Femtocells Create New Opportunities in the Enterprise Market

Femtocells will allow mobile network operators (MNOs) to target more businesses with indoor cellular services, according to a new report published by Analysys.

"A small number of MNOs are already using 2G picocells to target businesses with indoor cellular voice services," according to the report's co-author Dr Mark Heath. "For example, Spring Mobil in Sweden focuses entirely on the enterprise market, using picocells to deliver high-quality indoor coverage. The operator has acquired 30,000 users in 600 corporate customers." Currently, expensive backhaul transmission from the business to the MNO limits the opportunities for cost-effectively installing picocells in more organisations.

Heath says, "Femtocells can operate using much cheaper transmission solutions than picocells. This will enable MNOs to address much smaller sites, such as SOHOs and remote offices of corporate organisations."

Key findings from the report include:

• A typical indoor coverage solution, using picocells and E1 transmission, requires at least 30 users within the picocell coverage area to be cost-effective for an MNO. If the MNO is unable to increase revenue substantially, then many more users may be required.
• The cost of transmission is the limiting factor in the business case for picocells. MNOs need to find cheaper alternatives, such as DSL and transmission sharing.
• 3G femtocells can operate using cheap transmission solutions, such as DSL and have greater potential to support non-voice services than 2G picocells.

"Femtocells and picocells will be important in helping MNOs to respond to the threat of dual-mode cellular-WLAN services in the business sector," according to report co-author Dr Alastair Brydon. "MNOs can offer services that replicate the benefits of dual-mode handset solutions, using standard cellular handsets, and provide seamless working between the indoor and outdoor cellular networks."

Posted to the site on 9th December 2007