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?
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-to-end 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:
You mention deployment, but how important will ongoing management of femtocells be for carriers, once they have thousands of femtocells deployed?
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 self-report 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 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.
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.
Keith Dyer:
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 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.
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:
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 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 home to use high bandwidth applications.
That means people are not getting the experience they have come to expect and demand as the 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.
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.