050 SCF 2013Q1 Market Status+Report

Small Cell Market StatusFebruary 2013

Issue 1

© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com

22Contents

3 Executive summary

3 Definitions

3 Purpose of this Document

4 Market developments

4 Small-cell deployments and commitments

4 Market firsts

4 Market forecasts

6 Case study: NTT DoCoMo

6 Consumer femtocell deployments

6 Dual-mode HSPA/LTE femtocell

8 A message from the Chairman

9 Small Cell Forum activity update

10 Contact

Copyright

© 2013 Informa UK Ltd. All rights reserved.

The contents of this publication are protected by international copyright laws, database rights and other intellectual property rights. The owner of these rights is Informa UK Ltd, our affiliates or other third party licensors. All product and company names and logos contained within or appearing on this publication are the trademarks, service marks or trading names of their respective owners, including Informa UK Ltd and Small Cell Forum Limited. This publication may be freely circulated by Small Cell Forum and its members; however, it may not be commercially exploited without the prior permission of Informa UK Ltd.

Whilst reasonable efforts have been made to ensure that the information and content of this publication was correct as at the date of first publication, neither Informa UK Ltd nor any person engaged or employed by Informa UK Ltd accepts any liability for any errors, omissions or other inaccuracies. Readers should independently verify any facts and figures as no liability can be accepted in this regard - readers assume full responsibility and risk accordingly for their use of such information and content.

Any views and/or opinions expressed in this publication by individual authors or contributors are their personal views and/or opinions and do not necessarily reflect the views and/or opinions of Informa UK Ltd.


33

Executive summary• Severaloperatorshavereiteratedtheirsupportfor

public area small cells. AT&T announced that it will deploy 40,000 units by 2015, while Vodafone UK and Verizon are expected to start deploying in 2013. Other operators, including fixed, have announced coverage-driven small cell trials.

• Decemberlastyearmarkedthefirstlaunchofadual mode 3G/LTE femtocell by NTT DoCoMo which allows CS fallback and will be used to promote the migration from 3G to LTE. Orange France has also launched consumer femtocells, diversifying its small cell offerings.

• Thesmall-cellmarketisgrowingatarapidpace:The largest deployments have already reached 1 million active cells. Initial metrocell deployments are taking place while all the operators in several markets now offer femtocells.

• BothSKTandKThavelaunchedLTEsmallcellsforpublic access in South Korea.

• VirginMediaUKhasannouncedplanstoofferaSmall Cell as a Service (SCaaS) and has completed extensive trials in the UK. Colt Telecom, Cloudberry Mobile and Clearsky are also offering similar services.

• AccordingtoInformaTelecoms&Media’sestimates, the small cell market will generate US$22

billion during 2016, 73% of which will be driven by public area small cells.

• Thenumberofsmallcellsdeployedovertookthetotal number of macrocells between October and November 2012 and consumer femtocells overtook macrocells during February 2013.

• Thefemtocellmarketnowincludesseveraldeployments that reach well into hundreds of thousand units, including Vodafone, Softbank and SFR.Sprint’sdeploymentreached1millionunitsasofOctober2012andanalystsestimatethatAT&T’sdeployment has reached similar numbers.

• AsofFebruary2013,thereare46commercialservices and a total of 60 deployment commitments.

• TheSmallCellForumhasgrowntoinclude68mobile operators, representing 3 billion mobile subscribers worldwide, across multiple wireless technologies (WiMAX, UMTS and CDMA) and accounting for 46% of total mobile subscribers worldwide, plus 70 vendors, illustrating that the femtocell ecosystem is experiencing healthy growth.

DefinitionsIn this report, small cells are defined as wireless infrastructure equipment that operate in licensed bands, whichinclude:• Femtocells: Primarily deployed in consumer and

enterprise environments• Picocells: Deployed in indoor public areas (airports,

train stations, shopping areas)

Purpose of this DocumentThe Market Status Report provides regular updates on the status of small-cell market development as it pertains to service providers and small-cell ecosystem manufacturers, and also covers standards and regulatory aspects.

Informa Telecoms & Media is researching and producing this report on behalf of the Small Cell Forum. The news and analysis is based largely on news items submitted through the Forum by members and analyst houses, supplemented by research we have conducted through publicly available websites and sources.

The Small Cell Market Status Report has evolved in line with the evolution of the Small Cell Forum. Although initially covering femtocells alone, this Market Status Report currently covers the entire market, including public-area small cells.

Editorial control remains with Informa Telecoms & Media (see also copyright and acknowledgement sections at the end of the newsletter). Suggestions for contributions may be submitted to the contact details at the end of this report.


44• Microcells: Usually deployed in urban areas or

in cases where the footprint of a macrocell is not necessary

• Metrocells: Deployed in urban areas to alleviate capacity bottlenecks.

However, this list is not exhaustive and should only be used as a generic guideline to identify the nature of small cells. Small cells are described by their intelligent nature and borrow the characteristics that define consumer femtocells, including auto-configuration, environment sense, SON and many other intelligent characteristics not found in existing indoor technologies, including repeaters, picocells and Distributed Antennas (DAS).

In a way, small cells are described by being intelligent rather than being just a small version of macrocells (where intelligence may still reside in the mobile core network).

Market developmentsThe small-cell market is experiencing a flurry of activity, including mobile operators launching small cells and continuing to deploy picocells and microcells while vendors develop metrocell technologies for capacity offload.

Several operators have now reported deployments with 100softhousandsoffemtocellsincluding:• Sprint(US)hasreportedover1millionunitsduring

October 2012 and estimates indicate that it had deployed more than 1 million during end-2012.

