101 Release One Home Overview

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www.scf.io/ www.smallcellforum.org

RELEASE

DOCUMENT

Release One: HomeOverview

February 2013

101.01.01

SMALL CELL FORUM

One scf.io/


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Report title: Small Cell Forum Release One: Home Issue date: 20 February 2013Version: 101.01.01

Small Cell Forum supports the wide-scale adoption of small cells. Its mission isto accelerate small cell adoption to change the shape of mobile networks and

maximise the potential of the mobile internet.

Small cells is an umbrella term for operator-controlled, low-powered radio access nodes,including those that operate in licensed spectrum and unlicensed carrier-grade Wi-Fi. Smallcells typically have a range from 10 metres to several hundred metres. These contrast witha typical mobile macrocell that might have a range of up to several tens of kilometres. Theterm small cells covers femtocells, picocells, microcells and metrocells.

Small Cell Forum is a not-for-profit, international organisation, with membership opento providers of small cell technology and to operators with spectrum licences forproviding mobile services.

At the time of writing, the Small Cell Forum has 141 members including 68 operatorsrepresenting more than 3 billion mobile subscribers 46 per cent of the global total as well as telecoms hardware and software vendors, content providers and innovativestart-ups.

The Small Cell Forum is technology-agnostic and independent. It is not a standards-setting body, but works with standards organisations and regulators worldwide toprovide an aggregated view of the small cell market.

This document forms part of the Small Cell Forums Release One . The theme ofRelease One is the Home, and includes the complete body of work operators will needto know in order to deploy:

Femtocells intended for home or small office applications. These applicationsare based typically indoors and involve locations where a single femtocell is

usually sufficient. Both 3GPP and 3GPP2 femtocells are included in the scopeof this Release.

Release One also contains significant advanced work packages that will inform futurerelease themes, including enterprise, metro, and rural small cells.

The Small Cell Forum Release website can be found here www.scf.io

A description and roadmap for the release programme itself can be found herewww.scf.io/doc/100

If you would like more information about the Small Cell Forum or would like tobe included on our mailing list, please contact:

Email [email protected]

Post Small Cell Forum, PO Box 23, GL11 5WA UK

Member Services Lynne Price-Walker [email protected]

For a full list of members and further information visit our website www.smallcellforum.org


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Contents

1. Introduction and Contents ............................................... 1

1.1 Motivation for this overview ................................................. 1 1.2 Contents ........................................................................... 1 1.3 Supporting documents ........................................................ 2 2. Market drivers Why Femtocells? ................................... 5 2.1 Coverage .......................................................................... 5 2.2 Capacity & Quality of Experience .......................................... 6 2.3 Economics ......................................................................... 6 2.4 Femtocells: Meeting the Market Needs .................................. 7

2.5 Femtocells in relation to other solutions ................................ 8 2.6 Consumer needs ................................................................ 9 2.7 Initial Barriers that have been overcome ............................... 9 3. Business Case ................................................................ 10 3.1 Key elements of business case ............................................ 10 3.2 Modelling the femtocell business case .................................. 10 3.3 Business case outcomes ..................................................... 11 3.4 Femtocell economics in the real world .................................. 13 4. Radio spectrum and interference management .............. 14

4.1 Interference management: the central magic of cellularnetworks .......................................................................... 14

4.2 Examining challenging interference scenarios ........................ 14 4.3 Outcomes: interference is manageable, yielding huge capacity

and user experience gains .................................................. 15 5. Architecture and standards ............................................ 17 5.1 The role of standards ......................................................... 17 5.2 Candidates and choices ...................................................... 17 5.3 Operator requirements ....................................................... 18 5.4 Wider operator needs ........................................................ 19 5.5 3GPP standards for 3G (WCDMA) femtocells ......................... 19 5.6 3GPP2 activities related to 3G (CDMA) femtocells .................. 21 5.7 TR-196: The Broadband Forum data model for managing

femtocells ........................................................................ 21 5.8 How the standards meet the market requirements ................. 22 6. Interoperability ............................................................. 24 6.1 Why is open interoperability a founding principle of Small Cell

Forum? ............................................................................ 24


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6.2 Plugfests: Small Cell Forum cooperation with ETSI ................. 24 6.3 A further vital step towards open interoperability for

femtocells ........................................................................ 25

7. Regulatory issues .......................................................... 26 8. Value-added services ..................................................... 28 8.1 How can femtocells enable value-added services? .................. 28 8.2 Femtocell service examples ................................................ 28 8.3 What has Small Cell Forum done to enable development of

femtocell services? ............................................................ 29 9. Market progress ............................................................. 30 9.1 The femtocell ecosystem .................................................... 30 9.2 Operator deployments ....................................................... 30

9.3 Numbers of femtocells deployed .......................................... 31 9.4 Forecasts ......................................................................... 31 10. Conclusions ................................................................... 33 10.1 What has been achieved? ................................................... 33 10.2 A formula for success ........................................................ 33 10.3 Into the future .................................................................. 33 Abbreviations (across Release One) ......................................... 35 References ............................................................................... 38

