Femto Forum pushes business case

Femtocells can take some pressure off the mobile network

The organisation behind the wide-scale development and adoption of femtocells has released a white paper detailing the operator business case for the technology.

The Femto Forum Business Case (PDF), conducted by Signals Research Group (SRG), found that femtocells can dramatically reduce the financial costs created by heavy mobile broadband data users on the mobile network.

The research also revealed that the business case for femtocells does not depend on any one critical factor, and is strong across a wide variety of situations and regions.

"What shines through when you undertake a serious assessment of the femtocell business case is that there is no single factor required for healthy financial returns," said J Randolph Luening, vice president of wireless economics at SRG.

"Instead, the business case is highly dependent on the attributes of the targeted customer segment, and the specific customer proposition put forth by the operator."

Even changing the perceived key assumptions associated with femtocells does not threaten the viability of the business case, according to SRG. For instance, it is not contingent on a reduction in churn, even though this is a likely outcome of a femtocell deployment, and has already been proved in other similar fixed-mobile convergence deployments.

With the rapid adoption of flat-rate mobile broadband data packages, the research highlighted the considerable savings associated with offloading traffic via the femtocell, particularly for heavy data users.

SRG's calculations suggest that offloading around 1.4GB of data per month from a coverage-constrained macro-cellular network would justify an operator offering a subscriber a free femtocell.

"To date we have seen femtocell deployments mostly focus on providing improved indoor coverage. However, the rapid take-up in mobile broadband services means we are going to see this start to change rapidly," said Simon Saunders, chairman of the Femto Forum.

"If the mobile industry is serious about decisively moving beyond simple voice and text to providing a mobile broadband service to all its subscribers, then femtocells must be a key consideration for managing the associated costs.

"SRG's findings illustrate the flexibility of the femtocell business case. The picture that emerges is one of a low risk investment, requiring a modest financial outlay to get started and costs which can be easily paid back based on conservative assumptions about the services offered."

Although the implementation and adoption of femtocells has some geographic influences which may affect how local operators deliver systems, these are largely outweighed by the more general issues such as average revenue per user and usage.

The adoption of femtocells took a major step forward recently with the publication of the world's first femtocell standard by 3GPP in conjunction with the Femto Forum and the Broadband Forum.