• BothSoftbankandSFRhavereportedmorethan100K units.

• Vodafonehasreportedfemtocellregisteredusersinthe “hundreds of thousands” in the UK.

• AlthoughAT&Thasnotreporteditsnumbersdirectly, analyst estimates also put them near the 1 million mark.

Small-cell deployments and commitmentsAs the number of small-cell deployments continues to increase, several operators have now launched for both consumer, enterprise markets and in public areas for coverage and capacity enhancements (see fig. 1). Several of these markets are now subject to competition, where operators have identified small cells

as a competitive advantage and their competitors are launching small cells to address consumer demand.

As of February 2013, nine of the top 10 mobile operator groups (by revenue) are offering femtocell services, including AT&T, China Mobile, France Telecom/Orange, Telefonica, T-Mobile/ Deutsche Telekom and Vodafone among others. Small Cell Forum members include both Tier-1 and Tier-2 operators, which indicates that the business case for femtocells is not unique to the larger operators.

Amajortrendistoofferfreefemtocells:Softbank,SFR and Vodafone and Cosmote (both in Greece) now offerFAPsforfree.SFR’sexampleisinterestingascustomers do not need to fulfill ARPU requirements to qualify for a free femtocell.

Market firstsThe small-cell market has been active since 2007, when Sprint launched consumer femtocell services toimproveitscustomers’experience.Sincethen,several operators have pioneered new services and in new market segments and are accelerating the evolution of the small-cell market (see fig. 2). As the market is expecting the launch of the first public small cells, it is important to identify these early adopters.

Market forecastsInforma Telecoms & Media expects the small market to experience significant growth over the next few years. Informa’sforecastsforsmall-cellrevenues(February2013) indicate that public-area small cells will generate thelion’sshareoftotalrevenues,whichamounttoUS$22bn during 2016 (see fig. 3).

Fig. 1: Femtocell deployment segmentation according to target group

Target group Number of deployments Examples

Consumer 26 Vodafone UK, AT&T, Cosmote

Enterprise 6 T-Mobile UK, Network Norway, Orange France

Consumer and Enterprise

8 Vodafone NZ, Verizon Wireless, Sprint

Public 5 Vodafone Qatar, SK Telecom, TOT Thailand

Rural 1 Softbank (using satellite backhaul)

Source: Informa Telecoms & Media


55

In addition, many industry analysts who cover a number of aspects of the small-cell ecosystem have begun to track and forecast the progress of the small-cell market. The list that follows provides a summary of publicly-announced statements, sorted by reverse chronological order and with some information about eachannouncement:• Infoneticspredictsthataquarteroftotaltrafficwill

be carried over small cells (microcells, picocells and public area femtocells) during 2016. Infonetics alsolaunchedasurvey:86%ofsurveyedoperatorsare planning to backhaul small-cell traffic to nearby macro-cell sites. (Infonetics, January 2013)

• AnewreportbyMobileExpertsanticipatesashipmentvolumeofroughly8millionsmallcellsduring 2017. In addition, Mobile Experts predicts that half the small cells will incorporate Wi-Fi by 2016. (Mobile Experts, November 2012)

• Infoneticspublishedanewreportclaimingthatthe number of small-cell units sold is forecast to grow nearly 40-fold from 2011 to 2016, including 3G

microcellsandpicocells,4GminieNodeBs,and3Gand 4G public access femtocells. The company also expects global small-cell revenue to grow at a 73% compound annual growth rate (CAGR) during the five years from 2011 to 2016. (Infonetics, September 2012)

• Dell’OroGrouppublishedanewforecastclaimingthat the small-cell market will almost quadruple by 2016, which will have an impact on macro revenues. (Dell’OroGroup,September2012)

• JuniperResearchpublishedanewreportclaimingthat small cells will account for a steadily increasing proportion of offloaded data over the forecast period (2012-2016), reaching over 12% by 2016. North America and Western Europe will account for over 75% of global mobile data offloaded throughout the five-year period. (Juniper Research, June 2012)

• Infoneticspublishedanewreportclaimingthat,during 2016, 3 million small cells will be shipped and the market will be worth about US$2.1 billion. Infonetics also expects public-space femtocells to make up more than 50% of all small cells shipped in 2012 and 2013; 3G small cells will account for 63% of global small-cell shipments, with 4G small cells kicking off and ramping up rapidly to make up 37%. (Infonetics, March 2012).

• MobileExpertspublishedanewforecastclaimingthat 70 million small cells will be shipped by 2017, including femtocells deployed by mobile operators and picocells used for high-capacity urban networks. LTE small cells are a major part of the forecast growth over the next five years, with more than two-thirds of small cells deployed in 2017 devoted to LTE-FDD or TD-LTE. (Mobile Experts, February 2012)

Fig. 2: Small-cell industry firsts

Service or technology Operator Date

First launch Sprint Wireless (US) September 2007

First enterprise launch Verizon Wireless (US) January 2009

First public safety launch TOT (Thailand) March 2011

First standardized launch Mosaic (US) February 2012

First LTE femtocell SK Telecom (South Korea) June 2012

First million deployed Sprint Wireless (US) October 2012 (estimate)

First location-based service

Vodafone (Greece) December 2012

First dual-mode 3G/LTE NTT DoCoMo (Japan) December 2012


Rev

enue

(US

$ bi

l.)

