important to us to know that the Signalling without costly supplier we choose is experienced and upgrades to their equipment. can offer us the most cost-effective, The deployment is virtually plug-and-play with the comprehensive signalling technology mediation devices remaining available today. Therefore know-how and transparent in the network, with expertise are important criteria no Point Code and requiring no hands-on maintenance once configured by the technical engineers of Comfone.
QUESTION:
You have discussed the various technical products and solutions that enable your network, what else do you look for in a supplier of your technology?
ANSWER:
It is important to us to know that the supplier we choose is experienced and can offer us the most cost-effective, comprehensive signalling technology available today. Therefore know-how and expertise are important criteria. Additionally, we also look for a cooperative and smooth working relationship and appreciate reliability and flexibility when implementing technological solutions into our core network. In such crucial projects, we also expect excellent and quick customer support from our suppliers. We at Comfone pay the utmost attention to offering our customers superb customer service, and we therefore know how important individual customer care is for customers and how it helps to build and secure long-term relationships. For information on SEGway Signalling Solutions, visit www.pt.com
QUESTION:
Comfone offers signalling over the public internet. Given the requirement for a high quality connection and the criticality of signalling, what technology makes this possible?
PTs wide array of SEGway Signalling Solutions appeal to carriers of all types.
ANSWER:
The Mediation Devices installed at Comfone, PTs SEGway Solution, have been optimised to provide a reliable signalling link within impaired quality IP networks such as the public Internet or over satellite. Issues which can significantly impact a signalling link, such as latency, are mediated within the MD to ensure the connection remains stable. These devices are able to operate reliably in networks with delays of up to 700 ms. It is also important to mention that a firewall at either end of the connection protects the Mediation Device against possible attacks from the Internet. Mediation Devices are a proven and industry-accepted solution, and have been deployed by many of Comfones connected operators. Above all, this SEGway Solution fulfills our mediation requirements regarding signalling capabilities very well and supports our ongoing endeavours to further enhance our Signalling service,
Mobile Europe | 11
News
Customer support l mobile money l briefs
THE HIDDEN COST OF THE SMARTPHONE BOOM

The impact the smartphone boom has had on mobile networks is well documented, but there is another cost for mobile operators that is hitting the profitability of new data services - and that is customer support. It may not be a sexy area, but consider the numbers. InnoPath's headline figure is that smartphones cost four times as much in terms of their lifetime support compared to featurephones. Stratecast estimates that smartphones require three times the average call handling time of a featurephone. Rob Dalgety, of Mformation, cites a Strategy Analytics stat that on average smart device calls last 45 minutes, "a lot longer" than the average feature phone call. "The problem for operators is that they are burning opex on these calls," Dalgety says. An InnoPath study in 2009 found that calls related to mobile email alone were costing operators and device makers $266 million a year. Just four main issues (email, internet settings, lost phones and handset bugs), representing less than 25% of support calls, cost operators $466 million over the 12 months to August 2009, InnoPath said. This can also lead to a knock-on cost as customers churn, or return handsets. RealVNC's Tom Blackie says that it's "not unusual" for 10-15% of new handsets to be returned as users struggle with configurations and become frustrated with lengthy calls to customer care centres.
Smartphones appear to mean increased care costs
I Colibria has appointed Lars Myhrum as CEO with immediate effect. Myhrum, co-founder of Colibria and Chief Operations Officer since 2000, takes over the role from Keith Gibson who will continue on the board of Colibria. I Mobile Streams has signed a deal with ringback tone specialist Muzicall to distribute a range of its content through Muzicall's distribution channels in the UK, Switzerland, Portugal and The Netherlands. The ringback tones from Mobile Streams will be added to the existing channels that Muzicall operates for network operators in these countries. I Anritsu has said it is the first test equipment vendor in the world to achieve GCF-approved test case validations for both LTE RF and protocol conformance testing. At the GCF CAG#22 meeting in April Anritsu successfully gained GCF approval for 12 RF test cases for its ME7873L RF Conformance Test System
This impact on mobile operators is leading the industry to prioritise investment in solutions that give device management capabilities to front line customer care agents. This includes remote diagnostics, as well as the ability to carry out over the air fixes. The emphasis is on increasing what InnoPath calls "first call resolution", and also on freeing up higher tier support for genuinely complex issues. InnoPath says that three year savings from integrating device management at the customer care level at a Tier1 operator could amount to $575 million.
together with additional test cases for its ME7832L Protocol Conformance Test System. I JDSU has announced the successful close of its acquisition of the Network Solutions communications test business of Agilent. The acquisition includes the unit's LTE network verification and deployment products. JDSU announced its intent to acquire Agilent's Network Solutions business for $165 million in cash on February 11, 2010. "We welcome a great team to JDSU," said Tom Waechter, president and chief executive officer of JDSU.
Mobile payments to reach $630 billion by 2014

A study from Juniper Research claims that the value of mobile payments for digital and physical goods, money transfers and NFC (Near Field Communications) transactions will reach almost $630bn by 2014, up from $170bn this year, representing the gross value of all purchases or the value of money being transferred. The mobile payments report attributes the growth across all market segments to the wide adoption of Smartphones and the increased use of apps stores. In addition SMS ticketing schemes such as those offered by OBB Austrian Railways and Skane Traffic in Sweden were also important developments. Shopping by mobile at stores such as Amazon Mobile is also tipped for significant expansion over the next five years.
App stores and smartphones boosting m-money
In developing markets SMS driven money transfer services are the main driver, increasing at a rate of 30% per annum.
12 | Mobile Europe
MOBILE EUROPE
INSIGHT REPORT
Femtocells: 2010 and beyond
Sponsored by:
INSIGHT REPORT
FEMTOCELLS MARKET @ CROSSROADS

have a friend who works in another part of the tech industry. Every year, around Christmas, he sends out a humorous take on his predictions for the year ahead in telecom. One year, for example, the list included, US Military Talks to Alien UFO via WiMAX. Funny, right? This was back in 2004 when the WiMAX hype was at its height and ripe for some goodnatured mocking. Two years later, as femtocell hype was just beginning to ramp, his focused turn on the small base stations. Femtocells to be Quickly Obsolete, Replaced by Cranial Implants Turning Every User into a, SelfPowered, Walking Base Station. Personally, I didnt find it his best attempt at humour. The point, however, was crystal clear: just like WiMAX before America, Asia and Europe; in just under it (and LTE to follow) the expectations three years, the industrys trade around femtocells were quickly diverging organization, the Femto Forum, has from reality. The early market forecasts grown to almost 100 members including that were continually pushed out year by a whos who of the network year by year only served to confirm this infrastructure and service provider world. thinking. Yet, as far as Fast forward to the market has 2010 and femtocells come, the fact Fast forward to 2010 and are no longer a that commercial femtocells are no longer a joking launches have joking matter. They may not just barely inched matter. They may not posses the possess the cach of into the double cach of LTE or claim the 450+ LTE or claim the digits points to its network deployments of WiMAX, infancy. More 450+ network deployments of importantly, but in just a few years the once WiMAX, but in just a combined with far fetched idea of in-home few years the once the success at cellular base stations has far-fetched idea of standards in-home cellular base creation and the progressed incredibly. stations has interest of a wide progressed variety of vendors incredibly. Consider the markets and operators, these launches suggest accomplishments: standards have been a market at a crossroads with paths established for the integration of femtos leading to mainstream adoption or into an operators 3GPP or 3GPP2 relative obscurity. Against this network; 10 commercial launches have backdrop, it is worth taking a step been announced - with others planned back to look at the market what it bringing femtocell services to North includes, who it includes, where it is
today and where it could be going. Think of it as a course touching on the basics, going deeper on those foundational topics, then following up with an exploration of what lies ahead in the near-term and a classic highereducation investigation into questions that may not have definitive answersall without the term papers, pop quizzes or late night studying.
ABOUT THE AUTHOR OF THIS INSIGHT REPORT: Peter Jarich is the Research Director and heads up the telecom networks practice at Current Analysis. He is responsible for managing the company's wireless infrastructure practice and specializes in CDMA2000, EV-DO, HSPA, LTE, WiMAX and femtocells. More specifically, he focuses on the competitive strategies driving these markets, weighing vendor roadmaps and product plans against operator demands.
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INSIGHT REPORT
FEMTO 101 THE FEMTOCELL PROMISE

t a very basic level, most people who have heard of femtocells know what they are and understand what they are meant to deliver. Compact, low-capacity, cellular base stations, femtocells extend an operators network coverage and capacity beyond the reach of its towers with backhaul (connectivity into the operators core network) provided by the customer and its broadband connection. This is, however, only one narrow aspect of the femtocell value proposition. Before we begin to investigate the players driving femtos into the market (and the obstacles they face), its critical to understand the broader femtocell promise for operators as well as endusers.
particular, the femtocell benefits to endusers generally fall into four categories: coverage, capacity, preferential tariffs, and applications. I Coverage. Its often believed that in mature 2G and 3G markets, the issue of coverage has been solved. Unfortunately, this is somewhat of a fallacy. Yes, operators may have managed to cover most major and even minor population centers. But, a number of studies have suggested that wireless services are most often used in places where signals may be partly or wholly blocked - at home or at work. In areas where homes and office buildings are constructed from hard to penetrate materials (think concrete, stone, coated glass) the impact on wireless service can be particularly profound. Even where signals can get through, the fact that signal strength correlates with data performance highlights the importance of solid coverage on service experience. In other words, femtocells can deliver high-quality wireless services where they werent previously available.
END-USERS Tell your average subscriber that they could have their very own cellular base station right in their house and their first thought is likely to be, is that level of radiation healthy? After that, theyre bound to realize how much a femtocell will improve the way they use their wireless service. In
Mobile Internet Usage: Home and Work
Work-life balance. (credit: Cisco IBSG Connected Life Market Watch 2009)
I Capacity. Voice services may dominate the revenues of most operators, but data services have gone undeniably mainstream, with operators continually competing on peak data rates and network performance. Dedicating an entire base station to the small set of users served by a femtocell (as few as four in a residential setting), then, results in per-user capacity and a user experience that simply cant be matched in the macro-cell networkassuming the broadband connection into the femtocell is fat enough to take advantage of its capacity. I Tariffs. In some cases, an operator may choose to incentivise the use of femtocells thanks to preferential tariffs. Voice calls from the femtocell might be discounted or free of charge, for an individual user or group of users. Data services might be free or discounted. Why would an operator offer these incentives? To encourage femtocell usage. Regardless, the benefit to customers (and their pocketbooks) is obvious. I Applications. In the case of special tariffs, an operator has chosen to make the femtocell more than a tool for simply improving a customers wireless coverage and capacity. They can carry the strategy forward by offering femtospecific applications applications that take advantage of the femtocells location and capacity. Examples include notification of when friends and family arrive at home, automatic content downloads when benefitting from the dedicated capacity of the femto, or mobile access into home multimedia content using the femtocell for interworking with the home network. If the applications are compelling enough, they should help to make the users life easier or
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INSIGHT REPORT
Source: Cisco VNI Mobile, Informa Media and Telecoms, In-Stat, Gartner
Smartphone Base over all Mobile Handsets
improve their service experience. I Device Diversity. Improved wireless coverage and capacity can be delivered without a femtocell thanks to shortrange wireless technologies like WiFi either at home or in the office. By leveraging standard wireless technologies, however, femtocells allow users to keep their existing handsetsbe they smartphones, voiceonly devices, featurephones, etc. OPERATORS It would be nice to believe that operators have an interest in deploying femtocells strictly because of everything they promise end-users. Like any other commercial entity, however, operators are in the business of business IE, turning a profit. Not surprisingly, then, their interest in femtocells is based on more than altruism. I Traffic Offload. At one point, several years ago, operators were struggling to drive the use of mobile data services. Today, thanks in part to the availability of inexpensive smartphones, this struggle is over. The wild success of mobile broadband, however, has given rise to new problems as the capacity of networks is increasingly taxed both at
BENEFIT
the base station and in the backhaul network. Beyond (or, more likely, alongside) the deployment of new network capacity, femtocells can push the investment burden onto end-users particularly if they pay for the femtocell itself as well as its backhaul in the form of their broadband connection. Even if operator partially or fully subsidizes the device, the savings on site, power and backhaul costs can be substantial while the concentration of spectrum resources on a limited area helps to make the most of an operators assets and best support end-user mobile broadband demands. I Customer Acquisition & Retention. Leveraging in-home base stations to deliver improved coverage and capacity may be a less expensive option than accomplishing the same feat thanks to an extension of the macro-cell network. At the same time, if the result is a less burdened macro-cell network for other users and better coverage options for out of the way or signal-challenged locations, the operator is more likely to
keep its customers happy (IE, stop them from churning away) and may be able to pick up new customers previously out of its reach. I Usage Uptake. With operators looking for ways to keep the costs of providing mobile broadband services in check, you might think that they are no longer worried with driving data usage. Instead, this is still top of mind especially as operators look for limit the cost of mobile broadband services thanks to new usage policies (tiered tariffs, usage caps, bandwidth throttling). If femtocells and femtocell applications can costeffectively introduce users to data services and multimedia applications inside the home and office, the result could be increased usage, and increased revenues, elsewhere. Outside of data services, the availability of solid voice coverage could also push users to move on fixedmobile substitution, dropping their landline services in favor of mobile voice plans.
VALUE TO OPERATOR
VALUE TO END-USER
Coverage
Improved signal strength (service availability) indoors and in hard to reach areas. Better at-home service experience for data-intensive applications.
Leverage of femtocell capacity and location information to deliver converged services. Service cost savings... ...for an individual or group of users. NA
Customer acquisition and retention. CapEx/OpEx efficiencies (macro cell RAN). Additional voice/data uptake. Customer acquisition and retention. CapEx/OpEx efficiencies (macro cell RAN). Additional voice/data uptake.
Increased mass-market femtocell and mobile broadband service attractiveness. Increased mass-market femtocell attractiveness. CapEx/OpEx efficiencies from taking RF and backhaul traffic off macro network.
Capacity
Applications Special Tariffs Traffic Offload
Device Diversity
Allows service benefits without requiring handset or device upgrades.
Allows operator to target its entire base of wireless users regardless of device type.
Benefits in kind: The opportunity of femto for operators and consumers
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INSIGHT REPORT
FEMTO 102 THE END-TO-END FEMTOCELL NETWORK