TablesTable 1-1 Full set of documents under SCF Release One Home ........................... 4 Table 4-1 The small cell & macrocell network has an air-interface capacity limit

nearly 100x that of the macro alone ............................................... 15 Table 5-1 How femtocells standards meet market requirements ....................... 23

FiguresFigure 2-1 An increasing proportion of mobile usage is indoors [source: Informa] .. 5 Figure 2-3 In-home mobile voice call problems impact customer churn Source:

Parks Associates ............................................................................ 6 Figure 2-4 Femtocells are part of a continuum of applications of small cell

technology (Source: [21]) ............................................................... 7 Figure 2-5 Typical femtocell deployment scenario .............................................. 7 Figure 2-6 Wi-Fi usage frequency positively correlates with femtocells appeal ........ 9 Figure 3-1 Example customer lifetime value (CLV) waterfall chart ...................... 11 Figure 3-2 A representative example of a femtocell business case. Details in [4] .. 12 Figure 3-3 Reduction in cost of carrying additional mobile data over femtocells

compared with macrocells [4] ........................................................ 12 Figure 4-1 Challenging interference scenarios for femtocell deployment .............. 15 Figure 5-1 Small Cell Forum Reference Architecture ......................................... 18


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Figure 5-2 Small Cell Forum Operator Requirements for 3G FemtocellArchitectures ............................................................................... 18

Figure 5-3 Overview of the timeline for 3GPP standards related to femtocells andSCFs supporting activities ............................................................. 20

Figure 5-4 Mapping of 3GPP standards to the Small Cell Forum referencearchitecture ................................................................................. 21 Figure 8-1 Price sensitivity of new femtocell services from !Error! Bookmark not

defined. " ..................................................................................... 29 Figure 9-1 Small Cell Forum membership represents a fully featured industry

ecosystem ................................................................................... 30 Figure 9-2 Growth of commercial femtocell deployments and commitments

Source: [Error! Bookmark not defined.] .......................................... 31 Figure 9-3 Global small cell deployment forecasts by category 2011-16 Source:

Informa Telecoms & Media [Error! Bookmark not defined.] ................ 32


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Report title: Small Cell Forum Release One: Home Issue date: 20 February 2013Version: 101.01.01 2

5 Architecture and standards : Explains the operator requirements and consensus building whichthe SCF used to ensure its partners in 3GPP, 3GPP2 and Broadband Forum were able to create timelyand efficient standards for femtocells

6 Interoperability : While standards are essential to create a healthy technology ecosystem, furthersteps need to be taken to ensure full open interoperability. The role of ongoing plugfests in ensuringadherence to the standards is explained and the steps towards the first small cell Profile is introduced

to allow consistent specification and compliance with the most common femtocells requirements. 7 Regulatory issues: Regulators can benefit in their societal and economic goals by the deployment

of femtocells, but in order to do maximise these benefits some key issues need to be considered andclarified. These are explained, along with details of the progress made in femtocell regulationinternationally.

8 Value-added services : The consumer demand and operator opportunity to use femtocells as aplatform for enhanced and new services is explained, highlighting the opportunity for furtherimprovements in the business case and the steps taken to encourage a rich developer ecosystem forfemtocell-based applications.

9 Market progress : Surveys how the best practice, standards and motivations explained in thepreceding chapters have translated into mass-scale femtocells deployments and the prospects forfurther future growth.

10 Conclusions : Summarises the state of play for femtocells and points towards futuredevelopments.

1.3 Supporting documents

While this document provides a self-contained overview of the key message of the entire Release, thefollowing documents provide a deep and rich body of definitive supporting material related to SCF ReleaseOne Home, organised by chapter headings:

Documentnumber

Title (with link to online source of document)Brief Description

Reference inthis document

SCF01.100.01

SCF Release Structure and Roadmap 1

SCF01.101.01

Small Cell Home: Overview of SCF Release One (thisdocument)

2

Market Drivers SCF01.026.02

Global Consumer Survey of In-Home Mobile Services andFemtocells - Parks AssociatesParks Associates study of global consumer attitudes towardfemtocells and femtocell benefits for users of mobileservices

3

SCF01.016.02

Femtocells - Natural Solution for OffloadWhile operators have historically been innovative andsuccessful in expanding network capacity, the current rateof growth in demand is unprecedented. As described in thispaper, femtocells offer a highly effective and cost-effectivemethod of easing the traffic carried by the macro-cellularnetwork.

4

SCF01.007.02 Wireless in the Home & Office: the need for both 3Gfemtocells and Wi-Fi access pointsEmphasizes the role that femtocells will play alongside Wi-Fiin providing the best possible mobile data experience toconsumers.