0

5

10

15

20

25

Public areaEnterpriseConsumer

20162015201420132012

Fig. 3: Global, small-cell revenue forecasts, by category, 2012-2016

Note:Figuresrefertoyear-endSource: Informa Telecoms & Media


66

NTT DoCoMo is the mobile arm of the incumbent operator NTT and is the leader in the Japanese mobile market. NTT DoCoMo offers a variety of services, including UMTS, i-mode and, most recently, LTE. The operator holds almost 50% market share in the highly competitive Japanese market and is considered a global innovator for technologies and business models.

The Japanese market is one of the most advanced and competitive environments in the global landscape where 2G has already been switched off in favor of 3G and now LTE. It is not surprising that smartphone penetration is expected to reach 50% during 2013, making the Japanese subscriber base one of the most data-aware in the global market.

As with most Japanese mobile operators, NTT DoCoMo has employed a variety of technologies to improve indoor reception in a very dense urban environment with ahighpopulationconcentration:boosters,repeaters,DAS and, most recently, small cells.

Consumer femtocell deploymentsIn November 2009, NTT DoCoMo became the first operator in Japan to launch consumer femtocells with WCDMA/HSPA connectivity and allowing simultaneous use for a maximum of four subscribers. The femtocell allows download speeds of up to 14Mbps (HSDPA) in the 2.1GHz spectrum band.

In such a dense urban environment, it is natural that NTTDoCoMo’sfemtocelleffortshavebeencoverage-driven and continue to be offered for the same reason now. NTT DoCoMo had already invested in indoor 3G coverage before femtocells and considers the technology as complementary to its existing indoor solutions (mainly DAS). The operator is now deploying LTE and it is expected that the new technology will have priority over 3G.

NTT DoCoMo reports that femtocells have been valuable in areas where DAS are not cost effective. Despite the wide deployment of DAS in public areas and large buildings in Japan, it is not ideal to extend these in smaller environments, as the high capex requirement for DAS usually does not provide a positive business case. Therefore, NTT DoCoMo has chosen small cells – in this case, femtocells – to augment the user

experience in the home and small office/home office (SoHo) environments. This has been successful so far,

and an added benefit of the femtocell deployment is that traffic is offloaded from the congested macrocell when users are indoors.

Dual-mode HSPA/LTE femtocellAlthough NTT DoCoMo has been a pioneer in the Japanese market when launching consumer femtocells, it is now a global leader by offering dual-mode WCDMA/LTE femtocells which will be used for enhancing LTE coverage. The new unit was launched during December 2012 and is being considered as network equipment. In other words, NTT DoCoMo is expected to deploy a unit when a customer does not have adequate LTE coverage.

The femtocell unit is not much different from a typical 3G femtocell (see fig. 1).

The femtocell allows up to seven simultaneous users for LTE and four for WCDMA. It requires a optical-fiber connection for backhaul. Although operators that have deployed 3G femtocells do not place similar requirements for backhaul, an LTE small cell has higher requirements in order to operate effectively. Having xDSL backhaul for the LTE femtocell would create a bottleneck and possibly degrade the user experience, potentially giving the femtocell service a worse performance compared with the macrocell network.

The LTE femtocell can help NTT DoCoMo achieve a faster migration from 3G to LTE, a strategic objective.

Case study: NTT DoCoMo

Fig. 1: NTT DoCoMo's dual-mode HSPA/LTE femtocell

Source: NTT DoCoMo


77However, achieving a high percentage of national coverage for LTE is challenging and LTE femtocells can help accelerate the migration to LTE without the costly option of DAS for the home and small-business environments. NTT DoCoMo also claims that the LTE femtocell is to be used for enhancing coverage only, although offload is expected to happen naturally as the femtocell deployment progresses.

A peculiarity with this LTE small-cell deployment is the necessity of a 3G module for voice. As VoLTE is not yet mature, NTT DoCoMo has chosen CS Fallback for LTE voice which uses the WCDMA network through the femtocell.Bydoingso,bothdataandvoiceservicesare catered for, but remain future-proof when VoLTE handsets are mature. Moreover, the dual-mode femtocell can provide a better user experience for 3G subscribers and can remain in the same environment when these subscribers upgrade to LTE.


88

The small-cell industry is set to shift up a gear in 2013 as small cells spill out of homes on to the streets, shopping centers and enterprises. However, at the same time it faces a critical challenge. While big operators in developed markets are rolling out the technology, how do we help smaller and more conservative operators in all different markets get on board too?

While analyst predictions for small-cell shipments and revenues vary, they all have one thing in common – rapidgrowth.Informa’slatestpredictionthatthemarketwill grow rapidly to hit US$22 billion in 2016 with the lion’ssharecomingfromnewpublicaccesssmallcellscontinues this trend.

Over the last three months, major operators like AT&T, Verizon and Vodafone have all talked up impending metrocell rollouts showing that the appetite for small cells beyond the home is clear. These developments reinforce an Informa survey from December last year whichfoundthat98%ofoperatorsthinksmallcellsareessential to the future of their networks.

However, to date, the 46 operators to have rolled out the latest small-cell technology are largely big, innovative operators in developed markets. If the small-cell industry wants to meet its most truly transformative potential, it needs to be adopted by hundreds more. These include smaller and conservative operators in developed markets that have waited for the market and technology to prove itself, as well as the vast numbers of operators in developing markets.

To help speed deployments, the Small Cell Forum has just launched a Release programme that provides operators with everything they need to know to profitably rolloutsmallcellswithminimalrisk.We’vepublishedRelease One, which provides substantial technical and business case support to operators that have waited to deploy residential small cells until the market and technology were proven while also publishing new cutting-edge documentation to assist operators planning enterprise, metro and rural rollouts.