ead enough femtocell service marketing or even user reviews of femtocell services and youll eventually come upon a reference to magic. For example: plug it in and, like magic, youve got five bars of 3G coverage. For the average consumer, this reference to magic makes complete sense. As long as the delivers what the operator promises, it doesnt matter how it works. It could be advanced microelectronics, magic or a deal with the devilit just doesnt matter. To fully understand the dynamics of the femtocell industry, however, the inner workings of a femtocell, its relationship to other types of cells and how it actually delivers services as part of a larger network all need further discussion. WHAT IS A FEMTOCELL The description of a femtocell as small, low-capacity, cellular base station leveraging an operators licensed spectrum is a fair one if not necessarily a complete one. In reality, femtocells are more than simple base stations (not that anyone would ever propose that a 3G base station is simple). Costs must be kept low enough to allow end-users to buy the femtocell or, at least, make it economical for an operator to subsidise it. Capacity must be scaled down to support as few as four usersbut upwards of 16 or 32 for enterprise applications. Power output must be scaled down to avoid interfering with the macrocell network that exists outside the home or office. To ensure that femtocells can be self-installed while ensuring that interference remains a nonissue (either with the macro network or other femtocells) and handovers are supported, some degree of radio resource control must be localised driving vendors to integrate Self-Organizing and Self-Optimizing Network (SON)
technologies as well as aspects of other network assets such as the radio network controller. Breaking the femtocell apart, then, all of this accomplished thanks to a variety of components. I Baseband Silicon essentially a 3GPP NodeB modem (3GPP2 in the case of CDMA2000 femtocells), with processing power determining the user and data rate capacity of the femtocell as well as its ability to support more complex technologies (HSPA vs. HSPA+ vs. LTE). I RF Silicon integrating with the femtocells baseband, the radio component of the femtocell defines the RF spectrum and channel bandwidth it operates in, power output and control, receive sensitivity, etc. I Software protocol stacks supporting femtocell operations, including: transport protocols, security (multiple flavors), network timing and synchronization, OA&M, autoconfiguration and interference mitigation aka, SON functionality. I Other Materials everything else in the box, grouped into active components (memory, timing/clock, GPS) and passive components (case, boards, antennas). FEMTOCELL VS. PICOCELL VS. SMALL CELLS If the most cited features of a femtocell are its size, capacity and promised coverage range, this begs a few questions. What is the difference between a femtocell and a picocell? What differentiates a femtocell from a very compact macro-cell base station the socalled small cells vendors are beginning to market? Unfortunately, there is no single answer. There are, instead, a number of different features and capabilities most commonly
cited as signatures of a femtocell, with a survey of vendors in the femtocell market focused on a handful. I Capacity. Aimed at residential usage, the capacity of a femtocell (say, four users) is going to be low compared with most picocells or compact macrocell offers. In an enterprise configuration, however, femtocell capacity can reach up to 32 users and HSPA+ data rates. I Cost. Manufactured in scale, vendors are already promising femtocell price points below the $100 mark something unlikely to be matched elsewhere. I Coverage. The most commonly cited differentiator, based on the notion that femtocells are designed to keep individual node coverage on a small scale. It can even be argued that most other differentiators are derived from coverage: costs thanks to power output; capacity thanks to the need to serve fewer people; self-organsation thanks to the added complexity facing high-power, broad coverage cells. I Self-Organization. Again, a key promise of femtocells is a self-organizing architecture which allows for the simple, non-interfering deployment of thousands (millions, ideally) of base stations in a given market. As SON techniques become a standard part of all LTE offers going forward, it may be more precise to focus on the self-install and plug-and-play capabilities of femtocells. I Integration Options. Whether or not all vendors acknowledge it, femtocells integrate into an operators core differently from other base stations: the Iuh standard was created specifically for femtocells and SIP out to the base station is not yet common (but used by WCDMA operators and a critical part of CDMA2000 femtocell standards).
INSIGHT REPORT
ENTERPRISE VS. RESIDENTIAL So, what about the enterprise? The market may be buzzing with the prospect of a 3G base station in every home, but the office is just as often subject to poor coverage combined with off-the-chart capacity demands. Recall our earlier chart: in many markets mobile Internet usage at work exceeds that of usage at home! Traditional solution for enterprise wireless may include distributed antenna systems (coverage) and picocells (coverage and capacity) but femtocells are positioned as another arrow in the operators quiver with residential units serving the small-office/home-office (SOHO) markets and higher capacity offers (8, 16, 32 users) targeted at larger enterprises. Coverage is obviously an issue for larger complexes. Here, a variety of distributed architectures promising handoff across femtocells within an enterprise are aimed at delivering
seamless, enterprise-wide coverage without the broad coverage usually associated with picocells. THE NETWORK BEYOND THE FEMTO When attempting to explain what I do for a living to friends, my wife often says that I write about the boxes at the bottom of cell towers. It works because most people dont know what exists in a cellular network beyond the base stations. Yet, in the same way traditional 2G and 3G networks require a core network behind the radio access network (RAN), femtocells alone arent sufficient for the delivery of femtocell services. From backhaul to billing to integration with an operators other wireless networks (including voice support), there are a myriad of network infrastructure components involved in a femtocell network launch. A few, however, stand out as critical and/or unique to the femto space.
I Femto Gateway. The Femtocell Gateway or Home NodeB Gateway, HNB-GW serves several purposes. Where traditional 3G Radio Network Controllers are designed to support thousands of base stations, the HNBGW aggregates femtocell traffic into an operators core network thanks to standard cellular standards (Iu-cs and Iu-ps). The connection between femtocells and the gateway can vary: early implementations focused on pseudo-proprietary implementations; the WCDMA market has standardised on the so-called Iu-h interface going forward; the 3GPP2 market has focused on SIP. I Security Gateway. Leveraging a subscribers broadband connection for backhaul, femtocell services rely on what operators often call, untrusted connectivity IE, a connection that the operator doesnt control on an end-toend basis. Security gateways, then, serve the purpose of tunneling femtocell traffic securely into the operators core. I Device Management. Integrated into an operators OSS/BSS infrastructure, femtocell device management solutions support remote provisioning, software updates, configuration, management and troubleshooting. The Broadband Forums TR-069 has been adopted as a standard management protocol based on its proven operators in the DSL world.
Left: Femtocell network diagram source: Airvana
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INSIGHT REPORT
FEMTO 201 THE FEMTOCELL VENDORS

ong before people started tracking trending topics on twitter (sorry for the alliteration), a useful exercise to gauge the popularity of a topic was to simply count the number of the results that came up in a Google search. Try it with femtocell vendor and you get about 9,500 results compared with roughly 12,000 for GSM vendor and nearly 13,000 for LTE vendor. For a market that lacks the maturity of GSM or the near-universal acceptance of LTE, this might seem strange.
HOW TO EXPLAIN IT? First off, Google search results dont signify anything more than the number of times a term is used, definitely not the
Femtocells ACME Packet AirHop Airvana Airwalk Alcatel-Lucent Aricent Bitwave Continuous Computing Cisco Ericsson GENBAND Huawei Intellinet ip.access Kineto Lime Micro Mimo-on Mitsubishi NEC Node-H Nokia Siemens Percello picoChip Qualcomm
Source: Current Analysis
number of active femtocell vendors. Second, in a young market where there is money to be made and nobody can claim incumbency, its only natural for lots of companies to attach themselves to the opportunity. Finally, considering the broad array of products involved in the launch of a commercial femtocell service, it shouldnt be surprising that the market is already populated by dozens (if not thousands) of vendors. It also shouldnt be surprising that these vendors neatly fit into some clean categories tracking the various parts of a femtocell and femtocell network we identified earlier femtocells, femtocell silicon (RF and baseband), femtocell software, security and femtocell gateways along with femtoSoftware Security Integration
Controllers
Silicon
Samsung SpiderCloud Stoke Tatara TI Ubiquisys

focused system integrators who pull these pieces together into a working solution. While far from exhaustive (and not even approaching 9,500), the follow table gives a view into 30 of the players most often associated with the space and what they do in it. As with any attempt to provide a quick industry snapshot, the preceding table comes with a few caveats and exceptions. Again, the table is not exhaustivetheres only so much you can capture in a snapshot. A broad set of other firms can lay claim to a position in the femtocell market either by producing femtocell access points (like the UKs HSL or Australias Juni), testing femtocell solutions, providing additional components and/or network integration support. Even, integration support stretches beyond the major wireless network vendors to include others whove shown an interest in femtos (e.g., Motorola) and even smaller vendors tasked with network deployments. At the same time, the list leaves out all of the vendors which stand to benefit from the parts of a femtocell network that arent even particularly femtocell specific. Think OSS/BSS suppliers. Think enclosure vendors who are engaged to help turn femtocells into solutions for outdoor coverage. Think transport and backhaul vendors tasked with growing network capacity into the core. Think service layer vendors focused on advanced, femtospecific applications or more basic applications such as basic voice. Perhaps the most important constituent of the femtocell market left out of our handy table is a potential manufacturer community that stretches from todays consumer electronics and home network vendors (e.g., 2Wire, D-Link, NETGEAR, Sagem) to contract manufacturers and Original Design Manufacturers (e.g., Gemtek, Quanta, SerComm). Why leave them out, then? While obviously important, consumer electronics makers have yet to substantially move the market forward and ODMs are essentially a necessary part of any consumerfacing technology.
INSIGHT REPORT
FEMTO 202 THE FEMTOCELL OPERATORS