5

Business Case SCF01.005.02

Femtocell Business Case - Signals ResearchHighlights the economics of femtocells under a wide rangeof scenarios and assumptions on a global basis

6

SCF01.013.02

The Business Case for Femtocells in the Mobile BroadbandEra - Signals ResearchAnalyzes the economic benefits of femtocells in anoperators next-generation product suite

7

Spectrum and Interference Management


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Documentnumber



SCF01.003.02

Interference Management in UMTS Femtocells ("High-band")A comprehensive cross-industry study, analysinginterference risks from femtocell deployments,recommending mitigation techniques and any necessaryassociated RF parameters and performance requirements toensure minimal disruption to the macro network or otherfemtocells. In higher frequency bands such as 1900 and2100 MHz.

8

SCF01.009.02

Interference Management in UMTS Femtocells ("Low-band")Additional detailed study of femtocells interferencemanagement, extending the analysis of SCF 01.003.02 tolower frequency bands such as 850 or 900 MHz

9

SCF01.008.02

Topic brief: Interference Management in UMTS FemtocellsAn accessible summary of the findings of the detailedinterference analysis with updates concerning standards andreal world experiences.

10

SCF 01.036.2 Topic brief: Femtocell synchronisation and locationAddresses the common technological and economicchallenges in achieving synchronisation and locationdetermination for Femto and Small Cells. It is provided as abriefing for network operators, to encourage debateamongst Femto and Small Cell vendors as far as necessaryto ensure that industry requirements can be met and toalert vendors to the specific needs and opportunities offeredby the market.

11

Architecture and Standards SCF

01.044.01

3G femtocell standards overview

A summary and guide to the 3G femtocell standards of3GPP, 3GPP2 and the Broadband Forum, explaining theunderlying requirements and the reasons for the maindecisions taken in the standards bodies and SCF to ensurethe standards met operator needs.

12

SCF01.041.01

Femtocell Systems Overview for cdma2000 WirelessCommunication Systems 3GPP2A deployment guide for CDMA femtocells produced by3GPP2 with the support and collaboration of SCF.

13

SCF01.048.01

3G Small Cell Layer 1 API: Message Flow DefinitionProvides a layer 1 API for 3G small cells as part of Small CellForums Small Cell Forums SCAPI (Small Cell Application

Platform Interface ) initiative to encourage competition andinnovation within the small cell industry between suppliersof platform hardware, platform software and applicationsoftware by providing a common API around which suppliersof each component can compete.

14

RegulationSCF01.002.03

Regulatory Aspects of FemtocellsAimed at regulators who wish to understand the benefitsand potential regulatory issues associated with femtocells.

15

SCF01.001.02

Femtocells and HealthProduced in collaboration between SCF, GSMA and MMA toanswer consumer questions about femtocells regarding thesafe use of radio waves and wireless communications

16


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Documentnumber



equipment. The wireless industry takes these concernsseriously and welcomes ongoing research. The consensus ofinternational health authorities today is that there are no

established health effects from low power wirelesscommunications devices such as femtocells.

Value-Added ServicesSCF01.046.01

Small Cell ServicesA guide to the opportunities presented by small cell-enabledvalue added services and the developer ecosystem andassociated technical API standards which SCF has created.

17

SCF01.040.02

FemtoZone Services (Release One) RESTful BindingsTechnical definition of femtocell services API

18

Market ProgressSCF01.043.01

Small cell market status Q4 2012 InformaMarket status report, produced independently by Informa,

providing latest developments, deployments and forecastsfor femtocells and the full range of small cells.

19

Table 1-1 Full set of documents under SCF Release One Home


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2. Market drivers Why Femtocells?

This section covers the trends in the needs of consumers and operators which are driving increased interestin femtocells. It also explains how femtocells fit relative to other potential technologies to address theseneeds.

2.1 Coverage

Coverage is a critical hygiene factor for all mobile users: without reliable coverage, exotic service offeringsare irrelevant. For every operator, reliable coverage delivered to all the locations which matter to theircustomers is a key enabling factor to promote satisfaction. Mobile usage in the past was dominated by userson the move in cars and trains and networks were designed accordingly. Today, however, an increasingproportion of mobile usage is indoors, especially at home and in the users place of work see Figure 2-1.

Figure 2-1 An increasing proportion of mobile usage is indoors [source: Informa]

However, even the best mobile networks cannot provide coverage everywhere with macrocells, especiallyindoors. The construction materials of modern buildings increasingly attenuate radio signals as they aim toprovide improved thermal insulation. Users in deep basements or on the top floors of very high buildingscannot be served reliably from the outdoor mobile network either. In very rural areas with a low density ofhousing or in areas of outstanding natural beauty, provision of conventional base stations may beimpossible or at least highly uneconomic. Yet every mobile user deserves and increasingly expects andrelies upon - good mobile coverage.

Given that every operator faces these challenges, recognising these issues and providing customers withaccess to the best solutions is the hallmark of an excellent mobile operator. Furthermore, poor coverage isfrequently cited as the number one network-related source of customer churn from operators, while goodcoverage can act as a powerful attractant for a customer to join a new operator.