Release One provides all the business case and technical detail, including recommended equipment specifications for RFPs, together with best practice from the operators which have successfully deployed

femtocells in scale. It also contains cutting-edge information aimed at assisting new enterprise, metro and rural deployments, including two major new white papers which prove that backhaul will not hold back public-access deployments and that rural small cells can be profitably rolled out in both developed and developing markets.

Forthcoming releases over the next 12 months will contain major updates on enterprise small cells and metrocells. These will include lessons from the deployments currently taking place as well as evolving approaches and standards. Subsequent releases will continue the theme of guiding rollouts with major updates to rural and multi-technology small cells that intelligently integrate 3G, LTE and Wi-Fi.

Ifyou’dliketocheckouttheReleaseprogrammethenplease visit our dedicated site – scf.io. Let us know what you think.

A message from the Chairman


99

The Small Cell Forum announced Small Cell Release One. This is the first deliverable in its Release programme, which helps operators by providing all the information they need to successfully launch the technology in one easily digestible package. The theme of Release One is the Home, providing the complete body of work that operators will need to know in order to deploy residential femtocells. Release One also contains significant advanced work on future releases, including enterprise, metro, and rural small cells.

Small Cell Forum activity update


1010

ABOUT INFORMA TELECOMS & MEDIAInforma Telecoms & Media is the leading provider of business intelligence and strategic marketing solutions to global telecoms and media markets.

Driven by constant first-hand contact with the industry, our 65 analysts and researchers produce a range of intelligence services including news and analytical products, in-depth market reports and datasets focused on technology, strategy and content.

Informa Telecoms & Media Editor – Dimitris Mavrakis, Principal [email protected]

Informa Telecoms & Media – Head OfficeMortimer House, 37-41 Mortimer StreetLondonW1T 3JHUK

AcknowledgmentInforma Telecoms & Media acknowledges with thanks the news items and contributions submitted by Small Cell Forum members and Analyst Houses through the intermediary of the Small Cell Forum.

ABOUT THE SMALL CELL FORUMThe Small Cell Forum (www.smallcellforum.org), supports the wide-scale adoption of small cells. Small cells are low-power wireless access points that operate in licensed spectrum, are operator-managed and feature edge-based intelligence. They provide improved cellular coverage, capacity and applications for homes and enterprises as well as metropolitan and rural public spaces. They include technologies variously described as femtocells, picocells, microcellsandmetrocells.TheForumhasinexcessof140membersincluding68operatorsrepresentingmorethan3 billion mobile subscribers – 46 per cent of the global total – as well as telecoms hardware and software vendors, content providers and innovative start-ups.

[email protected]

The Small Cell ForumPOBox23DursleyGL11 5WAUK

Small Cell Market StatusAppendix – February 2013

Issue 1


22Contents

3 Purpose of this Document

4 Operator activities

4 Small-cell deployments

9 Pricing models

9 Competitive landscape

9 Small Cell Forum members

9 Ecosystem – industry support

12 Standards development

13 Regulatory developments

14 Contact

Copyright

© 2013 Informa UK Ltd. All rights reserved.

The contents of this publication are protected by international copyright laws, database rights and other intellectual property rights. The owner of these rights is Informa UK Ltd, our affiliates or other third party licensors. All product and company names and logos contained within or appearing on this publication are the trademarks, service marks or trading names of their respective owners, including Informa UK Ltd and Small Cell Forum Limited. This publication may be freely circulated by Small Cell Forum and its members; however, it may not be commercially exploited without the prior permission of Informa UK Ltd.

Whilst reasonable efforts have been made to ensure that the information and content of this publication was correct as at the date of first publication, neither Informa UK Ltd nor any person engaged or employed by Informa UK Ltd accepts any liability for any errors, omissions or other inaccuracies. Readers should independently verify any facts and figures as no liability can be accepted in this regard - readers assume full responsibility and risk accordingly for their use of such information and content.

Any views and/or opinions expressed in this publication by individual authors or contributors are their personal views and/or opinions and do not necessarily reflect the views and/or opinions of Informa UK Ltd.


33Purpose of this DocumentThe Market Status report provides regular updates on the status of small-cell market development as it pertains to service providers and small-cell ecosystem manufacturers, and also covers standards and regulatory aspects.

Informa Telecoms & Media is researching and producing this report on behalf of the Small Cell Forum. The news and analysis is based largely on news items submitted through the Forum by members and analyst houses, supplemented by research conducted through publicly-available websites and sources.

The Small Cell Market Status Report has evolved in line with the evolution of the Small Cell Forum. Although initially covering femtocells alone, this Market Status Report currently covers the entire market, including public-area small cells.

Editorial control remains with Informa Telecoms & Media (see also copyright and acknowledgement sections at the end of the newsletter). Suggestions for contributions may be submitted to the contact details at the end of this report.

This report acts as an Appendix to the main report and represents quantitative information about the small-cell market.


