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Summary:

As super-fast, Long Term Evolution wireless networks are deployed, some are questioning whether carriers even need 4G femtocells to boost coverage in the home. A post this week over at Unstrung adds fuel to the debate by pointing out that with femtocells, bandwidth speeds are only […]

As super-fast, Long Term Evolution wireless networks are deployed, some are questioning whether carriers even need 4G femtocells to boost coverage in the home. A post this week over at Unstrung adds fuel to the debate by pointing out that with femtocells, bandwidth speeds are only as fast as their slowest link, which means the wired connection to the home in many places will likely be slower than the speeds offered via LTE wireless networks. In other words, the speeds offered by an LTE femtocell, which uses the wired broadband as its connection back to the Internet, could be throttled by the wired connection.

The median download speed in the U.S. is currently less than 3 Mbps, whereas industry experts expect LTE speeds to offer about 20 Mbps down. As carriers look to deploy LTE networks beginning in 2010, however, the case for 4G femtocells is murky. Major carriers in the U.S. have already started offering 3G femtocells to boost coverage in the home, but consumer adoption of femotcells remains unproven. Carriers are still trying to educate customers and figure out the right business models, and analysts are calling for femtocells and their subscription plans to be cheaper.

There’s also a question as to whether carriers — notably AT&T and Verizon, both of which have spectrum in the 700 MHz band — will even need 4G femtocells, given how well that spectrum penetrates buildings. On the speed side, even though ISPs are deploying fiber or wideband cable through DOCSIS 3.0, both of which offer speeds in excess of 50 Mbps, not every consumer will have access to such technology. If the spectrum over which LTE is deployed is robust enough to offer good coverage inside buildings, and the wired broadband slows network speeds, then a 4G femto doesn’t make sense.

That’s bad news for startups such as ip.access and Ubiquisys, which are banking on femtocells. The biggest driver for 4G femtocells may have to do with ensuring voice quality over an all-IP network. If that’s the case, then a 4G femtocell would have to be cheap for consumers, but a potentially pokey wired connection wouldn’t really matter.

  1. The Unstrung analysis isn’t very useful: LTE is a shared medium with 20 Mbps per cell, whereas wired broadband involves a lot less sharing, particularly if the last mile is DSL or fiber. Real LTE download speeds (using normal cells not femtocells) will probably be well below 5 Mbps in reality, particularly in busy areas. Femtocells also give you great coverage in the home, and help the mobile carrier get more voice/data usage while having the consumer pay for their own backhaul from femtocell to the carrier – these are far more important than reaching theoretical 20 Mbps bandwidth.

    LTE will also take at least 2-3 years to roll out, by which time the average wired broadband will be a lot faster.

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    1. Stacey Higginbotham Friday, April 17, 2009

      Richard, I hope you are right with your last statement.

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    2. Part of the point of a femtocell is that you don’t share your connection with other users on the network. You and your family get the cell all to yourselves, which means you really could get peak LTE data rates if you have sufficiently fast wired broadband for backhaul.

      To Stacie’s point about 700 MHz spectrum providing better in-building coverage, this doesn’t really solve LTE’s problem. The challenge with LTE is not so much in-building penetration as the need for small cells to maximize spectrum reuse. There’s not enough capacity in a large cell network for LTE to deliver on its promise of high speed data for all users. Hence the need for smaller cells (pico, or potentially even femtocells).

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  2. The value proposition for femtocells varies dramatically depending on local conditions and QoS is heaviliy dependent on the broadband backhaul. For example,in India, broadband is available to approx 5% of the population. In the US, broadband speed varies dramatically and penetration is relatively low (35%), whereas in (say) Japan, 100Mb+ is the norm, available to almost 100% of the population. Other parts of the developed world lie somewhere in the middle. I agree with the previous respondant that mass LTE is some way off and that broadband will improve over that time. However, it is vital to the MNOs that they understand what is happening in the backhaul as customers will contact the MNO rather than their ISP if there is a problem with the femtocell. Take a look at our web site for more information and access to our femtocell deployment guide. http://www.epitiro.com/Femtocells.html

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  3. Jesse Kopelman Thursday, April 16, 2009

    This whole thing is a misunderstanding of the difference between a femtocell and a picocell. Femtocells are what would be deployed in a home, while picocells are what you deploy in public areas or a corporate environment. In those environments, supporting LTE instead of or in addition to WiFi might actually be desirable. Backhaul in those environments is not going to be limited to consumer grade broadband. A Femtocell has the same range as a WiFi AP. WiFi already offers better speeds than LTE and devices that support it are commonly available. The business case for femtocells has nothing to do with data or LTE, it is strictly about voice.