To understand the scale of these issues, Small Cell Forum commissioned leading consumer research firmParks Associates to conduct a six-nation, 6000 customer survey [ 3 ]. At least 10% of households surveyedreported having mobile voice quality issues 1 to 3 times a week in the UK, Germany and Spain, whileChinese respondents experience poor voice quality at twice the rate of their peers in other countries. Dataproblems were higher still, impacting on slow internet speeds and trouble connecting to mobile email. Thesedifficulties were found to correlate closely with the customers propensity to churn see Figure 2-2.


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Figure 2-2 In-home mobile voice call problems impact customer churn Source: Parks Associates

Any method of ensuring that mobile coverage is reliable in the places users care about can therefore deliverbenefits both to the customer, who can rely on their mobile device to be in contact when it matters most,and to the operator by ensuring happy, loyal customers. Such reliable coverage can also act as a platformfor additional mobile services including fixed-mobile convergence, differentiated tariff plans and value-addedservices.

2.2 Capacity & Quality of Experience

Todays consumer demand is for more than just coverage. Customers are increasingly consuming largevolumes of data and expect this to be available reliably and at high data rates.

Mobile networks in many countries have shifted from being predominantly voice networks to becomeprimarily data. UK operator Hutchison 3G reported in November 2011 that over 97% of its traffic was data.There are over 100 networks now offering 21Mbit/s and a further 50 delivering up to 42Mbit/s over 3G, withmany operators launching 4G/LTE service every month. Consumer demand for data services is growingunabated, with penetration of smartphones exceeding 40% in many countries and over 300 million beingshipped annually. A large ecosystem of application vendors has emerged, reliant on always on, highspeed, low-latency wireless connectivity. Supporting these applications, the volume of data is continuing togrow rapidly: Cisco predicts that the volume of wireless data will exceed that of wired data by 2015.

These large volumes of data create a challenge for mobile operators in delivering ever increasing volumesand rates of data economically. They have several potential sources of extra capacity, including upgradingexisting sites to support more spectrum and technologies with higher spectral efficiency such as enhanced3G and 4G. However these sources are limited in their scope, and there is general agreement that the mostimportant single source of future capacity will be more cells, which are necessarily smaller. Indeed, 98% ofoperators surveyed in December 2012 say that small cells are essential for the future of mobile networks

[20 ]. Such smaller cells, while supporting higher data rates and an improved user experience, have to bedelivered efficiently, cost effectively and using available backhaul techniques. These factors are discussed infurther detail in [ 21 ].

2.3 Economics

While smaller cells can act as a source of substantial additional capacity, targeted to areas where it is mostneeded, the number of users per cell also reduces, creating challenges in ensuring that the added capacityis available sufficiently cost-effectively to be affordable. If this can be achieved, then operators have anopportunity to use small cells as an active means of data offload , where it is more cost effective to shifttraffic to the small cell layer than to continue to occupy precious macrocell resources. The opportunity touse femtocells as a natural source of mobile data offload is highlighted in [ 4 ].


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2.4 Femtocells: Meeting the Market Needs

Femtocells create an opportunity to address this range of consumer and operator needs, delivering servicesreliably and cost-effectively. But what exactly is a femtocell?

While there is no formal definition, the Small Cell Forum views femtocells as one of a continuum of small celltypes which includes femtocells, picocells, microcells and metrocells intended for home, enterprise urbanand rural applications, as illustrated in Figure 2-3.

Figure 2-3 Femtocells are part of a continuum of applications of small cell technology(Source: [21])

Femtocells are low-power access points, providing wireless voice and broadband services to customers. Atypical deployment scenario is shown in Figure 2-4.

Figure 2-4 Typical femtocell deployment scenario

Femtocells have a number of key attributes which distinguish them from other technologies:

Using mobile technology : Femtocells use fully standardised wireless protocols over the air tocommunicate with standard mobile devices, including mobile phones and a wide range of othermobile-enabled devices. Qualifying standard protocols include GSM, W-CDMA, LTE, MobileWiMAX, CDMA and other current and future protocols standardised by 3GPP, 3GPP2 and theIEEE, which collectively comprise the technologies included in the ITU-R definition of IMT. Theuse of such protocols allows femtocells to provide services to several billion existing mobiledevices worldwide and to provide services which users can access from almost any location aspart of a wide-area network.


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Operating in licensed spectrum : By operating in licensed spectrum licensed to the serviceprovider, femtocells allow operators to provide assured quality of service to customers over theair, free from harmful interference but making efficient use of their spectrum.

Generating coverage and capacity: As well as improving indoor coverage, femtocells alsocreate extra network capacity, serving a greater number of users with high data-rate services.They differ in this from simple repeaters or boosters which may only enhance the coverage.

Over Internet-grade backhaul : Femtocells backhaul their data over internet-grade broadbandconnections, including DSL and cable, using standard internet protocols. This may be over aspecific Internet-service providers network, over the Internet itself or over a dedicated link.