A TALE OF THREE COUNTRIES: FEMTOCELLS IN THE US, UK AND JAPAN.
We can compare femtocell launches based on their technology choices and momentum, but this ignores important differences in operator strategies around services and marketing. Nowhere is this better illustrated than when looking at NTT DoCoMo, Verizon Wireless, and its favorite stakeholder Vodafone. At a minimum, femtocells serve a purpose in terms of extending network coverage into hard-toreach areas. For a company like Verizon Wireless that prides itself on the strength of its network, they might seem like either a natural fit or a massive contradiction. Regardless, the Verizon femtocell story begins and ends with coverage support aimed at a small subset of its users. Femtocell pricing at $250 USD is more than double its domestic competitor Sprint and hasnt changed since the Network Extender was first launched. Femto-specific pricing plans offering unlimited voice calling are unavailable (unlike with Sprint). Marketing is nearly non-existent. Like Verizon, Vodafone has chosen to focus on coverage as the core value proposition of its femtocell offer. Theres simply no other way to interpret the message Vodafone has plastered on billboards: Only Vodafone can guarantee mobile signal in your home. Unlike Verizon, the company has continued to evolve the offer. From its original launch price of more than 150, the company now charges 50 for users on a service plan of 25 or more and has implemented provisioning upgrades to allow for self-service in terms of phone number registration, etc. DoCoMo would not deny the importance of coverage as a part of its femtocell and, just like Vodafone, its femtocell pricing is much more attractive than Verizons (device pricing below $25 USD and monthly costs around $10 with substantial discounts early on). Data services, however, have been just as much of a focus for the operator, with a second femtocell supporting higher data rates launched in late 2009, and the company noting traffic data offload as a core part of its My Area strategy. Most uniquely, however, DoCoMo has actually made content a part of its femtocell strategy, moving beyond basic coverage and capacity to entice users with multimedia content offers as well as location based notifications leveraging a users registration on the femtocell. Just as unique is the fact that DoCoMo customers must have a technician perform the femtocell install based on Japanese regulations. With a quoted lead time of more than a month for installation, the focus on applications that make a femtocell compelling beyond coverage and capacity is understandable. heres no shortage of documentation around the femtocell service launches that have taken place to date. Every new deployment commercial, trial, pilot or otherwise gets a full treatment in the media followed by an obligatory insight or two from the analyst community. With initial forecasts predicting that the market would begin to ramp as early as two or three years ago, this level of attention is completely understandable. There was no way that the market could have ever lived up to the initial hype and expectations around service timing: standards hadnt been agreed on for network integrations; operators had no proof that femtos wouldnt disrupt their macro networks; the importance of data traffic offload much less the value of femto-specific applications had barely begun to register with operators. Now, however, that operators are beginning to move forward on commercial femtocell services doesnt mean that the market has actually taken off. Consider the facts. AT&T just recently announced plans to take its service offer national and is still in the process of rolling it out. Some of these services are consumer focused and others are aimed at the enterprise directly impacting their scope. Optimus, for example, is reportedly planning for less than 1,000 units by mid-year with its business offer. Then again, SOFTBANK is focused on the consumer but has noted that its femtocell deployments still number less than 100. Not exactly what youd expect from a market thats ready to take off. At the same time, however, every market needs to start from somewhere and the expectations from these operators do give some reasons to be optimistic. DoCoMo has gone on record as planning for a million subscribers on its femtocell service by 2012. After a year or more of service, both Sprint and Verizon are happy enough with their experiences to plan for the introduction of 3G femtocells. AT&T might just recently have decided to take its service offer national but it did so after extensive testing and is rumored to be working on the selection of a second vendor. And SOFTBANK? More than a year of service might not have led to many femtocell deployments, but at the end of March the operator announced that it would begin offering its customers femtocells free of change, with registration kicking off in Maynot a bad strategy for kicking off uptake.
services, each additional service offers adds fuel to the argument that this truly is THE BREAKOUT YEAR for in-home (or, maybe, inoffice) base stations. And, with at least 10 commercial service offers in the market, the possibility that this may be THE year seems more likely than ever. Of course, just because 10 operators have moved forward on commercial femtocell
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INSIGHT REPORT
ADVANCED STUDIES THE YEAR AHEAD

e now have a solid view of todays femtocell marketplace: who supplies femtocell solutions, why operators would want them, and which operators have already been bitten by the femtocell bug. But, if we left off with the notion that 2010 could be THE BREKAOUT YEAR for femtocells and weve just passed into the second quarter, the question on everyones mind is, what does the year ahead hold for the market and what should we be looking for? TRIALS & EXPANSIONS Noted earlier, there may be 10 commercial femtocell service offers in the market, but many are still in a very early stage. It is only natural, then, that all eyes will be on these operators: AT&T as it takes its femtocell service national; Vodafone as its expands its services; SOFTBANK as it considers giving away a larger set of femtos for free; China Unicom as it brings femtocells to the worlds biggest wireless market; Sprint and Verizon Wireless as they expand their focus from 2G to 3G. Service expansions, after all, send a message to other operators that the technical and business questions around femtocells have been answeredor, at least, are in the process of being answered. And, beyond the operators who have moved forward on commercial femtocell service launches, there is a larger number of operators who have trialed the tiny home base stations but have yet to turn these investigations into actual services. [insert table ec1] The hope surrounding these trials is easy to understand. Moving operators from trials to commercial deployments grows the femtocell market, provides further proof points around the technology and could even pull new operators into the game based on
competitive pressures. Yet, just like todays femtocell service offers, the trials that have been launched are a mixed bag. Some, like KDDI are poised to turn into commercial momentum in the near term. Others, like JSC Ukrtelecom and Orascom, date back to 2007 questioning how eager these operators are to move on service launches. Some of the operators have even gone on record positioning femtocells as a tactical tool without mass market applications (TMobile) while others are being held back by regulatory issues (Chunghwa). Regardless, while brand new interest in femtocells is exciting, operators who have already launched services or trials hold the most promise for moving the market forward this year.
Vendors have continued to put femtocel applications on display at trade shows. Yet, with only one operator currently including them as a part of their service offer, it would seem that applications arent a major focus yet. So, why tag them as an important part of the femtoscape for 2010
APPLICATION DEVELOPMENT Last June, the Femto Forum launched a Special Interest Group (SIG) focused on what it titled, Services. More specifically, the Femto Services SIG is tasked with developing, a framework that will simplify the development and deployment of femtocell applications. The foundation of this framework will include a common application environment along with standard APIs
and interfaces enabling the creation of applications which are extensible beyond any one vendors product. And, to ensure that people actually care about and develop these applications, the SIG will also take on the requisite marketing responsibilities for driving an interest in (or, at least, awareness of) them. In tandem with the Femto Services SIG launch, the Forum sponsored Femtocell Applications Live at Avren Events Femtocells World Summit in London; 11 companies showed up to demonstrate their applications ranging from locationbased message delivery to podcast synching to mobile device theme changingall based on the bandwidth and presence information delivered by a a femtocell. Since then, vendors have continued to put femtocell applications on display at trade shows. Yet, with only one operator currently including them as a part of their service offer, it would seem that applications arent yet a major focus. So, why tag them as an important part of the femtoscape for 2010? Two reasons: technical progress and operator demands. Nearly a year after setting up the Services SIG, the Femto Forum has made significant progress at developing a framework to support applications. Working with vendors, it has classified the diverse femto application models: device hosted, femto hosted, HomeLAN hosted (think DLNA use cases), network hosted. On the device front, work with RCS and the GSMAs OneAPI promises to obviate the need for API work across every mobile OS. Plans for a femtocell development contest this June have been scrapped, but the rationale operator interest in moving at a measured pace and continued work with standardization is encouraging. It suggests that the industry is moving forward and that operators are beginning to pay attention,
INSIGHT REPORT
if only because network hosted femtocell applications (the initial interest) hold the promise of added revenue streams. To be fair, femtocell vendors themselves arent certain that 2010 is the year for applications. When queried as part of a survey we carried out in April, 45% of the respondents felt applications would become an integral part of service launches in the 12 to 18 month timeframe. 30% felt it would be somewhere between 18 to 24 months, and only 20% expect major momentum within the next 12 months. Including the executives and marketers driving strategy for major femtocell makers, femto and security gateway manufacturers, silicon suppliers and femtocell network integrators, you might think that this group would be optimistic rather than conservative around application timing. Regardless, even if it does take 24 months for femtocell applications to become more than a novelty, progress will need to begin this year. IUH & INTEROPERABILITY While operators may still be awaiting deeper insights into the state of femtocell application standards and development, they got some initial insights into core network integration standards this past March. Organized by the Femto Forum and ETSI, the markets first plugfest focused on femtocells was designed to test the interoperability of femtocells, femto access points and security gateways all based on vendor implementations of Iuh interfaces and IPsec/IKEv2 security protocols. More than 20 companies showed up to participate, including every major WCDMA femtocell manufacturer, femtocell integrator, Iuh-based femtocell gateway maker, and femtocell focused security gateway player. While vendors
arent allowed to announce how they performed in the testing, broad participation alone highlights the interest in making femtocell gateway interoperability a reality an interest that is 100% understandable given the way in which operators drove the creation of the Iuh standard to ensure scale and supplier diversity without having to painfully preintegrate every new femtocell vendor they hope to introduce into their network. And, while we may never know what happened at the Femto Forums recent plugfest, vendors believe that Iuh-based deployments will take place this year. Per our survey, none feel that deployments will take place within the next six months, but 70% feel they will begin within the next 12 months. Just as importantly, only 5% feel that it will take more than 18 months for Iuh to begin taking hold. Here, however, a word of caution is due. Iuh is often positioned as an important tool for enabling plug and play
interoperability between femtocells and gateways from diverse vendors. In this ideal world, operators would be able to simply add new femtocell vendors into their service offer without having to preintegrate against their Iuh-compliant femtocell gateways or their security gateways. Not surprisingly, vendors are much more divided on how long this will take. An optimistic 25% think well see this within 12 months. The biggest share (35%), however, think it will take between one to two years with 30% putting it at two to three years. Beyond Iuh, some of this delay must be attributed to a diversity of IPsec implementations and their impact on interoperability with security gateways. Residential vs. Enterprise We discussed it earlier, but its worth repeating that femtocells are not simply a residential coverage and capacity solution. They can just as well be deployed into the enterprise. This is a substantial opportunity when you consider that the concept of the enterprise is an incredibly diverse one including the small office, home office, retail venues (e.g., the corner coffee shop), warehouses, and even medium or large office complexesthink the hated cubicle farm. To be sure, larger deployments which stretch beyond the close-in range of a single femtocell might require multiple femtocells and coordination between them. Again, vendors have solutions for these deployments.
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INSIGHT REPORT
consumer femtocell offers. Regardless, innovation in the enterprise femtocell space over the past year was impressive with vendors introducing new solutions (Airvana, Alcatel-Lucent, SpiderCloud), adding femtocell-like deployment functionality into existing picocell offers (ip.access), and refining early enterprise offers in terms of added capacity and proving out femto-to-femto communications (Ubiquisys). At the same time, where operators have already launched consumer femtocell services,
many are expected to look to the enterprise as an extension or when sourcing second suppliers. MARKETING There is a very real reason Vodafones marketing campaign around the Sure Signal offer has received so much attention; this level of marketing and advertising is very rare. Just as importantly, the early success Vodafone has had in getting femtocells into the market suggests that the marketing scheme has paid off. In a market where operators routinely spend tens of millions of dollars to advertise a new mobile device, the value of marketing is clearly well known. It may not be able to turn a bad product into a good one, but marketing whether in the form of billboards and television spots, or attractive service and device pricing has a direct impact on sales. As operators, then, leveraged early commercial launches and trials to test the technical merits and capabilities of femtocells (including any potential negative impacts on the rest of their network), a general lack of marketing made sense; no operator wants millions of femtocell users on their network until they know that they can deliver a quality femtocell service experience without impacting the quality of their other (IE, non-femtocell) services. If 2010 marks the start of operator femtocell expansions, the growing importance of femtocell marketing will follow. The mix of marketing tactics will vary from market to market and operator to operator. The need for some level of marketing to get the message out, however, will be critical for any operator who wants to position femtocells as more than a niche solution for a select group of coverage and capacity challenged customers.
The rationale for targeting the enterprise is fairly straightforward. Deployment scale may pale in comparison to the residential opportunity, but businesses should be more willing to pay for solid wireless coverage and capacity based on ROI calculations flowing from increased productivity, happier customers, etc. Applications from integration with the office PBX to information pushes to customers still have a place, and if deployments into a less cost-sensitive enterprise market can help to drive scale and result in lower prices for a massmarket push, all the better. Despite the logic of the enterprise femtocell, we saw earlier that most deployments have focused on the consumer. In part, this isnt 100% accurate; any offer targeting the consumer market can easily address small office and home office demands. In part, you can blame it on equipment availability; most vendors focused their initial efforts on
If 2010 marks the start of operator femtocell expansions, the growing important of femtocell marketing will follow. The need for some level of marketing, however, will be critical for any operator who wants to position femtocells as more than a nich solution for a select group of customers.
INSIGHT REPORT
EXTRA CREDIT UNANSWERABLE QUESTIONS