44

Fig. 1: Femtocell commercial deployments as of 4Q12 (47 in 25 countries)

Company Country Offering Example Pricing Capabilities Launch date

1 US Consumer and Enterprise: Airave

US$4.99 per month (US$10 for unlimited calling, US$20 for family plans)

Up to six users Sep-07

http://bit.ly/sprint_us

2 Singapore Consumer: Home Zone (UMTS)

S$32.1 per month Up to four users Nov-08

http://bit.ly/starhub_singapore

3 US Consumer and Enterprise: Network Extender

US$249.99 Up to three users Jan-09

http://bit.ly/verizon_us

4 UK Consumer: Sure Signal (UMTS/HSPA)

Various options: £50 upfront; Free for >£45 contracts

Up to four users Jul-09 (Access Gateway: Rebranded Jan-10

http://bit.ly/vodafone_us

5 US Consumer: 3G MicroCell US$159 Up to four 3G users Sep-09

http://bit.ly/ATT_us

6 France Consumer: Home 3G (UMTS/HSPA)

199 upfront Up to four 3G users Nov-09

http://bit.ly/sfr_france

7 Japan Consumer: My Area (UMTS/HSPA)

US$10 per month Up to four 3G users Nov-09

http://bit.ly/docomo_japan

8 China (Northern Provinces)

Consumer: 3G Inn (UMTS/HSPA)

FAP cost: CNY1,200. Monthly fee: CNY10

Up to four 3G users Nov-09

http://bit.ly/china_mobile

9 Portugal Consumer: Sinal On (UMTS)

e99.99 upfront. e7.80 monthly Up to four 3G users Dec-09

http://bit.ly/optimus_portugal

10 Singapore Consumer: CallZone (WCDMA)

Access point: S$323Monthly charge: S$53.50

Up to four 3G users Jan-10

http://bit.ly/singtel_singapore

11 Spain Consumer: Voz y Datos Premium Oficina (WCDMA)

e15 per month Up to four 3G users Jun-10

http://bit.ly/vodafone_spain

12 Japan Consumer: Femtocell service (WCDMA)

Free of charge Up to four 3G users Jun-10

http://bit.ly/softbank_japan


Operator activitiesSmall-cell deployments


55Fig. 1: Femtocell commercial deployments as of 4Q12 (47 in 25 countries)


13 Qatar Public: Femtocell service in public areas (WCDMA)

Metro coverage Up to four 3G users Announced Jun-10

http://bit.ly/vodafone_qatar

14 Japan Consumer: au Femtocell (CDMA2000 1xEV-DO)

Free of charge (in coverage deadspots)

Up to four 3G users Jul-10

http://bit.ly/KDDI_japan

15 Greece Consumer: Vodafone Access Gateway

Free of charge (> e40 monthly contract) e75 (<e40 monthly). e150 retail price

Up to four 3G users Jul-10

http://bit.ly/vodafone_greece

16 Spain Consumer: Mi Cobertura Movil

e9/month service charge. Requires 3MB DSL service from Movistar

Up to four 3G users Aug-10

http://bit.ly/movistar_spain

17 UK Enterprise: Femtocell services for business customers

Oct-10

http://bit.ly/t-mobile_UK

18 Moldova Consumer: Femtocell Unite

Femtocell tariff add-ons: Unlimited 3G voice, network, Internet

Up to four 3G users Nov-10

http://bit.ly/moldtelecom

19 South Korea Public: Femtocells for data offload

Deployed in public areas Up to four 3G users Dec-10

http://bit.ly/sktelecom_kr

20 New Zealand Consumer and Enterprise: Sure Signal

Home AP cost: NZ$349 Enterprise AP cost: NZ$1033.85

Home: Up to four users. Enterprise: Up to 16 users

Jan-11

http://bit.ly/vodafone_nz

21 Ireland Consumer: Sure Signal e49 for Vodafone DSL customers, e99 for rest

Up to four 3G users Feb-11

http://bit.ly/vodafone_ireland

22 Norway Enterprise: Full Dekning NOK99 Up to four 3G users Feb-11

http://bit.ly/network_norway

23 Thailand Public: Disaster areas: 2G femtocells deployed in disaster areas

Mar-11

http://bit.ly/tot_thailand

24 Australia Consumer: Homezone Monthly fee of AU$5-10 (includes free calls)

Up to four users Apr-11

http://bit.ly/optus_au

25 Australia Enterprise: Vodafone Expand

Unknown Two models: Small (up to four users), Large (up to 16 users)

May-11

http://bit.ly/vodafone_au





26 Russia Consumer: Minicells Free Up to four users May-11

http://bit.ly/megafon_ru

27 Italy Consumer and Enteprise: Booster PrivatiBooster

Consumer: e240 Enterprise: e780 Consumer/Enterprise: Up to 4/8 users

May-11

http://bit.ly/vodafone_it

28 Hungary Consumer and Enterprise: Mini Bázis

Consumer: HUF165 Enterprise: HUF640

Consumer/ Enterprise: Up to 4/8 users

May-11

http://bit.ly/vodafone_hg

29 France Consumer and Enterprise: Couverture Site Confort

Free for consumer Enterprise Upfront fee: e1,400 monthly fee: e70 multi-FAP plans available