Cost Effective : The large volumes envisaged for femtocells will allow substantial economies ofscale, driving efficiencies in manufacturing and distribution in a manner similar to the consumerelectronics industry and likely with costs comparable with access points for other wirelesstechnologies.

Self-organising and self-managing : Femtocells can be installed by the end customer. Theyset themselves up to operate with high performance according to the local and network-wideconditions regarding radio, regulatory and operator policies, with no need for intervention by thecustomer or operator. They continue to adjust themselves over time as the customer, operatorand regulator needs evolve to maximise performance and reliability.

Control maintained by licensed operators: Femtocells only operate within parameters set bythe licensed operator. While they have a high degree of intelligence to automatically ensure thatthey operate at power levels and frequencies which are unlikely to create interference, the limits

on these parameters are always set by operators, not the end user. The operator is always ableto create or deny service to individual femtocells or users. This control is maintained whether thefemtocell itself is owned by the operator or the end user.

Amongst small cells, femtocells occupy a special role for two particular reasons:

They were the first instance of small cells with specialised, open interfaces, creating a broadindustry ecosystem

They create the technological opportunity to power the wider range of small cells via thestandards, interfaces, algorithms, chipsets and know-how which is scalable to mass-marketvolumes with an opportunity for major economies of scale.

Femtocells are widely expected to be by far the most numerous single type of small cells, so even operatorsand vendors who are more focused on other small cell types have a keen interest in ensuring the success ofthe femtocells ecosystem.

While there is no specific limit to the application areas for femtocells, they are particularly well suited todeployments in homes, SoHo (small office/home office) and small/medium business premises.

2.5 Femtocells in relation to other solutions

Small cells and femtocells in particular are not the only means of improving service inside buildings.Alternatives include repeaters, distributed antenna systems (DAS) and Wi-Fi and any of these alternativescan be complementary to femtocells in particular situations. In other situations small cells are beginning todisplace solutions such as repeaters and DAS.

There is a particular opportunity for femtocells and Wi-Fi to work well alongside each other and they shouldnot be seen in modern networks as competitive technologies. When deployed together with appropriatemanagement, there is the opportunity to create Integrated Small Cell/Wi-Fi Networks. Such networks offer

a range of advantages including: Leveraging the increasing range of support in mobile devices for various combinations of 3G, 4G

and Wi-Fi Operator-managed services with enhanced Quality of Service and differentiated capabilities over

multiple simultaneous radio bearers Seamless service continuity with the macro network Ease of configuration and use Higher levels of security Better device battery life Use of the full range of radio spectrum both licensed and unlicensed - available in a given

location Wide installed base of Wi-Fi access points with rapidly increasing support from mobile operators

via various carrier Wi-Fi initiatives.


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Overall such potential benefits can go beyond pure data offload and into a world of intelligent, fine-grainedtraffic management for all devices over the entire radio spectrum with support for significantly enhanceduser experience.

Small Cell Forum has been in the vanguard of highlighting and making good on these opportunities for bothtechnologies to act together in synergy, both within the access point and deep within the network. Thebenefits of Integrated Small Cell / Wi-Fi Networks have been set out by Small Cell Forum in [ 5 ] and [ 22 ].They have been confirmed by Small Cell Forums cooperation with the Wireless Broadband Alliance [ 23 ] andboth organisations as well as standards bodies such as 3GPP are collaborating to make good on theseopportunities.

2.6 Consumer needs

So do femtocells actually meet a need amongst consumers? The consumer femtocell survey [ 3 ] explainedthe benefits of femtocells and asked consumers to rate the appeal of femtocells. On average, 59% of globalconsumers find the femtocells benefits appealing. Further, consumers with mobile data plans and 3Gsmartphones were disproportionately drawn to the benefits of femtocells. Of those using Wi-Fi at leastweekly on their smart phones the appeal was even higher, with 84% finding femtocells appealing,indicating a significant opportunity for Wi-Fi and femtocells to complement each other. This finding wasexplained by the benefits of femtocells in extending battery life and supporting excellent coverage for both

voice and data.

Figure 2-5 Wi-Fi usage frequency positively correlates with femtocells appeal

The survey also reveals that in competitive global mobile markets, femtocells would help mobile operatorsretain valuable customers, attract new ones, or potentially persuade families with multiple operatorsaccounts to consolidate service plans. For instance, among global consumers who indicated a stronglikelihood of changing operators within the next twelve months, 42% expressed strong willingness to staywith their current provider if it offered them a femtocell.

2.7 Initial barriers that have been overcome

The Small Cell Forum works systematically to address and remove barriers to commercial deployment of allsmall cell technologies. For femtocells, the barriers identified and now addressed were:

Business case Interference Ecosystem Standards Regulatory

These aspects are described in detail in the following sections.


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3. Business Case

Any technological development has to consider not only the technological feasibility, but also theopportunity for a positive business case which will support the sustainable deployment of the technology foras wide a range of customers as possible. However the elements of a business case can vary significantly

amongst operators and by market, so there is no single business case, but rather a range of options to beinvestigated according to circumstances.