e might have solid insights into the topics that will dominate the femtocell market over the next 12 months or so. However, anyone claiming to have all the answers when it comes to femtocells is either fooling themselves, or just doesnt know the right questions to ask. These questions might not be critical to deployments and femtocell momentum in the near-term, but thinking about the long-term prospects of the industry, they should be top of mind. I Iuh vs. SIP. Iuh may have gotten a major boost with the latest Femto Forum plugfest, but its not the only femtocell integration option out there. In particular, SIP was heralded as an option from the earliest days of market often linked to operator interest in IMS deployments. In the enterprise, SIP is linked to an interest in enterprise applications such as IP PBX integration. To be clear, SIP is already in use most notably with SOFTBANK and as the standard for CDMA2000 integrations. But when can we expect it to be widespread in the larger WCDMA market? A solid number of the vendors we talked with felt it would be 18 months or more before we saw widespread use of SIP either in the enterprise (42%) or home (37%). This leaves the majority thinking well see it much sooner. Though vendors are ready to support SIP, the fact that standards for SIP integrations are still a year away suggests this is optimistic or simply a function of including CDMA2000 in their thinking. I Future of Femto Development: Integrators vs. Consumer Electronics. Returning to the discussion of Iuh, the long-term vision behind the standard is one of femtocells from a variety of vendors being deployed by end-users as easily as they add in WiFi access points
from the maker of their choice. And, just like WiFi, the hope is that femtocells will, ultimately, be produced by consumer electronics players like Femto Forum members 2Wire, NETGEAR or Ciscos Linksys. This is why vendors like picoChip and Continuous Computing have developed femtocell reference designs and Ubiquisys has chosen a strategy of licensing its software: to benefit from new players seeking to enter the market. But what, then, is the role for integrators and specialist femtocell makers? In our
A solid number of the vendors we talked with felt it would be 18 months or more before we saw widespread use of SIP either in the enterprise or home. This leaves the majority thinking well see it much sooner. Though vendors are ready to support SIP, the fact that standards for SIP integrations are still a year away suggests this is optimistic.
survey, when asked who will dominate femtocell manufacture, most respondents voted with integrators and original design manufacturers 35% for each group. To some extent, the market has already borne this out: Alcatel-Lucent may support Vodafones services, but the femtos are made by Sagem; Cisco may support AT&T, but its femtos are produced by an ODM based on ip.access designs. The real question is whether or not integrators will always be intimately involved in all phases of the deployment process. To the extent that femtocells leverage an operators spectrum and back-office assets, it would seem logical and not particularly surprising that only 20% of our respondents see consumer electronics players dominating femtocell manufacture in the long-term. I Technologies: 3G vs. 4G. Operators have only begun deploying LTE networks over the past six months. Long before that, however, vendors began talking up the potential of 4G femtocells as a way to augment initial coverage, deliver the capacity users will expect from 4G, and deal with the fact that 4G spectrum allocations are often in higher (propagation-impaired) frequencies. For all of these reasons, 75% of our survey respondents felt
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INSIGHT REPORT
residential femtocells would be a critical part of LTE deployments. 85% felt small cells other than femtocells would be critical. Yet, as much as people might be certain of the connection between femtocells and LTE, the timing around LTE femtocells going commercial is much less certain. Whats more, the small cell vs. femtocell responses highlight an ambiguity between femtocells and low-capacity macrocells that isnt likely to go away anytime soon. I Enterprise: Standards vs. Operator Demand. Operators might have good reasons for attacking the enterprise femtocell opportunity. Vendors may have made enterprise femtocells an R&D priority over the past year. Service launches in the enterprise, however, could be held back by two fundamental questions. How interested are operators in the enterprise and will a lack of standards for enterprise femtocell inter-connectivity impact their interest? Having broadly failed to succeed in delivering managed mobility services into the enterprise up until now, it can be argued that the space simply isnt as attractive as the home that operators dont have the will (or know-how, or channels) to move into the enterprise. Only time will tell if they can move beyond this history. From a standards perspective, the issue is whether or not operators will demand standards for the femtocell-to-femtocell coordination that allows a larger office complex to be covered by a network of limited-coverage access points. Based on the notion that a smaller enterprise may only need a single femtocell or that a single enterprise is unlikely to move beyond one or two femtocell vendors, our survey respondents answered with a resounding, no. 85% felt that a lack of standards
Dense deployments could see devices constantly attaching to and detaching from femtos that are not their own. Femto-aware handsets could work around this. How long it will take device makers to build in this support will depend on how aggressively operators push them.
wouldnt impact the market or that standards were coming soon enough. In the long-term, however, operator interest in standards cannot be underestimated, if only to support deployment efficiencies. I Devices: Femto-agnostic vs. Femtoaware. From the outset, an ability to work with all of an operators handsets and mobile devices was a (if not THE) major selling point for femtocells; it promised an ability to target the entire user base, not just those willing to buy WiFi-enabled phones. But, what if femtocells didnt really work with all handsets out of the box? What if handsets required specific upgrades or software to be optimized for use with a
femtocell? While todays femtocell services seem to be doing just fine without any handset modifications, the notion isnt that far-fetched. Dense deployments could see devices constantly attaching to and detaching from femtos that arent their own impacting battery life and femtocell performance. Femto-aware handsets could work around this. Macro-network RF issues could drive attach-detach issues at home. Femtoaware handsets could work around this, while simplifying hand-in from the macro network. Femto-hosted applications will obviously require device support. How long it will take device makers to build in this support will depend on how aggressively operators push them. Yet, without operator movement on this front, femtocell service experiences may be negatively impacted with an obvious effect on service uptake. I Services: Self-Selling vs. Customer Demands. Operators and vendors, alike, have long acknowledged that the femtocell market suffers from a difficult demand dynamic. Femtocells deliver a greater value to operators (in terms of OpEx and CapEx efficiencies) than they do for the majority of end-users (in terms of capacity and coverage enhancements). To fully execute on the opportunity, operators will need to either make femtocells more attractive or redouble their marketing efforts. Applications address the former. Advertising and attractive pricing (or giveaways) address the latter. The correct mix and how aggressively operators are willing to move on these fronts is the question.
SPONSORED INTERVIEW
TRENDS IN THE FEMTOCELL MARKET

Q: Keith Dyer, Editor, Mobile Europe A: Anil Kohli, General Manager Femtocell Solutions, Europe, NEC
What is NEC's current role in the development of the femtocell market?
NEC has always been a leader in the femtocell market and continues to innovate on the hardware, services, applications and business case. NEC has signed major operators up for femtocell in Europe and Japan including SoftBank, SFR and Network Norway. The number of NEC femtocell access points in current use number in the tens of thousands. NEC is also leading the development of innovative femtocell solutions, working closely with our technology partners.
Is enterprise adoption of femtocells likely to be significant? And are there any likely barriers to enterprise adoption of femtocell?
A successful global femtocell market is building as we enter 2010. Throughout 2010, the industry will see more and more operators deploying residential and enterprise femtocell networks. These will deliver the value-added services and real five-bar indoor coverage that is required to access capacity-intensive applications. To date, femtocells have been largely dedicated devices attached to existing access networks. As the market develops femtocells will be integrated into residential and business gateways as a standard feature. One of the main concerns of operators has been to understand the business case. As volumes increase the overall cost of femtocell is aligning with requirements, strengthening the business case for high-performance indoor coverage. Femtocell lends itself to the enterprise very well given the types of devices that are prolific in the enterprise (dongles, smart phones etc) and the high degree of concentration of employees with those devices in buildings. They also help the operator offload their macro network and give their high-value customers a better and more elegant mobile experience.
Anil Kohli
Our report questions whether SIP still has a role to play in femtocell integration. What are your views on standards adoption in this area?
Softbank deploy an end to-end IMS (IP Multimedia System) network which has a significant footprint in Japan. In Europe SIP as a standard has been slow to catch hold but with Skype accounting for 12 per cent of all global voice traffic it is inevitable that SIP will become a major part of any future mobile network delivering rich media and voice services.
Who will come to dominate femtocell manufacture? The integrators - such as NEC - or the consumer electronics manufacturers?
Integrators like NEC are uniquely positioned to deliver a broad range of applications and professional services to femtocell operators. Hardware vendors and integrators must differentiate by marketing their strengths in technology and expertise. As a result, operators are building closer relationships with their vendors that foster environments of co-development and mutual success.
NEC Femtocell
How important will femtocells be to LTE deployment? And how important will LTE be for the femtocell market?
We believe small cells and femtocells are the key to successful LTE deployment. Not only do they save on total cost of ownership, they also give mobile operators the control to roll out small-scale or wide-scale LTE networks according to capacity demand and with minimal planning requirements. NECs small cell LTE solution, the smallest all-in-one compact LTE base station is SON (Self-Organising Network) empowered. This allows an efficient, easier and faster deployment and a much lower operation cost than previous 2G and 3G deployments.
Is your feeling that consumers will come to demand femtocells, or that operators will have to work hard to push them out into the market?
There is going to be a mixture initially but the residential market will catch up as it always does with new technology like this. In time, the high level of reliable service delivered by femtocells will become the norm for indoor coverage. Eventually, the underlying user base will start to demand that level of enabled service everywhere they go.
Mobile Europe | 27
THOUGHT LEADERSHIP
RELEASING THE INDOOR POTENTIAL OF MOBILE BROADBAND