Up to four users May-11

http://bit.ly/orange_fr

30 Romania Enterprise: Extra Signal Upfront fee: e500 Up to 16 users May-11

http://bit.ly/orange_ro

31 Russia Consumer: Reliable Access Unknown Up to four users May-11

http://bit.ly/mts_ru

32 Czech Republic Consumer: Private 3G Zone Upfront fee: CZK3,377 Up to four users Jul-11

http://bit.ly/vodafone_cz

33 Russia Enterprise Unknown Up to eight users Aug-11

http://bit.ly/beeline_ru

34 Netherlands Enterprise: Sinaal Plus Unknown Up to four users Oct-11

http://bit.ly/vodafone_nl

35 Greece Consumer: Perfect Signal Upfront cost: e90. Discounts for postpaid subscribers

Up to four users Oct-11

http://bit.ly/cosmote_gr

36 Romania Unknown Unknown Unknown Unknown

Presented by Vodafone during Base Station Conference, September 2011

37 Portugal Consumer: Sinal Max FAP cost: e149 Up to four users Jan-12

http://bit.ly/vodafone_PT

38 US Consumer: Homecell US$9.95 per month. FAP: US$199.95, US$99.95 or US$49.95 depending on contract length

Up to four users Feb-12





39 France Consumer: Freebox Bundled with STB Unknown Feb-12

http://bit.ly/free_FR

40 UK Consumer: Home Signal Free for certain customers Up to four users Feb-12

http://bit.ly/three_UK

41 China Unknown Unknown Unknown May-12

http://bit.ly/CMCC_China

42 Bahrain Consumer: Zain Cell Free of charge Up to eight users May-12

http://bit.ly/Zain_Bahrain

43 UK Public area Open access Unknown Jun-12

http://bit.ly/UK_SCWS

44 France Unknown Unknown Unknown Jun-12

http://bit.ly/bouygues_FR

45 Germany Consumer and enteprise: Sure Signal

Consumer: e1 upfront and e17.73 monthly. Enterprise: e285.48 upfront and e47.48 monthly

Consumer: Up to 8 users Enteprise: Up to 28 users

Aug-12

http://bit.ly/vodafone_DE

46 Greece Public area: Free 3G hotspot Free data traffic in Flocafe cafeterias and Goody's fast-food restaurants

Dec-12

http://www.vodafone.gr

47 UK Enterprise: Signal Box Variable pricing models, either upfront fee or monthly charge

Up to 16 users

http://bit.ly/vodafone_DE


Fig. 2: Small-cell deployment commitments

Operator Country Details

US Intention to deploy an IMS-based femtocell network

United Arab Emirates Intention to deploy a femtocell to improve coverage and capacity

Taiwan Intention to deploy femtocells after regulatory approval. All three operators in Taiwan report that they will offer femtocell services with subsidies.



88Fig. 2: Small-cell deployment commitments

Operator Country Details

Turkey Intention to deploy Iu-h femtocells, pending regulatory approval

United Arab Emirates Intention to deploy femtocells during 2011 to bridge fixed and mobile services

US Intention to deploy femtocell services

UK Intention to deploy femtocells for both consumer and enterprise segments, service listed as “pre-launch”

Kuwait Intention to deploy femtocell services for consumer and enterprise customers

Israel Intention to deploy femtocells

France Bouygues’ CEO has claimed that femtocells will help the operator to improve the indoor coverage for LTE networks

South Korea SK Telecom has developed LTE femtocells and is planning to deploy them for increasing coverage

US Intention to deploy femtocells

Russia Intention to deploy femtocells for enterprise customers during 1Q12

Norway Intention to deploy 3G small cells throughout its footprint and potentially 4G small cells

US Intention to deploy small cells for public areas following initial LTE deployment.

Spain Intention to deploy consumer and enterprise femtocells.

Canada Intention to deploy femtocells during 2012.



99Fig. 3 shows the increasing numbers of deployments and commitments.

Operators continue to identify a number of major user segments for femtocell and also some exciting service scenarios. In the past, all femtocell deployments were focused on consumer deployment, so it is significant to see that several operators have now specifically commercialized a femtocell service for enterprises. Everything Everywhere launched enterprise femtocells during January 2013 and Orange France has launched consumer femtocells in addition to its previous enterprise launch.

From a regional perspective, the distribution of femtocell service deployments is expanding each year in all regions (see fig. 4). Tier-1 mobile operators have expressed the view that LTE and subsequent high-capacity air interfaces are most likely to be deployed through hierarchical cell structures, including femtocells. The publication of the 3GPP and WiMAX Forum standards for LTE and WiMAX femtocells, respectively, is a key enabling factor towards this.

Pricing modelsAs the femtocell market evolves, a variety of pricing models – for both consumer and enterprise markets – have surfaced (see fig. 5), which illustrates that mobile

operators are active in assessing the business case of femtocells and applying it to their regional environment.

The majority of consumer femtocell services rely on a low upfront fee. On the other hand, enterprise deployments are subject to high costs (e.g., Orange France charges an upfront fee of €1,100 and a monthly fee of €70 for an enterprise femtocell) but these costs are justifiable since femtocells are installed by the operator and technicians perform on-site visits and surveys to select the best location for installing the femtocells. In addition, enterprise femtocells are bigger units compared with consumer units, which may also increase the cost considerably.

Notable examples are Optus, Mold Telecom and Sprint, which are offering bundles that can be applied to their femtocell services to offer unlimited voice, data or messaging in return for a monthly fee.

Competitive landscapeSeveral markets across the globe are now subject to femtocell competition, where more than one mobile operator has launched femtocells (see fig. 6).

Small Cell Forum membersThe operator members of the Small Cell Forum currently account for more than 3 billion mobile subscribers worldwide (46% of the global total) across multiple wireless technologies (WiMAX, UMTS and CDMA).

Fig 7. lists the mobile operators that are members of the Small Cell Forum; for updated information on its members and their activities, please see the Small Cell Forum member listing.