To support this need, detailed studies of business case issues across a range of cases were conducted bythe Forum, and the Forum commissioned Signals Research Group to investigate these issues and produce amodel which would allow its members to investigate options and parameters of relevance to their ownsituation.

3.1 Key elements of business case

Any business case is impacted by three broad areas:

1. The costs of establishing and running a service, whether capital (capex) or operational (opex)2. The drivers of revenue , either directly from charging for a service or indirectly via increased

loyalty which extends the period over which revenue is available from a given customers3. The timing of the flow of money into and out of the business.

In the case of femtocells, the drivers of each of these areas may include:

Cost drivers:

Cost of the femtocells access point itself Costs in the core network associated with gateways and other network elements Integration costs, including particularly IT upgrades to OSS and BSS systems Cost savings from offloading the macrocell network Costs of marketing the service Costs of training support staff

Revenue drivers:

Potential to retain customers for longer (reduced churn) Potential to add family members to a given tariff plan Revenue from increased voice and data usage , both outgoing and incoming, arising from better

availability and quality of calls and data Charging for the femtocell itself Value-added services enabled by the femtocell

Timing issues:

The period after which the femtocells requires replacement for technical or feature reasons The contract duration for the customer The cost of capital for the operator, which tends to reduce the value of revenues and costs in the

distant future

3.2 Modelling the femtocell business case

In order to balance all these aspects together and to account for the fact that the business case forfemtocells may be very different for different customer segments, a customer lifetime value (CLV)methodology was applied. This approach looks at the future net cash flows associated with a customerrelationship and calculates the present value by discounting future value according to the relevant cost ofcapital. In the end, a single number for the CLV with and without femtocells can be can be used to comparethe customer value before and after: provided the CLV with the femtocells service is significantly greaterthan that without, the use of femtocells should be a rational step for an operator to take. The details aregiven in [ 6 ] but an illustration is shown in the example waterfall chart in Figure 3-1. Each green or red barrepresents the present value of the expected future cash flow to an operator for that particular femtocellservice. Some bars are red, such as the femtocell cost bar (value destruction) and many bars are green(value creation). To a large extent the value creation/destruction associated with each bar is independent ofthe other bars. However, as illustrated in the waterfall chart, there is a cumulative effect with the starting

point of each bar dependent on the end point of the preceding bar (the bar to its left).


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Figure 3-1 Example customer lifetime value (CLV) waterfall chart Source: Signals ResearchGroup

Signal Research Group produced a detailed spreadsheet model to automate the calculation of CLV which hasa wide range of features and is available to full members of Small Cell Forum.

3.3 Business case outcomes

Results for a variety of example scenarios are presented in [ 6 ] and [ 7 ]. Generally the business case forcarefully targeted customer segments is very positive. Particular findings include:

There is no single strategy for making a successful femtocell business case. Instead, thebusiness case is highly dependent on the attributes of the targeted customer segment, which canvary considerably, and the femtocell features that the operator wishes to make available. Insome instances the payback on the incremental investment can require as many as 40 monthswhile in other instances the breakeven point is only 1 or 2 months. Likewise, the operator has ahigh degree of flexibility in how much it charges for the femtocell and for the services that itoffers.

A North American family of two can purchase a subsidized femtocell for $50 and take advantageof an unlimited calling plan for $15 per month, plus a $5 monthly fee to provide improvedcoverage while the operator can break even for that customer in 15 months and achieve a returnon investment (ROI) on its femtocell investment of 443%

In Europe, consumers are less likely to pay for improved coverage, but they will pay for anunlimited calling plan that uses the femtocell. After taking into consideration other assumeddifferences between the two regions, the European operator requires 22 months to breakeven

but realizes a 538% ROI. Femtocells can be used to provide deep in-building broadband wireless services far moreeconomically than a macro cellular network. In one representative sidebar analysis, wedemonstrate that a targeted femtocell strategy can be used to complement a lightly deployed3G network and deliver a true in-home broadband wireless experience with 2.5Mbps data ratesfor less than half the incremental coverage-related expenditure that would be required at 2100MHz if the same experience were delivered by the macro network. There can also beconsiderable savings associated with offloading traffic onto the femtocell, in particular for heavydata users. Based on our analysis, the cost savings associated with offloading at least 1.4 GB ofHSPA data per month onto the femtocell from a coverage-constrained macrocellular networkwould justify a free femtocell being dropped into the home.The business case for femtocells does not depend on any one critical factor or assumption inorder to generate a favorable outcome. For example, increasing the wholesale cost of thefemtocell by 50% (from $200 to $300) reduces the difference between the starting familylifetime value and the basic value proposition family lifetime value by a mere 16.3%. Also, thebusiness case is not contingent upon a reduction in churn even though it is a likely outcome of afemtocell deployment and has already been proven in other similar FMC product deployments.