Huawei Femtocells: Coverage, Capacity and Business Growth
e are racing into KEITH DYER: a full Mobile Broadband (MBB) Cisco of New mobile devices are Jim, society. course is represented in announced in the worlds consumer the femtocell market through its media daily; together with a seemingly endless MicroCell device, which is most notably supporting treasure femtocell service. Why do you think Cisco is AT&T's trove of increasingly refined MBB applications these announcementscarrier needs for femtocell of end well-placed to meet are building a tidal wave use interest and expectations in the convenience and deployment? availability of mobile broadband. Whether for personal or business use, subscribers no longer look at MBB as JIM TAVARES: nice-to-have, they see itabout the market because of We are very excited a most-have prerequisite we daily life. leverages so many key capabilities we have believe it asIn Huaweis view, the era is the long tradition of a company. First, there ushered in by this tsunami of global interest, to deliver carrier-grade CPEgrowth. Scientific Atlanta will experience continuous into the This willAnd accelerated by the our position within home. be of course there is introduction of new, more affordable, devices, that hasas increased data network infrastructure - as well only been consumption per user,Starent acquisition. Femtocell strengthened by the where convenience will exponentially drive rates of consumption and both plays to both segments, and our strength in sharing. Huaweis solutions are designed to allow operators to segments mean we have the potential to support cost-efficiently respond mobile profitably benefit from massive growth in the to and industry. ourImportantly,of a minimum 500 times current end-toprojection we believe we can provide the level increase in mobile traffic by 2015. Within this span of end femtocell infrastructure as one company, from the just five years, we expect at least provisioning side. radio front end to the back-end four billion mobile subscribers to be surfing best-in-class provider in wave We've partnered with a this massive broadband of data intensive use - a stunning increase is notexisting ip.access to provide the RF piece, as that over a MBB subscribers. traditional solution area for us. Of course, everyone tends to think about therefore representsthe Mobile Broadband the radio side, but considerable opportunity for operators. But, as ever, opportunity is provisioning side will impact as well. Unless consumer never withoutof femtocells is zero touchcoverage and deployment its challenges: enhanced then there's QoSway carriers cancost-effectivewe have the no when indoors, scale - and networks with adequate capacity, easethe introducing new services experience to provide of whole integrated and added revenue streams, these are just a few of the provisioning process. questions operators would like to see answered. KEITH DYER: Huawei has responded to operator challenges the SingleRAN@Broad solution. Announcedimportant will You mention deployment, but how at MobileWorld Congress in February of of femtocells be for carriers, ongoing management this year, the first entire value chain solution for our fast emerging broadband world once they have thousands of femtocells deployed? has the potential to make tremendous traffic both possible and profitable. JIM TAVARES: That's exceptionally important. To take one delivery By affording enhanced coverage, expanded capacity and the USA you have got to have integrated example, in added service delivery residences and enterprises, Femtocells play a key role in this also GPS to meet e911 requirements, and carriers integrated solution. Ascells are because they may want need to know where a result, Femtocells offer operators the opportunity or growth certain locations, to radiate on certain frequencies in and added competitiveness. avoid interference with other femto or or take steps to In SingleRAN@Broad, this is represented by an end-to-end uBro solutionyou also macro cells. So that means as well as GPS encompassing a Home Femtocell as well as a Pico need an integrated network listening capability to Femtocell serviced by by determining its interactions know where a cell is its uBro Network and connected in turn to a mobile operators Core Network.
WHY FEMTOCELLS? OFFERING COVERAGE

It is well known that, principally due to the restraints of in-building penetration, high traffic bandwidth has been conventionally difficult to provide from Outdoor Macro. Considering MBB is mainly consumed indoors, operators need a cost-effective solution to cover those indoor areas which do not currently inhibit or even prohibit consistent user friendly MBB experiences. Femtocells are the ideal tool for expediting a solution; providing 100% continuous coverage and full bit-rate. As an example of Huaweis many commercial deployments, a profiled operator has managed to overcome building challenges while improving user experience thanks to a 25dB increase in signal level.
DELIVERING CAPACITY
For continuity of existing mobile networks and reuse of legacy networks, a traditional operator approach to sustaining MBB services is through standard Macro Deployment. In this manner, capacity is added by: improving technologies, e.g. HSPA+/LTE, adding new or refarming existing spectrum, 2.6GHz/900, or introducing new sites. The later creates almost insurmountable difficulties when attempted in dense urban areas. Taking into account the indoor venues for the potential 500 times traffic increase in just five years, Huawei has introduced a multi cloud layer as part of the SingleRAN@Broad solution. In this scenario Femtocells are used to offload Macro networks, ensuring an enhanced MBB experience while making it expanded coverage affordable and ultimately, profitable. The ease of Huawei Femtocells installation combined with a fully proven commercial Plug & Play selfconfiguring solution; adapted portfolio; differentiated Home and Pico offerings supported through a shared infrastructure, together with a reduction of OPEX, energy and transport in particular, are now key drivers for Femtocells affording operators considerable cost advantage when compared with traditional Macro Network solutions This cost advantage increases exponentially with the amount of data to be carried. According to Huaweis calculations, Femtocells can offer at least a 50% reduction in the cost per Mb. Actual benefit will vary according to traffic, penetration and macro network
The ease of Huawei Femtocells installation combined with a fully proven commercial Plug & Play self-configuring solution; adapted portfolio; differentiated Home and Pico offerings supported through a shared infrastructure ... are now key drivers for Femtocells
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THOUGHT LEADERSHIP
status. Huawei has developed an in-house business case tool specifically to assist operators in understanding Femto benefits.
Challenges: Providing Comprehensive Capacity
ENABLING GROWTH
With localized coverage reinforced by Femtocell locking features as well as Femtocell integration into Home/Enterprise network, it is now possible to enable growth by introducing news services through Femtocells such as automatic content synchronization, mobile advertisement based on location, mobile monitoring, PBX or VPN features,
WHY HUAWEI? COMPLETE SOLUTION

Huaweis end-to-end uBro solution has been custom designed to serve Home Zones as well as Pico Zones through its uBro Network. Thanks to Huaweis Femtocell portfolio, operators have the choice to select the best product for both Home Zone and Enterprise Zone according to varying specific environment requirements. Selection is made according to:
Home AP UAP2105 ~30m 4 Yes Yes Simplified Automatic Pico AP ePico3801 ~100m 16 Yes Yes Powerful Monitoring Automatic and Manual(Offline)
SERVICE SERVICE FEATURES FEATURES OPERATION OPERATION
Coverage Users Full Mobility Plug & Play Performance Configuration
readiness. Technical issues, such as interference with existing Macro Network, management interfaces, or Femto standard readiness; and business concerns, such as value with regards to WiFi, and overall costs, are among the top concerns. From a technical point of view, Huaweis uBro solution is completely ready for commercial deployment today. We have developed several proven effective tools and strategies to effectively resolve any potential Macro Network interference. These include Femto Pilot Power Auto-Management, Mobility Management, and UE Transmission Power Management. As demonstrated by our participation in the Femto Forum PlugFest, Huaweis uBro system is ready for 3GPP Iuh standards. Last but not least, in order to make sure that management interfaces are open and easily integrated with existing Back Office Support Systems (BOSS), Huaweis uBro management solution supports open protocols such as TR069 or SOAP. From a business point of view, Huawei is ready today to help operators better understand target market segments and Femtocell cost savings as highlighted previously in this article. In our view and with particular relevance for smartphones, since Femtocells support all 3G devices and simplify their utilization, Femtocells will coexist with WiFi and will target different utilization patterns.
IN SUMMARY
At the start of this new decade, after several years of study and technical development, Femtocells are finally becoming main stream. As of the date of this article, the industry has seen no less than ten commercial Femtocell services deployed, three of which have been expedited by Huawei. While mainly employed for coverage, Femtos also have the potential to become excellent tools for capacity absorption and enablers of new services and added revenue streams. With proven Fentocell solutions well in-hand, Huawei is completely ready to help operators expand mobile broadband coverage and enhance capacity growth.
Several other product mixes can be offered based on these basic components in order to simplify Femtocell installation and integration in different deployment environments.
READY TO MARKET
There are still many operators, analysis and other industry stakeholders who have doubts or questions regarding Femtocell technology and business case
Mobile Europe | 29
SPONSORED INTERVIEW
A TECHNOLOGY WHOSE TIME HAS COME

Jim Tavares is Director for Strategy & Business Development in Cisco Services. Keith Dyer asks him for his views on the development of the femtocell market.
KEITH DYER:
Jim, Cisco of course is represented in the femtocell market through its MicroCell device, which is most notably supporting AT&T's femtocell service. Why do you think Cisco is well-placed to meet carrier needs for femtocell deployment? macrocells, element management is fundamentally different from supporting tens or hundreds of thousands of femtocells. You still have all the complexity of a 3G macrocell but the scale is one to two orders of magnitude larger. The problem carriers need to solve is to have one platform managing all of this. Once again this plays to our heritage of supporting tens of millions of carrier class CPE devices.
JIM TAVARES:
We are very excited about the market because we believe it leverages so many key capabilities we have as a company. First, there is the long tradition of Scientific Atlanta to deliver carrier-grade CPE into the home. And of course there is our position within network infrastructure - that has only been strengthened by the Starent acquisition. Femtocell plays to both segments, and our strength in both segments mean we have the potential to support massive growth in the mobile industry. Importantly, we believe we can provide the end-toend femtocell infrastructure as one company, from the radio front end to the back-end provisioning side. We've partnered with a best-in-class provider in ip.access to provide the RF piece, as that is not a traditional solution area for us. Of course, everyone tends to think about the radio side, but the provisioning side will impact as well. Unless consumer deployment of femtocells is zero touch then there's no way carriers can scale - and we have the experience to provide the whole integrated provisioning process.
KEITH DYER:
Does the adoption of the TR69 standard not address the management issue, putting femtocells onto the same footing as other in-home broadband access devices?
JIM TAVARES:
TR69 is really a framework there's a whole lot on top of that to implement if you want to really be zero touch. The standards are really nascent, so that leaves a lot of work to do as a vendor to make sure you can deliver a truly zero touch deployment approach scale. But I should add that I think the adoption of standards is of course positive, and both Cisco and Starent have been leaders in standardization. For example Cisco was an active member in the DSL Forum - now Broadband Forum - Working Group that developed TR-069.
Ciscos MicroCell product supports AT&Ts femtocell rollout
KEITH DYER:
You mention deployment, but how important will ongoing management of femtocells be for carriers, once they have thousands of femtocells deployed?
KEITH DYER: JIM TAVARES:

That's exceptionally important. To take one example, in the USA you have got to have integrated GPS to meet e911 requirements, and carriers also need to know where cells are because they may want to radiate on certain frequencies in certain locations, or take steps to avoid interference with other femto or macro cells. So that means as well as GPS you also need an integrated network listening capability to know where a cell is by determining its interactions with the cells around it. Customers may also selfreport where the femto is when they buy the cell. So you have to adjudicate between all that data, and that's hard work. When you are a carrier deploying thousands of What other issues do you think operators face in developing the femtocell market?
JIM TAVARES:
I would mention two areas. The first is that as with any new service or technology, there's an education issue. WiFi took a while for consumers to understand what it really was and what it meant. So you've got a similar learning curve with femtocell for consumers, as well as your retail staff in stores or customer support agents on the phone. Another factor carriers need to be very clear about is that femtocell is challenging typical carrier business models. Carriers are used to subsidising CPE for marketing reasons - not in order to generate
30 | Mobile Europe
SPONSORED INTERVIEW
capex reductions by driving traffic off network. So the return on that subsidy is driven by different metrics from their usual model. That leads to another issue, which is that femtocell crosses classes of organisational structure within a carrier. It touches the operations team, marketing and monitoring and assurance, as well as customer service and retail. That's a new paradigm to get their head around. But I would also like to say that I actually think there has been great progress in many of these and other key areas. Most importantly, there is a clear supply chain forming - from chipset providers to radio software providers and end-to-end system providers. With any new supply chain it takes a while for every piece at every level to drop into place, and you will get inevitable interoperability issues, but there's been great progress.
KEITH DYER:
How about issues around price? There was a feeling that vendors would have to hit a certain price point in order for femtocell to be viable.
that traditional view of how to build network to support that lifestyle need is becoming a problem. In Europe, for example, UMTS is at 2.4GHz and home construction is often of cement and steel. So the RF propagation is not what it is in 2G. Another example is that the whole busy hour on a network is changing. It's moving back later into the evening, as people come home and then use their phone at We are very bullish for one simple reason. home to use high Most carriers are seeing geometric growth in bandwidth the wireless data on their networks. Because applications. That means people the physics isnt going to change, we think its are not getting the going to force carriers to look at smaller and experience they have smaller cells - with femtocells being the ideal come to expect and demand as the technology. So this isnt going to be niche. networks are not optimised to those times and locations. Usage is being driven into the home, and into different times of the day, and that's driving femtocell as an option to support that need.
JIM TAVARES:
I understand that this is a nascent market and not yet all that sophisticated, so price is something people can get their hands on initially. But over time, attention will turn to the benefits of being able to operate at large scale, with reliable, zero touch deployment. If I save $5 on a component in order to meet some arbitrary price point, but then have to spend $50 on support calls - then have I saved any money? I also think price is impacted by operators' own priorities around aesthetics, and physical integration. Some carriers are very interested in aesthetics, as this is an item that will be going into people's homes. Others are thinking about how to combine a WiFi access point and router with a femtocell. Every carrier is very different and you have to take that into account as well.
KEITH DYER:
So you are very positive about the future for femtocell?
JIM TAVARES:
We are very bullish for one simple reason. Most carriers are seeing geometric growth in terms of their wireless data on the network. They're seeing 100-200% growth annually, and if it keeps growing at that rate then the only way carriers can get more throughput is by adding cell sites. But if they take a more hierarchical approach then small cells can handle a lot of that traffic. So I think we will see macro for ubiquity and small sites for throughput; and because the physics isn't going to change, and carriers aren't going to acquire more spectrum, we think it's going to force carriers to look at smaller and smaller cell with femtocell being the ideal technology. So this isn't going to be niche - it's absolutely in line with carriers' spectrum reuse and cost reduction programmes. We are very excited and interested to see how much this evolves over time. We are already seeing some different business models and we think that's great. That's the true proof of it - let the market decide.
ABOUT JIM TAVARES: Jim Tavares has over 20 years experience in the mobility market, and has worked in a variety of product marketing and management roles, supporting IMS, VoIP, Security, and 3G/4G mobile internet infrastructure.
KEITH DYER:
Stepping away from operator concerns - what do you think will drive consumer adoption of femtocells?
JIM TAVARES:
I think it's simply a fact that wireless and mobility is so much more important than it was a few years ago to how people live their lives. What we're finding is
Mobile Europe | 31
Technology development
VOICING THE FUTURE OF LTE