Ecosystem – industry supportThe small-cell ecosystem continues to grow in both breadth and depth as the femtocell market transitions

Fig. 5: Selection of pricing models for femtocell services

Market Pricing model Deployment examples

Consumer Add-ons for unlimited calling

MoldTelecom, Sprint, Optus

Free femtocell Softbank, Vodafone (GR), SFR

Low upfront fee Vodafone (UK)

High upfront fee Vodafone (Italy, Hungary), Verizon

Monthly fee Sprint, Movistar, NTT DoCoMo

Enterprise High upfront fee All operators


Fig. 4: Commercial femtocell service launches by geography and technology, as at 4Q12

Regional view UMTS femtocell launches CDMA femtocell launches

Asia Pacific 9 (8 FDD and 1 TDD) 1

EMEA 34 –

Americas 2 2


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Fig. 3: Femtocell service deployments and commitments, cumulative totals, 1Q10-3Q12

Note: Figures refer to quarter-endSource: Informa Telecoms & Media


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from the early-adopter phase to early-market growth and a broader range of vendors developing technologies for small cells join this value chain. The small-cell ecosystem can be segmented by: • End-to-endsolutionproviders: Vendors that provide

a complete femtocell solution which includes femtocell access points (FAPs), femto gateways, necessary middleware and other parts that complete a large-scale femtocell deployment. This segment includes NSN, ip.access, Cisco and Alcatel-Lucent.

• Small-cellaccess-point(FAP)providers: Vendors that offer FAPs directly to operators or through other partners. This segment includes Ubiquisys, ip.access, Airvana and Netgear.

• Core-networkproviders: Vendors that focus on provisioning femtocells in the mobile core network. This segment includes Kineto Wireless and Spidercloud.

• Softwareandcomponentproviders: Vendors that focus on specific parts of the femtocell software stack or provide the necessary silicon to power FAPs. This segment includes Picochip, Percello, Continuous Computing, Texas Instruments and Qualcomm.

• Others: These include test and certification houses, research institutes and other enablers that may focus indirectly on femtocell operations.

Fig. 7: Small Cell Forum mobile-operator members

Source: Small Cell Forum

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Fig. 6: Femtocell competitive markets, 4Q12


1111It is common for vendors to focus on more than a single market segment, especially the end-to-end providers that may offer specific parts of a femtocell deployment on a stand-alone basis.

There are 70 vendors in this ecosystem today focusing on products and services in the emerging femtocell marketplace. There are nine providers of end-to-end and system integration worldwide and 20 small-cell access-point providers covering most licensed spectrum types; their number is increasing rapidly as component manufacturers are introducing flexible reference platforms for femtocell access points. There are more than 20 equipment providers providing core network components and in excess of 23 component, software and tools vendors providing a healthy supply to various parts of the solution space (see figs. 8 and 9).

All the major infrastructure vendors have now joined the Small Cell Forum and there are also several smaller companies targeting smaller, specialist segments, including test and certification, small-cell-specific silicon and core network components.

End-to-end solution providers and system integratorsAt present there are nine providers of end-to-end femtocell systems worldwide. Solution providers made good progress throughout 2009 to early 2011 assembling trial and initial market solutions. All solution providers have committed to supporting open standards, especially the 3GPP Iu-h interface standard that was ratified during 2009. Several Tier-1 vendors are in this segment, including NSN, Alcatel-Lucent, Spidercloud, ZTE and Cisco. The presence of these Tier-1 vendors is evidence of the perceived potential of the market.

Small-cell access-point vendorsThere are currently 20 small-cell access-point vendors and between them they have more than 50 available or announced product offerings. These access-point solutions vary in both technology and integration with other broadband access technologies. Stand-alone and integrated CPE have already entered the market. Small-cell vendors have provided a variety of intelligent algorithms for interference mitigation and this is a critical turning point for mobile operator acceptance. These vendors are also starting to expand their product lines to enterprise and larger-area small cells, representing a healthy competitive development in a key part of the ecosystem.

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Fig. 9: Segmentation of vendors in the small-cell ecosystem


End to end system providers

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Fig. 8: Small-cell ecosystem, 3Q12



1212Core network providersThere are now more than 20 vendors that provide core-network components for small cells with several solutions covering security, provisioning and integration of the femtocell services into the existing mobile operator core network. The categories included in this section are security gateways, femtocell gateways (FNG or HNB-GW), convergence servers (e.g., MFIF) and HNB management.

Components, tools and software providersAn important factor contributing to rapid market development is a healthy ecosystem of component vendors, development and test-tool as well as protocol/system software. Silicon providers are continuously evolving hardware platforms to enable small-cell vendors to offer access points that are more efficient and capable of higher capacity.

Standards developmentThe majority of industry standards have ratified femtocells in their activities, including 3GPP, 3GPP2 and WiMAX. Standardization activities are taking place to enhance the operation of femtocells in these networks.

3GPP femtocell standardization3GPP Release 10 was frozen in March 2010 and its protocols were made stable during June 2011. Release 10 has introduced support for mobility enhancements for Home eNodeBs. The Stage 2 architecture for the enhancements was ratified in the RAN Plenary in December 2010; it introduced a new Iurh interface between the FAPs and supports soft and hard handover between femtocells. Other important additions to Release 10 include Self-Optimizing Networks (SON), Selective IP Traffic Offload (SIPTO) and Local IP Access (LIPA).

Proposals to consider new functionality, including support of Cell_FACH for HNBs and inter-CSG handover for HeNBs, were removed from the Release 10 work item and are now likely to be considered during Release 11.

Broadband Forum standardizationThe Small Cell Forum has worked with the Broadband Forum to standardize the inclusion of the ability to manage femtocell-based services; the Broadband Forum TR-196 “Femto Access Point Service Data Model” was published in April 2009. The Small Cell Forum announced the activity in this area in May with the publication of the Femtocell Services Release 1 API.

The Small Cell Forum guideline WT-262 is going to be issued as TR-262 from the Broadband Forum, making femtocell integration simpler in broadband networks.