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In one representative example of a Tech Savvy Family, the household lifetime value (CLV) increases from! 918 without femtocells to ! 2,646 with a femtocells offer. The additional provision of an enhanced serviceoffering further increases the CLV to ! 3,515, i.e. an increase of over 380% over the starting value.

Figure 3-2 A representative example of a femtocell business case. Details in [ 4 ]

Perhaps a simpler way to view the femtocells business case is to examine the difference in cost of carryingadditional mobile data traffic over femtocells compared with the macrocell network. The numbers depend onmany factors, but the analysis described in [ 4 ] shows a reduction in cost per GB by at least a factor of 4 inthe case of femtocells which carry all data via the mobile core, and a potential further substantial reductionin the case of femtocells implementing local traffic offload, as shown in Figure 3-3.

Figure 3-3 Reduction in cost of carrying additional mobile data over femtocells comparedwith macrocells [ 4 ]


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3.4 Femtocell economics in the real world

Since the Forums work on the femtocell business case was conducted, real-world large-scale deploymentsof femtocells have been conducted and have caused several factors to evolve:

Femtocell access point costs have been reducing over time as volumes and standardisation haveprogressed, producing important economies of scale which are crucial to small cell economics Data volumes per user have increased, further improving the savings available from data offload Leading operators have found that the reduction in churn is better than expected and customers

with femtocells are extremely satisfied with the service they obtain

So while the work of the Forum indicated a positive business case, in reality the business case has becomeeven better over time.


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4. Radio spectrum and interference management

4.1 Interference management: the central magic of cellularnetworks

Careful management of the precious radio spectrum resource is crucial for operators. They need to ensurethat the spectrum is increasingly densely reused to accommodate the increasing data volumes from modernmobile devices, while avoiding harmful interference which could degrade the user experience.

The management of interference is the central magic of cellular mobile technology, enabling essentiallyunlimited capacity from finite quantities of spectrum. Interference is traditionally managed using detailedradio planning tools, extensive ongoing field measurements and skilled radio planners and optimisers.However this traditional approach is not viable for femtocells, where the location of cells is variable and thenumbers may far exceed the numbers of macrocells. Nevertheless, the radio planners need to remain inultimate control of femtocells to ensure that they do not degrade the wider network and that they are onlyproviding a service where it actually enhances the experience for users both those on the femtocells andthose on the surrounding network.

Unlike current 2G and 3G macrocells, femtocells can manage their spectrum without the need for manualintervention. In fact, the smarts in small cells are able to manage spectrum and interference that the armiesof radio planners need to do manually. The small cell doesnt need drive testing. It performs its own testsand has enough intelligence to dynamically adjust its own parameters. And it does this regularly as thedemand changes on a daily and hourly basis. The small cell sees the small cell next door and the macrocellsin the vicinity and adjusts its own power output accordingly. This is a key part of the self-organizing network(SON) concept.

4.2 Examining challenging interference scenarios

The particular interference management scenario depends on the configuration of the femtocells. In somecases, operators deploy femtocells on dedicated spectrum channels, avoiding any direct interference withthe macrocells, but necessitating well-controlled handovers between the networks. In other cases, thescarcity of spectrum is such that it is necessary for the femtocells to share spectrum with macrocells,putting considerable onus on the interference management capabilities of the femtocells. This is especially

challenging when femtocells are operated in closed mode, where access is restricted to a white list ofusers, creating the possibility that macrocell users could be interfered with by a nearby femtocells whichthey cant access.

To address these challenges, interference management for 3G femtocells has been extensively studied bySmall Cell Forum as well as in bodies such as 3GPP. An accessible guide to these studies is available in [10]together with detailed studies in [ 8 ] and [ 9 ] Small Cell Forum examined some of the most challenging

corner cases where femtocells are deployed cochannel and in closed mode. We looked particularly at threescenarios for interference:

A macro-connected handset that is in close proximity to a small cell that it is not registered touse, causing a potential deadzone.

A small cell-connected handset that is at the furthest range of the small cell A small cell-connected handset that is closer to a small cell in the house next door, but is not

registered to use it.


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Note that it is not just the small cell-connected users who gain a better mobile internet experience, so dothe macrocell users. With less noisy devices competing for attention, interference is substantially reduced.The macrocell is no longer clogged up by the difficult-to-service indoor users.

So in summary, to get 100x throughput compared to macro-only networks, the following techniques may beapplied:

Adaptive Pilot Power Control Extended Tests for Dynamic Range Uplink power capping Dynamic receiver gain management

Our studies were based on simulations, although the parameters and assumptions were based on the real-world experiences of our operator and vendor members. However, since then, the techniques involved havebeen applied in millions of real-world femtocells and found to be effective in practice. To quote one majoroperator:

We have deployed femtocells co-carrier with both the hopping channels for GSM macrocells andwith UMTS macrocells. Interference isnt a problem. We have tested femtocells extensively in realcustomer deployments of many thousands of femtocells, and we find that the mitigation techniquesimplemented successfully minimise and avoid interference. The more femtocells you deploy, themore uplink interference is reduced

- Gordon Mansfield, Executive Director of RAN Delivery, AT&T

These techniques are also fully supported by appropriate hooks in the relevant standards from both 3GPP[24 ] and 3GPP2 [ 25 ], enabling the techniques to be fully implemented while still enabling differentiationand further performance enhancements.