Dan Warren, Director of Technology, GSMA, tells the story of how the industry developed the will to form the common standard to carry voice over LTE.
ou may have heard of the VoLTE initiative, and may even be aware that it is a GSMA-led programme to define a common way to carry voice over LTE using an IMS. But how did the industry arrive at this level of co-operation, what is the difference between VoLTE, CSFB, VoLGA, GAN, CSoPS (and other abbreviations), and why is it now important to have a common approach to voice over LTE? Dan Warren, Director of Technology, GSMA, gives his view of how the future of voice over LTE was, and is being, defined. In 2010, we will get a much clearer idea of the potential of Long-Term Evolution (LTE) networks to deliver fast mobile data services to large numbers of people. The world's first commercial LTE networks were launched recently in Sweden and Norway by TeliaSonera, with Verizon Wireless in the US, NTT DoCoMo in Japan and China Telecom set to follow suit this year. But while we all get excited about what LTE The next generation will mean for apps, augmented reality, social of voice? networking, video-on-demand, Internet browsing and many other multimedia services, we shouldn't forget that voice services still generate close to three-quarters of operators' revenues worldwide. Soaring demand for the menagerie of multimedia services may be driving the testing and deployment Instead of an explicit statement of what should of LTE networks in replace the circuit-switched domain for voice, there Europe and elsewhere, but it was just an implicit assumption that operators is crucial that would provide voice services using an IMS and the voice services related MMtel standard. But when MMtel was aren't an afterthought. Not conceived many operators were lukewarm... only do LTE networks need to support high-quality voice calls, it is also vital that the operators running these LTE networks implement voice services in a consistent way, as they did with GSM. A consistent approach to implementing voice services, together with the coordinated allocation of spectrum, has underpinned the extraordinary success of GSM both in Europe and worldwide. GSM and related technologies, such as HSPA, thrive because manufacturers can produce mobile phones that will work in many different countries, enabling them to achieve the scale necessary to create a very broad range of models at very low cost. Moreover, people
with GSM phones remain contactable all over the planet because more than 700 mobile operators in more than 200 countries and territories have all implemented voice services in a consistent manner.
GOING OUTSIDE THE STANDARDS

But this fundamental principle seemed to have been forgotten, at least temporarily, when it came to defining a voice implementation for LTE. When LTE was first conceived one of the early decisions taken by the standards body 3GPP was that LTE would be the first technology in the GSM family not to support circuit-switched connections. That decision is easy to understand: a single IP-based transport system is key to ensuring that LTE networks are efficient enough to carry large volumes of traffic cost-effectively. Unfortunately, that decision also left a vacuum. Instead of an explicit statement of what should replace the circuit-switched domain for voice, there was just an implicit assumption that operators would provide voice services using an IP Multimedia Subsystem (IMS) and the related Multimedia Telephony Service (MMtel) standard - a framework within which specific applications for person-toperson communication, including voice services, could be defined. But when MMtel was conceived in 2006, many operators were lukewarm in their support for IMS and there was some pressure to define an alternative means of implementing voice services on LTE networks. So,
34 | Mobile Europe
Technology development
But the emergence of these different solutions raised some uncomfortable questions. Wouldnt these migratory solutions end up being used for a long time? In the meantime, the cherished GSM principle of interoperability might be jeopardised. After considering such issues, 3GPP halted the CS over PS work.
3GPP began to define a circuit switched fall back (CSFB) approach as an interim' or migratory' solution, which operators could use until they were ready to adopt IMS. Unfortunately, this compromise also opened the door to other approaches and further fragmentation ensued. 3GPP also began to study a further interim or migratory approach, known as circuit-switched over packetswitched system (CS over PS). But the emergence of these different solutions raised some uncomfortable questions. Wouldn't these "migratory" solutions end up being used for a long time? (A mobile network needs to support a migratory solution as long as there are handsets in circulation that only support that solution.) In the meantime, the cherished GSM principle of interoperability might be jeopardised. Could a CSFB device roam on a CS over PS network, or vice versa? Could either roam on an IMS network? After considering such issues, 3GPP halted the CS over PS work. But soon afterwards the VoLGA Forum was established to continue the definition of CS over PS outside of 3GPP, and to support the provision of voice over LTE using the GAN (Generic Access Network) standard.
Dan Warren
GETTING BACK ON THE IMS TRACK

Meanwhile, the industry still lacked a clear target for the IMS-based implementation that everyone now accepted would be the end goal. So, the One Voice group was formed to flesh out an IMS-based solution. The work of that group has now become the basis of the GSMA's Voice over LTE initiative (VoLTE), which is aiming to accelerate the launch of IMS-based voice services, curtailing the period in which migratory solutions will be needed. IMS has many merits: it can support all standard voice call service features such as call waiting, call hold and call barring, and is capable of serving large numbers of subscribers. IMS can also be used to integrate voice calls with enhanced, rich features such as presence, instant messaging and video content, across networks run by different mobile operators. Here at the GSMA, we are coordinating the development of the specifications that will enable
interconnection and international roaming between LTE networks with the goal of completing that work by the first quarter of next year. The GSMA is also working with mobile operators to ensure that LTE spectrum is aligned internationally, as far as possible, and that the VoLTE solution will also be fully-compatible with voice services offered by fixedline operators. The VoLTE initiative has the backing of more than 40 organisations from across the mobile ecosystem, including many of the world's leading mobile operators, handset manufacturers and equipment vendors. The European mobile operators supporting the initiative include 3 Group, Deutsche Telekom/TMobile, mobilkom austria, Orange, Telecom Italia, Telefnica, Telenor, TeliaSonera and Vodafone. These operators recognise the importance of maintaining the high level of global interconnection and roaming inherent in today's 2G and 3G networks. Telefonica CTO Vicente San Miguel, for example, said in February that his company "strongly supports this initiative to drive a common voice and messaging solution for the mobile industry, as it is a key enabler for the success of LTE." With this level of support for VoLTE, the mobile industry should be able to ensure that the interoperability and global reach that characterises GSM-based voice services continues in an all-IP world. High-quality voice services that work everywhere are fundamental to the mobile industry's raison d'tre and we mustn't forget that.
TeliaSoneras commercial LTE launch was Europes first
Mobile Europe | 35
The Operators Business
OPENING UP A NEW VALUE CHAIN

A network operators life is never an easy one. New subscriber adoption rates are down, but the existing subscribers hunger for costly-to-deliver data services is up. Margins go down, yet the pressure from regulators on policing these margins goes up. And while the expected infrastructure costs required to support emerging data services keep rising, so the customers willingness to pay for these services just falls. Who, then, would be a network operator, asks Frazer Bennett?
ommentators have observed for some time that the traditional business model through which network operators have demonstrated past success is unlikely to sustain them in the future. Although long aware that value-added services must be embraced to derive value from their precious, and costly network, operators have remained perplexed, turn-on-turn, by the emerging models that internet companies, and more recently emergent handset vendors, have created to realise such services. Prompted by these and many other pressures, a new value-chain for mobile is emerging. And, despite what many may say, we believe that this new value-chain represents great opportunity for the incumbent network operators to realise new sources of value. If they get it right, they can win hands-down. But the combination of having to deal with existing operational pressures, whilst embracing ongoing change leaves network operators with questions about focus. Where should they focus their energies?
TWO KEY INSIGHTS We offer a couple of insights into two areas that must be at the forefront of an operators thinking as this new value-chain emerges (at the forefront of its thinking, yes, but also at the forefront of its planning, and its actions). First, options for the network operators cost model continue to change and must continue to be considered. Outsourcing and/or sharing of network services should make the prospect of adopting new infrastructure more palatable should help to control costs. But finding the most effective approach is not that simple. Second, the new value-chain sees the consumer placed right at the centre - at the centre and expecting more freedom, not shepherded or shielded by any one party and particularly not the network operator. Many expect that this central positioning of the consumer will be rewarded by a much greater amount of their spend being on, or through, the mobile platform. But how can the operator capture this value
36 | Mobile Europe
THE NEW COST MODEL The days when a business could compete based on its facilities its tangible infrastructure are gone. Infrastructure is not a direct revenue generator and is no longer a customer attractor. This comes as no surprise. The histories of the provision of many essential services electricity, gas, even roads have followed a similar path. What starts as a unique differentiator, an almost monopolistic asset, becomes as a result of both innovation and regulation a very costly component of a heavily service-centred industry. But infrastructure is an asset that can be shared. A variety of operating models have emerged to enable network operators to exploit, and drive greater efficiency out of, this infrastructure through sharing or outsourcing in one form or other. For a typical network operator, infrastructure and operations IT costs represent 45% of operating expense and 75% of capital expense. So the potential cost savings are sizeable. Its no surprise that network outsourcing and network sharing have become commonplace. But the decision about whether a network operator should outsource or not, and the appropriate outsourcing model it should employ, remains a complex one. From site-sharing to RAN sharing, through real-estate outsourcing to full operational service outsourcing, the spectrum of options demands careful, and ongoing analysis. The trick is to find balance across cost saving and risk whilst focusing on competitive positioning. There is no one-size-fits-all. Technology changes also impact outsourcing decisions.
The level of control exerted by mobile operators rankles with, and exasperates, the content providers [In] an environment not necessarily conducive to the introduction and mass-adoption of innovative mobile servicesoperators are, after all, mobile specialists and not content specialists
Level 1
Level 2
Level 3
Level 4
THIRD-PARTY APPLICATIONS?
only as licensed by operator.
core components (search, advertising, gaming) available through third parties. Revenue share
limited, or none. operator controlled
open applications web-based.
External applications store. Operator or vendor controlled third-party apps.
AFTER-MARKET APPLICATIONS?
limited, or none. operator controlled.
through web access, but limited native apps.
plenty - open market place.
WEB ACCESS?
walled garden
walled garden
full
full
The advent of the all-IP RAN, and the rise of the femtocell (and indeed the potential need for much smaller femtolike cells to meet future data-service-level requirements) are two examples here. Operators are looking to these technologies to drive down operating costs over all, and in particular to make the provision of higher quality datacentric services more cost-effective. In their infancy, should innovations like these be managed internally by the network operator, or can they be trusted to thirdparties to exploit them as much as possible? Novel infrastructure architectures encouraged by the all-IP RAN should make inter-changeability of infrastructure components more straightforward. Further, they should enable an easier translation of internetcentred content onto mobile infrastructure. But, once again, is this something that needs to be driven from the core service-offering of an operator, or can it be left to third-party service providers to manage? Once again, there is no rule book and no standard formula here. EMBRACE OPENNESS RAN sharing and network outsourcing make it possible for network operators to focus on the thing that they need to do best - the thing that demands their focus more than any other. Our second observation on focus for network operators in the new value chain is the need to be engaging, enchanting and to keep the customer. The need to keep happy customers is hardly an insight in itself, and certainly not something that arises as a novelty in a transforming value chain. But when we consider how customers expectations of the mobile network have changed - and they have changed much faster than the network operators ability to meet them we can see that a new approach is necessary. A new approach is both necessary and, we believe, possible. CONTROL As has been widely observed, network operators were traditionally afraid of the loss of control that new service models and open platforms might cause. This
USERGENERATED CONTENT?
none
limited, or none. upload through walled garden.
plenty through full web access.
plenty through full web access.
OPERATOR DEVELOPS API FOR THIRDPARTY DEVELOPERS?
none
none
none
yes
HAPPINESS LEVEL
none. frustration
limited. mostly frustration.
hapiness
unbounded joy.
The four levels of openness in network operators applications strategy
is the so-called dumb pipe threat the fear that a network operators value proposition might erode to being one of mere bit provision. The mid-1990s saw an explosion of fledgling Internet companies all born with free bit-provision underneath them. The network was an assumed, and essentially free, resource. The challenge for these new companies was to devise monetization models for any service offering or application that they might come up with to ride over that network. Mobile network operators, on the other hand, had a well tested monetization model from the outset. However, this model presumed, and indeed required, a great degree of control over the end customer. Control over applications, content, and delivery model. Today it is exactly this control which has been, and we believe must be, eroded for network operators to capture most value. Early ventures into openness, relinquishing the fist of control, resulted in frustration and, largely, failure. Open access meant walled gardens, operator-selected applications enabling third parties to have a relationship directly with the operator, but not with the customer. This lead to considerable frustration all round. As Juniper Research observed in 2008: the level of control exerted
Mobile Europe | 37