3GPP2 femtocell standardizationThe 3GPP2 formal publication of femtocell specifications was published during March 2010. The technical specifications of the new standard are:• SIP/IMSisusedinthecorenetworktointegrate

femtocell services, allowing a variety of components from different vendors to interoperate.

• EnhancedSystemSelectionissupportedforimproved handset battery life, faster femtocell and macrocell system acquisition, improved handoff between femtocell and macrocell and femto-zone awareness.

• LocalandremoteIPaccessissupported,allowingpacket data traffic to be directly offloaded from femtocells to customers’ home networks, corporate intranets or to the public Internet. When mobile devices are operating outside the femtocell subsystem, the 3GPP2 specifications also include a remote-access capability to allow mobile devices to connect to the user’s IP network at home and exchange IP data with the home network via a secure remote tunnel.

The 3GPP2 specifications provide a complete security architecture that allows CDMA2000 femtocell networks to support large numbers of femtocells via standard commercial IPsec/IKEv2-based security gateways. The 3GPP2 security architecture and protocols are compatible with the security architecture for 3GPP radio-technology-based femtocell devices. This architecture not only protects system operators’ core networks, but also provides highly secure authentication of FAP devices using secure certificate-based mechanisms and protocols that are widely deployed and validated for security, robustness, manageability and scalability.

WiMAX Forum femtocell standardizationThe WiMAX Forum and the Small Cell Forum announced the publication of the first WiMAX femtocell standard in June 2010.

The specifications incorporate a security framework that allows WiMAX networks to support a large number of access points via standard commercial IPSec-based security gateways. This phase of specifications also contains simple SON capabilities to allow automatic


1313configuration of large numbers of femtocells. Future revisions will further enhance the SON capabilities to standardize automatic interference management between femtocells and macro base stations.

The standard also incorporates support for three usage models to support different deployment scenarios such as residential, enterprise and outdoor environments: • The“OpenModel”allowsthefemtocelltooperate

like a normal WiMAX base station by allowing anyone to use the service.

• The“ClosedSubscriberGroup(CSG)Closed”allowsa limited number of pre-allocated subscribers to use the femtocell.

• The“ClosedSubscriberGroup(CSG)Open”extendsthe previous model to allow the subscribers to add users themselves.

Regulatory developmentsIn April 2011, the Small Cell Forum issued the following short paper:• RegulatoryconsiderationsforLTEdeployments:The

Forum issued a short statement for the benefit of regulators that may be considering specific regulatory requirements for femtocells using LTE technologies. It emphasized that femtocells are fully encompassed in the 3GPP’s LTE standard and, as is the case with existing 3G femtocells, are fully managed by a licensed mobile operator via secure connections and management systems, allowing them to comply with relevant licensing conditions in the same fashion. It also highlighted the regulatory benefits of femtocells

including improved access to mobile services and improved spectrum efficiency thereby making the technology a key part of LTE rollouts. A full paper of femtocell regulatory considerations is available on the Forum’s website here http://www.smallcellforum.org/aboutsmallcells-regulatory-regulatory-activities.

• Cellularinterference–distinguishingbetweentypesofcellularboostersandfemtocells: The second update focused on the controversy surrounding the issue of interference caused by the use of cellular signal boosters in the US. It highlighted that, because certain specially-designed signal boosters can be deployed without causing interference issues, the controversy concerns the use of improperly-designed signal boosters. However, it also highlighted the distinction between boosters and femtocells which provide the virtues of specially-designed signal boosters but with the added advantage that they also significantly improve network capacity. Femtocells can provide mobile services in areas where cell capacity is under major strain – a situation which cell-boosting technology is fundamentally incapable of addressing.

In addition, several national and international regulatory bodies have taken specific steps to clarify issues of policy and regulation relating to femtocells. For example, in the US, the FCC organized a forum on October 28, 2011 that focused on indoor deployments of small cells. The forum discussed the technologies available, the potential business models and the economic impact of small-cell deployments.

http://www.smallcellforum.org/aboutsmallcells-regulatory-regulatory-activities

http://www.smallcellforum.org/aboutsmallcells-regulatory-regulatory-activities


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ABOUT INFORMA TELECOMS & MEDIAInforma Telecoms & Media is the leading provider of business intelligence and strategic marketing solutions to global telecoms and media markets.

Driven by constant first-hand contact with the industry, our 65 analysts and researchers produce a range of intelligence services including news and analytical products, in-depth market reports and datasets focused on technology, strategy and content.

Informa Telecoms & Media Editor – Dimitris Mavrakis, Principal [email protected]

Informa Telecoms & Media – Head OfficeMortimer House, 37-41 Mortimer StreetLondonW1T 3JHUK

AcknowledgmentInforma Telecoms & Media acknowledges with thanks the news items and contributions submitted by Small Cell Forum members and Analyst Houses through the intermediary of the Small Cell Forum.

ABOUT THE SMALL CELL FORUMThe Small Cell Forum (www.smallcellforum.org), supports the wide-scale adoption of small cells. Small cells are low-power wireless access points that operate in licensed spectrum, are operator-managed and feature edge-based intelligence. They provide improved cellular coverage, capacity and applications for homes and enterprises as well as metropolitan and rural public spaces. They include technologies variously described as femtocells, picocells, microcells and metrocells. The Forum has in excess of 140 members including 68 operators representing more than 3 billion mobile subscribers – 46 per cent of the global total – as well as telecoms hardware and software vendors, content providers and innovative start-ups.

[email protected]

The Small Cell ForumP O Box 23DursleyGL11 5WAUK

Documents

050 SCF 2013Q1 Market Status+Report