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    1. Stacey Higginbotham Friday, April 17, 2009

      Jesse, in corporate environments, the preference has so far seemed to go toward Wi-Fi because the corporations perceive it as both free and soemthing they control rather than a carrier. But I think you’re arguing that a femtocell is pointless in the home except for voice, at which point the backhaul isn’t really an issue? And if we’re talking picocells, then they tend to be in places with access to faster backhaul, rendering the post moot?

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      1. Jesse Kopelman Friday, April 17, 2009

        Yes. The Unstrung post is moot. Femtocells are for home use, where data will be taken care of by WiFi. The only places where LTE would be preferable to WiFi are public areas and these are not the target for femtocells, but rather picocells, which would rely on carrier grade rather than consumer grade backhaul.

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    2. On the other hand, operators are saying that consumers find the faster data speeds compelling in their femtocell trials. About half of all mobile data is generated at home (despite the presence of PCs and TVs). Signals Research Group have just published a study that shows mobile data as an important component of the femtocell business case.

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  4. The major point in this article really isn’t new. LTE femtocells (at least for domestic use) aren’t likely to appear for some time because 3G femtocells will give excellent high speed data and high quality voice performance – LTE itself will be more relevant for solving highly congested outdoor hotspots or providing lower cost/longer range coverage in the US at the 700MHz band.

    This is why the industry has been pressing for consideration of LTE femtocells for outdoor usage (the LTE femtocell on each lampost scenario). As other comments have said, this may be considered by some as a picocell application (it’s an integral part of the operator’s network independent of customer premise equipment).

    The suggestion has been that domestic LTE femtocells will probably need to be dual mode 3G/4G and will not be widely deployed until the broadband speeds are increased. However, there would still be benefits in terms of lower latency for data sessions and aspects such as built-in self-optimisation. LTE standards have been designed with femtocells from day one, rather than being retrofitted as in 3G, which makes for a better system solution all round.

    More on LTE femtocells at http://www.thinkfemtocell.com/System/$70-dual-mode-HSPA/LTE-femtocell-by-2011.html and http://www.thinkfemtocell.com/Technology/LTE-Femtocells-coming-to-a-lamp-post-near-you-soon.html

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  5. Once again Stacie… you show your ignorance for all things broadband. You REALLY think LTE providers are going to be selling entry level consumers 20Mbps wireless connections when that is effectively what a shared cell is capable of carrying? That’s like saying cable modem providers (even docsis 2.0 based) provide 38Mbps services today (the effective throughput of a D2 downstream channel).

    It is really disappointing to see someone with so little knowledge and understanding of the broadband business and industry so often misleading your readers.

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    1. Stacey Higginbotham Friday, April 17, 2009

      dwhit, I don’t think consumers will be sold 200 Mbps wireless broadband unless they have sole access to their own cell tower. And I don’t day that in the article. However, I do think given the average broadband speeds in this country of less than 3 Mbps, that LTE could be constrained going over those pipes. The most conservative estimates for LTE speeds that I’ve seen are still 5 Mbps down (although since it hasn’t been commercially deployed these are still theoretical).

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  6. Once again Stacie… you show your ignorance for all things broadband. You REALLY think LTE providers are going to be selling entry level consumers 20Mbps wireless connections when that is effectively what a shared cell is capable of carrying? That’s like saying cable modem providers (even docsis 2.0 based) provide 38Mbps services today (the effective throughput of a D2 downstream channel).

    It is really disappointing to see someone with so little knowledge and understanding of the broadband business and industry so often misleading your readers.

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  7. Once again Stacie… you show your ignorance for all things broadband. You REALLY think LTE providers are going to be selling entry level consumers 20Mbps wireless connections when that is effectively what a shared cell is capable of carrying? That’s like saying cable modem providers (even docsis 2.0 based) provide 38Mbps services today (the effective throughput of a D2 downstream channel).

    It is really disappointing to see someone with so little knowledge and understanding of the broadband business and industry so often misleading your readers.

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  8. Stacie, 8 years after 3G started being rolled out in US, we still have very patchy coverage. are you more optimistic about broad LTE roll out?

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    1. Stacey Higginbotham Saturday, April 18, 2009

      Vinnie, i suppose the patchy coverage depends on your carrier. I get great 3G coverage in most cities and along many major highways. So yes, I am optimistic about LTE coverage, especially given the plans the carriers seem to have for it.

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  9. [...] on wired broadband connections. While GigaOM’s Stacey Higginbotham pointed out that femtocells have failed to find a business model, Lauer said he thought the problems with femtocells will be [...]

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