by mobile operators rankles with, and exasperates, the content providers (In) an environment not necessarily conducive to the introduction and mass-adoption of innovative mobile servicesoperators are, after all, mobile specialists and not content specialists. But the dumb-pipe fear is unfounded. This pipe has never been the most valuable asset that the network operator owns. Rather, it is the relationship with the customer that matters most. No wonder that it is this asset that has been under attack from handset vendors and, increasing, software vendors in recent years. They too prize it greatly. And heres the surprise. In order to keep this most valuable of assets, in order to extract most value from it, the network operator should open up the customer relationship as widely as possible - open it to providers of new services, applications, and indeed platforms. We believe this openness can be brought about without fear of loss of control, without fear of loss of income. FOUR LEVELS OF OPENNESS To help clarify what openness means in this context, consider this simple model. We introduce four levels of openness that a network operator could adopt in his relationship with customers and third-party content/application providers. In the first level, doing it all ourselves, a completely closed world is presented one in which the network operator is sole arbiter of the content that the consumer can reach. Original mobile data access models were like this, and the ill-fated walled garden approach is one such example. In reality, the network operator is giving up no control, and there is no openness here. At the second level, operators can choose to license out certain aspects of the user experience to be under the control of third parties. Search, and perhaps advertising or gaming-platforms, are examples here. In the case of search, customers have certain expectations of search brand that might have in fact forced operators to open up this experience. Operating at this level, operators have generated licensing revenue and the customers choice has been restricted only in a small number of areas, but restricted it remains. The third level sees the connection with the customer being opened up, unrestricted, to web-based services through a browser. Third-parties are no longer obliged to have a relationship with the operator, and can engage directly in the provision of such services. With the exception of appstore models (which we touch on next) this is arguably the current state of things, and the one that customers are accustomed to through their use of wireline internet connections. It is understandable that it is this third level that has left network operators fearful of contracting dumb-pipe syndrome. But its the fourth level that will liberate them. Its the fourth level that will enable network operators and content providers alike to capture value from the relationship with the customer. This level of openness
38 | Mobile Europe
acknowledges the additional value that the network operator holds in the relationship with the customer through the information it holds - all manner of information about usage, address book, history, location, service level, all manner of second-order data about user behaviour. By opening up this information and providing a service delivery platform through which third parties can exploit and reach the customer with services built around it, network operators make themselves more attractive to third-party providers and customers alike. The fourth level entails the network operator identifying, capturing and exploiting the real value that they carry because of their unique relationship with the customer. Why would this help network operators succeed in capturing more value? And how does this help them to retain customers? First, note that opening up information of this kind will enable new services and applications to be developed. Network operators cant determine what will succeed a priori, nor should they try to. In an open world, the customer will be able to determine which are valuable and which arent. By opening service and application delivery up, and by augmenting application content with operator-derived data, the developers and customers themselves will determine whats valuable and whats not. Innovation is about creating an environment in which others can innovate, and sharing the reward with them. Second, only an open world of this kind will enable the customers themselves to create the value. Value is the stuff that customers leave behind. In a closed world there is little scope for customers to do this, but in an open world the options are much greater. Think of the value that Amazon holds through its 9 million book reviews and more than 200 million book ratings. All left by customers. So, too, the three billion photos that are hosted by Flickr. Given the chance, customers will create their own value, leave it behind, and be very likely to return to it. CONCLUSIONS As technology changes, regulatory pressure and customer expectation forces change across the value chain. We can be sure that things will not stand still. But with such an historically strong position, and the allimportant direct relationship with the customer, network operators can undoubtedly turn such change to their advantage. Controlling cost through judicious use of network sharing, and service outsourcing, must be consistent with a broader strategy. But when effective, the 45% operating costs of maintaining infrastructure can be kept in check. But the most valuable asset is the direct relationship with the customer, and as internet models have shown, openness is what will strengthen this relationship and create more value for operators and third-parties in the future. Being open in the service delivery model, and encouraging innovation by opening APIs, will attract both developers and customers and keep them hooked.
ABOUT THE AUTHOR Frazer Bennett is a Consultant in Communication and Electronic Systems, PA Consulting Group. www.paconsulting.com He can be contacted via tel +44 (0)1763 267492 or email: innovation@paconsulting.com
Sponsored Interview
LEADING THE WAY IN SERVICE DELIVERY

When Huawei won the GSM Associations Global Mobile Award for best Service Delivery Platform (SDP) it was validation and confirmation of the companys leading presence in the SDP sector. Keith Dyer hears from Lance Lin, Vice President of Huawei Software, how Huaweis approach to SDP development is helping the telecoms industry succeed in overcoming the challenges it faces today.
KEITH DYER:
Mr Lin, perhaps we can start with your assessment of Huaweis position in the SDP sector today, given your recent award for best SDP at the Mobile World Congress in Barcelona this year.
LANCE LIN:
Yes, at Mobile World Congress this year in Barcelona we were honored with a very great award. We were selected as the best SDP. This was the first time for Huawei, and also the first time for a Chinese company to win this award. We take it as one of the biggest awards in the world so we are really proud of that. As for our position in SDP, first it is important for us to realize that the scope of SDP is wide, and the concept is a little bit more complicated than other solutions. So although there are some analyst statistics that place us as number two in the SDP market share, we really believe that in the telco market, and especially in the internet data market, we are number one. We have several leading operator references, including the deployment of a 13 country SDP for Telefonica Latam, and all the affiliations of America Movil in 17 countries. By the end of 2009, Huawei SDP has been selected by more than 120 operators worldwide, and in the oversea market we have already entered into deployments with three Tier One operators, Vodafone, Telefonica and America Movil, and in China we have two, China Mobile and China Unicom, all of this have proven that Huawei SDP is a leading business solution and really help operators to be successful.
Lance Lin
KD:
What are the areas of operation that your SDP solutions cover?
LL:
Huawei SDP focus on customers, very much. we partner with operators to design their service strategy, Advance Innovation Center, and with flexible business revenue share models. We have ONE-SDP framework, we see the different requirements from different operators in different markets, we realize different strategy in flexible combinations. We segment Huawei SDP into 3 major sub-solutions: First, SDP Openness, which focus on network exposure
and integration with mobile internet capabilities, buildup service ecosystem and bring with possibility of creating millions of mobile internet services. Secondly, SDP Media provides both in-house and 3rdparty content and media management, supporting indepth operation and bring with convergent experience of content and media services. Thirdly, SDP WebGate, specially designed for mobile internet and provide differentiate content and service charging, precise marketing, promote controllability of the mobile internet services. We also see another stream of requirements from international operators like Vodafone and Telefonica who are keen to carry our their global strategies and share resources and knowledge in successful
Mobile Europe | 39
Sponsored Interview
services among its subsidiaries, which is called multinational SDP solution. To make all this happen, an SDP developed as a concept from service open environment is needed, gateways like MMS and SMS gateways, so it has mainly been regarded as only related to and this is the key point that internet data services. But in our definition Huawei SDP focuses on and we believe that the SDP framework needs to addresses cover not only data but also voice and video. So, for example, we use our SDP framework to contain even IPTV service development. So this is our inventory: we cover voice, data and video. Also, if you look vertically within SDP then based on a number of network enablers and integration with IT networks, we can support a wide range of applications and solutions. We break this area of applications support into three areas - applications facing the individual, home and enterprise user. Above this applications enablement, there is also demand for integration and managed services, and we think all of this falls into the big concept of the SDP as well. Our service will cover them all, but what is also important is that we are open to partners. For example, we currently partner with Accenture within the services space, and for applications we also have our open community plan. We have over 300 partners which are already certified and are able to develop applications for our SDP. Additionally, through our co-operation with Telefonica in Latin America we have jointly authorized a host of other developers.
provisioning, so we are strong within all these kinds of business - covering both IT and CT. From the business perspective, the capability of our applications offering is another focus. SDP should not just about a technical platform, nowadays nobody would like to take so much risk to launch an unknown platform without seeing the future. End to end professional services and value chain cooperation are the necessary considerations for a SDP. As mentioned above, Huawei SDP is an end to end business solution taking in all the considerations of operators. It has been proven as a really helpful and successful solution for oeprators business transformation. This is also another reason we won the awards.
KD:
The GSMA award gives you enhanced presence in the market, do you think you already had good recognition in this market?
LL:
Yes, Huawei SDP has been quite successful in the past few years, which has been selected by more than 120 operators over 100 countries worldwide, including the 5biggest mobile operators, Vodafone, Telefonica, America Movil, China Mobile and China Unicom, and we have successful delivered the world-first and largest multinational SDP for Telefonica covering 13 countries in LATAM. These are all the good recognition in this market, and we believe that more and more presence will be in the near future.
KD:
Do you think this combination of the scope of your operations and your openness to partnership is key to your success with SDP, and in winning the GSMA award?
KD:
Operators are facing an increasingly competitive situation. What do you think is the best way operators can build out new services into the market?
LL:
According to Rob Conway, CEO of the Board, GSMA, Aremarkable 500 entries from across the global mobile ecosystem were submitted this year, all of an extremely high caliber, and the winners should be incredibly proud of their achievement. Huawei SDP is a real end to end business solution designed in advance technologies which enable the business success of operators that is the major reason why we could win this award. From the technical perspective, I believe that one of the key points for a SDP should be the integration capability with legacy network components. Covering both communications technology (CT) and the IT world. This is a core strength for us because I believe we are very strong in systems integration. Importantly, we have quite a broad product line covering almost all the common VAS components and products. For example in services we have SMS, MMS, and WAP gateways, as well as support for services such as ringback tones. Then in the IT sphere, we have strong capabilities in billing, CRM, mediation and
LL:
As terminal vendors and internet companies are also offering so many services and applications through their app stores there is a risk for the operator in controlling the value chain, so operators need to think of a business transformation from being a dumb-pipe to be a smart channel, cooperating with the whole ecosystem to facilitate open service innovation with a faster time to market and lower capex and opex. Sales of high end mobile phones are growing, so the demand for multimedia services or innovative services targeting high end terminals will increase. So operators need to do their service planning very carefully targeting different groups of end user segments. As operators need lot of cooperation from outside world, their network should be flexible enough to dynamically integrate new services. Operators need to expose their telecom capabilities, so that third parties or
40 | Mobile Europe
Sponsored Interview
online developer communities can bring their innovative mash up services. Operators are exploring all possible ways to increase their ARPU, but they also need to decrease the total cost of ownership in order to increase the margin of profit. They have to streamline their workflows and should reuse their capabilities on which they have already invested. Operators have started exploring new business models to provide both traditional and non-traditional services. Under the trend of all-IP evolution operators are planning for more convergent, personalized and differentiated experiences. First, convergent services around digital life will be further developed. For example, multi-screen digital media, covering PC, mobile, TV and digital frames etc, will be more popular and become a basic service. Quad-play connecting mobile voice and mobile broadband is coming into being. Social network user profiles will take on a more important role in future services. Secondly, contextaware services based on user behaviour will be more common: for example, a reminder service based on the users location and preferences. Promotions and advertising services would also be more targeted, giving users only what they really want without intruding on their privacy. To make all this happen, an open environment with a healthy ecosystem is needed, and this is the key point that Huawei SDP focuses on and addresses.
LL:
It really depends; theoretically, operators have a very unique ability to monetise the assets in the value chain; they have the strong customer base, they have charging facility, they have the public credit, so compared to other players in the value chain, like the terminal vendors, Internet providers etc, I believe this is the future, although I do believe this is not easy.
KD:
What makes Huawei different from other SDP providers in enabling operators to succeed in this market?
LL:
From the technical perspective, Huawei SDP offers a future-oriented open platform based on SOA architecture providing pre-built adaptors for prompt network integration; standard APIs and pre-developed templates for open service innovation; the ability to connect mass developers; an all-in-one portal for convergent presentation, and flexible business processes with BSS/OSS. Along with the platform, we also provide access to hundreds of ready-to-deploy consumer and enterprise services. From the business perspective, Huawei SDP offers a full range of professional service support from managed services, customisation, integration, to assistant operation and service consulting and planning. Working with more than 300 top-ranking global CP/SP partners, Huawei enhances the efficiency of VAS delivery more than tenfold, from five to six a year to more than 100. Thirdly, Huawei also provides SDP hosting centers with pre-integrated services from Huawei and third parties. Finally, Huawei SDP is a mature business solution that has been widely selected and commercial use by more than 120 operators in over 100 countries worldwide, including the worlds five largest mobile operators: Vodafone, Telefonica, America Movil, China Mobile and China Unicom.
KD:
For the operators that want to go down that transformational route, what are the things they need to do to allow them to compete?
LL:
Some of the operators are still waiting to see how the market status changes. But the big operators are considering how to change their networks to become smarter, and let more service developers join and to generate more revenue from new applications. For example the recent GSMA Wholesale Community Applications initiative has been designed to develop a common set of APIs to enable service developers to deploy services across multiple networks. This is the kind of approach the industry is forming. I think some Tier One operators want to catch not only wholesale revenues but to retain control of key applications that they may consider accord well to operators own core competencies. For example, operators have a closer relationship with their subscribers, and generate greater loyalty compared to internet providers. They also retain key sets of information related to useage, location, and network data. .
KD:
Are you a believer that operators really will be able to monetise those kinds of assets?
ABOUT LANCE LIN Mr Lin is the Vice President Huawei Software Company and is responsible for Huawei softwares global sales and marketing efforts. Prior to his current role, he was vice leader of global technical sales department within Huawei software from 2005 to 2008, and was director of software technical sales for Asia Pacific from 2001 to 2005. Mr. Lin joined Huawei Technologies in 1996. He graduated from Chongqing University in 1996 with a Masters degree in Software.
Mobile Europe | 41
Diary & Notes