Further explanation of the extensive studies in this important but challenging area is provided in [10], andthe full details of the underlying technical analysis are provided in [ 8 ] for frequency bands above 1 GHz and[9 ] for bands below 1GHz.


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5. Architecture and standards

5.1 The role of standards

Small Cell Forum members are committed to a principle of open interoperability to enable a wide range ofchoice and opportunity for operators and vendors alike. One of the key enabling factors for this openinteroperability is the development of timely appropriate standards. Such standards have several roles toplay:

They must be technically appropriate to support high-quality services in the relevant operatingenvironment for small cells. In the case of residential femtocells, for example, they must deliveran impressive quality of experience over bandwidth-constrained home broadband connectionsand with a high level of security despite delivery over the open internet and installation by endusers.

They must standardise where appropriate to enable interoperability, but they must leave openpossibilities to innovate and as the industry matures and to enable differentiated products toencourage competition.

They must be adopted by the industry in their mainstream products, ensuring that the standardshave an impact and lead to economies of scale.

It was apparent at an early stage that existing standards were not sufficient to enable efficient residentialfemtocells, so new standards were needed. The Small Cell Forum is not a standards body in itself, so its roleis to work with relevant partners to:

Identify market needs Drive voluntary consensus where required to speed up the standards-setting process Encourage adoption of standards once published.

In order to encourage the standardisation of residential femtocells, Small Cell Forum established MarketRepresentation Partnerships with both 3GPP and 3GPP2 and set up a cooperation agreement withBroadband Forum .

5.2 Candidates and choices

An early requirement of new femtocells standards was to adopt an architecture appropriate to the needs. Inearly 2008 the Forum gathered and compared options favoured by its members and discovered anembarrassment of riches some 15 architectures and associated variants. While having such a wide rangeof options was encouraging in terms of having choice, it was also clear that there was a need to rapidlydrive consensus if the industry was to make progress.

A generic reference architecture was created in order to compare the various solutions, illustrated in Figure5-1. This identifies generic interfaces between the mobile device, the femtocell access point (FAP), theFemto Gateway (FGW), the core network and the Femto Management System.


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Figure 5-1 Small Cell Forum Reference Architecture

Having codified the various architectures in this way and compared their attributes, it was apparent thateach had its own merits and no one clear favourite was emerging. This created a significant risk, especiallywithin the 3GPP domain: operators had indicated that the architecture needed to be standardised in 3GPPsthen-current release 8, but the release was progressing and had a heavy workload given that it was the firstrelease of LTE.

5.3 Operator requirements

To assist in rapid and appropriate selection of a 3GPP 3G femtocell architecture, a group of leadingoperators in Small Cell Forum gathered together in early 2008 and set out their high-level requirements toas illustrated in Figure 5-2. Key amongst these was the need to have fewer choices and preferably just

one. It was also a central principle that a best-of-breed architecture should be adopted which combined thebest attributes of the available proposals rather than compromising on any issues.

Figure 5-2 Small Cell Forum Operator Requirements for 3G Femtocell Architectures

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uplink Circuit-switched multiplexing to improve bandwidth efficiency for multiple calls where theuplink is traditionally limited TS 25.444. Support for Cell Broadcast and Public Warning Systemswere also introduced in release 9.

Release 10 brought support for Local IP Access (LIPA) as a means for diverting some femtocelltraffic locally within the home where distribution over the core network is unnecessary andenhancements to HNB mobility management which included the definition of the Iurh as a logical

direct interface between HNBs. Release 11 has included work to expand TS 33.820 to include the security additions needed

when inter HNB and HNB to RNC connectivity is permitted and a further study item on enhancedmobility for HNBs (including additions to CSG mobility in different UE modes and a mechanismfor hand-in of legacy UEs from macrocells to HNBs).

Release 12 only foresees RAN-level work on 3G HNB as being work on cell reselection involvingCSG cells whilst the UE is in CELL_FACH state. Further work is anticipated on mobility under cellswhen LIPA or SIPTO (Selected IP Traffic Offload) is deployed in the Local Network and BroadbandAccess Interworking where Broadband Provider and Mobile Service Provider may cooperate onpolicy control and Quality of Service.

Figure 5-3 Overview of the timeline for 3GPP standards related to femtocells and SCFssupporting activities

By way of a summary of the current state of 3G femtocell standards within 3GPP, Figure 5-4 maps currentlyavailable 3GPP 3G femtocell related standards against the Forums reference architecture. This highlightsthe significant progress that has been made in standardising femtocell specific network elements andinterfaces in a UTRAN network at least.

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101 Release One Home Overview

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