January/February 2010
WIMAX FORUM GLOBAL CONGRESS 2010
16 -17 June, Amsterdam Now into its 3rd year, WiMAX Forum Global Congress is the worlds only globally-focused WiMAX trade show, providing a forum for the global WiMAX community to come together. Last year, attendees came from over 115 countries, including 56% of the worlds top 100 operators. http://global.wimax-vision.com Zain, T-Mobile and Avea and will be embracing topics from fighting the commoditisation of messaging through to assessing the future role of messaging in the mobile market and beyond. http://www.globalmessagingcongress.com
THE PR TEAM MUST BE WONDERING WHAT THEY DID TO DESERVE THIS. OH DEAR.
FEMTOCELLS WORLD SUMMIT ROAMING WORLD CONGRESS

21 - 24 June, Barcelona Bringing together the world's roaming community in a dynamic networking and learning environment, this event is unparalleled for knowledge sharing, building contacts and enhancing your commercial knowledge http://www.iirevents.com/IIR22 -24 June, London With over 300 international delegates attending the summit in 2009, and several major operators from around the globe already signed up for keynote presentations for 2010 the conference and exhibition will provide a unique opportunity for everyone in the industry to take the pulse of the 'femtocell' invasion. http://www.avrenevents.com/home
PACKET TRANSPORT NETWORKS GLOBAL MESSAGING 10

22 -23 June, London This years Global Messaging event, once again co-located with MeM, will feature over 40 industry thought leaders from companies including O2, BT, Telecom Italia, 5 - 8 July, Milan EMEA's dedicated packet transport event. PTN provides insights into operator approaches to TDM evolution for efficient packet transport and delivers detailed information on the new technologies and architectures aimed at enabling complete packet transformation of fixed and mobile networks. IGain a deeper understanding of your best options in this complex and business critical area. http://www.iir-events.com/IIR-Conf/page.aspx?id=24497
The patent-infringing iPad?
The spring litigation season is upon us, and Nokia has backed up its playground chat with some upper cuts to the jaw of Apple, launching legal proceedings alleging patent infringements. In Wisconsin.
This is going to make Nokia about as popular in the US as Tiger Woods is in the locker rooms of the USGPA golf tour. Not that Apple has been getting things all its own way, of course, when it comes to PR. The small-scale, niche provider of vertically integrated music and games platforms has been letting some of the velvet glove fray from around the iron fist of its PR department. First off there was the mocked response from Apple to the fact that one of its developers lost a phone in a bar, and didnt get it back until pictures of it had been posted all over the internet by Gizmodo. It may not have been Apples fault that the police went into the blogger in questions apartment in strong arm fashion, but it still didnt look good. Then, Steve Jobs published an article on the Apple site telling the world why the company wont work with Adobes Flash.
Flash isnt open (Apple is, by the way, presumably in the way that open prisons are open), Adobe isnt open, and it doesnt even work very well. Not only that, but the CEO at Adobe is a bit lame, and doesnt even have a collection of 36 cashmere black polo necks. And now Nokia? Good heavens, the PR team must be wondering what they did to deserve this. Oh dear.
42 | Mobile Europe
DUBAI ARIS, 12:00 DON, 11:00 P ON IME: 10:00 L JUNE 2010 T M O N DAY 9 T H
Webinar Series 2010 Exclusive
Minimizing roaming revenues at risk with a new end-to-end approach.

REGISTER TO ATTEND TODAY www1.gotomeeting.com/register/884138049 Email: Justyn.gidley@eurocomms.com Tel: +44 (0)207 933 8979
in association with
CommProve
Globally more than 100% of profits are made from roaming and messaging. By doing real-time end to end analysis operators can quickly identify roaming revenue at risk or loss and quickly resolve the causes in a prioritized manner. Current roaming solutions are blunt tools that cannot provide real time analysis of the revenue impact of network issues. This is causing revenue leakage for many operators. Also, real time monitoring of interconnect links and outbound roamer statistics, the interconnect and roamer agreements can be managed effectively to dramatically minimize costs. Find out how real time end to end monitoring and analysis can maximise the capture and retention of inbound roamers, act directly on revenue impacting issues and drive revenues from your most valuable customers.
Moderator: Speakers:
Keith Dyer, Editor, Mobile Europe Mark Hoogerbrugge, CommProve
For details of the European Communications Executive Webinar Series 2010, contact Justyn Gidley on +44 (0)207 933 8979

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I JUST DONT THINK THEY GET IT WHO SAID IT, AND WHY?

FEMTOS BREAKOUT YEAR?

EUROPES WIRELESS MAGAZINE S issue no. 209 S April/May 2010 S www.mobileeurope.co.uk

> How the industry

managed to agree on a common approach to voice over LTE

THE NEW VALUE CHAIN

> The four stages

> Lance Lin

FEMTO 101 THE FEMTOCELL PROMISE

The story behid the next generation of voice services

FEMTO 102 THE END-TO-END FEMTOCELL NETWORK

FEMTO 201 THE FEMTOCELL VENDORS

FEMTO 202 THE FEMTOCELL OPERATORS NEWS

ADVANCED STUDIES THE YEAR AHEAD

The events and conferences coming up in the weeks ahead

EXTRA CREDIT UNANSWERABLE QUESTIONS

A NEW VALUE CHAIN

go to www.mobileeurope.co.uk for the latest information on mobile

print products, we are redoubling our commitment to the format

Printed by William Gibbons & Sons Ltd, Willenhall, UK.

NEOMEDIA BOSS SAYS FUTURE STILL BRIGHT

"INCONCEIVABLE" THAT INVESTOR WILL WITHDRAW JUST AS MARKET ACCELERATES

2D barcodes set for growth. Who will profit?

Boom could bring operators back to broadcast

Operators to address mid-tier usage

TELENOR GRAPPLES WITH MULTIPLE OSS

Telenor HQ - now with fewer OSS

82% OF ALL USERS PAY LESS THAN 35 A MONTH

MOBILE DOMINATES GPS MARKET

go to www.mobileeurope.co.uk for the latest mobile news

SYNCHRONICA OUTLINES PLANS FOR COLIBRIA

Testing times for mobile backhaul

Ixia now includes time sync protocol support

Synchronicas Mobile Gateway UI

FonYou takes operators to Facebook users

SUB-$100 FEMTO CAN BE PROFITABLE

SPAM REPORTING SERVICE

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THE HIDDEN COST OF THE SMARTPHONE BOOM

Mobile payments to reach $630 billion by 2014

App stores and smartphones boosting m-money

Femtocells: 2010 and beyond

FEMTOCELLS MARKET @ CROSSROADS

Mobile Europe Insight Report | 15

FEMTO 101 THE FEMTOCELL PROMISE

Mobile Internet Usage: Home and Work

16 | Mobile Europe Insight Report

Smartphone Base over all Mobile Handsets

Applications Special Tariffs Traffic Offload

Allows service benefits without requiring handset or device upgrades.

Benefits in kind: The opportunity of femto for operators and consumers

Mobile Europe Insight Report | 17

FEMTO 102 THE END-TO-END FEMTOCELL NETWORK

Left: Femtocell network diagram source: Airvana

Mobile Europe Insight Report | 19

FEMTO 201 THE FEMTOCELL VENDORS

Samsung SpiderCloud Stoke Tatara TI Ubiquisys

FEMTO 202 THE FEMTOCELL OPERATORS

Mobile Europe Insight Report | 21

ADVANCED STUDIES THE YEAR AHEAD

EXTRA CREDIT UNANSWERABLE QUESTIONS

Mobile Europe Insight Report | 25

TRENDS IN THE FEMTOCELL MARKET