Operator’s dilemma! femtocell or WiFi ?

The growth of data centric devices is humongous and mobile data will roughly double each year from 2008 to 2013″[1].
According to Cisco average broadband connection generates 11.4 gigabytes of Internet traffic per month, or 375 megabytes per day. Reports from the early 4G mobile WiMAX based broadband networks from Russian and US has some analogous findings where their average traffic per customer is 10 Gigabytes per month [2]. I have earlier blogged about data projections for next decade and it looks like the Mobile Internet traffic will grow at a compound annual rate of at-least 50 percent.
By 2020 average mobile internet connection from 3G and 4G handsets will generate 22.5 Gigabytes of traffic, and internet centric device will generate 171.7 Gigabytes of traffic. [3]

The amount of traffic internet will generate would compel operators to offload data from their Macro Base station to indoor base stations. At least two solutions are on the table for operators, Femtocells and Wi-Fi offloads.  Both approaches solve the backhaul issue by using customer or 3rd party links (DSL,,MetroE, T1/E1, WISP or others).

WiMAX Femtocells are tiny mobile cell sites using the mobile operators licensed spectrum, supporting all devices and all services.  Thus WiMAX femtocells are a great way to extend coverage and create higher capacity.  If you want to extend data service in places where macro cell coverage is poor, a WiMAX femtocell could be an ideal candidate.  However, WiMAX operators also have an option of extending indoor coverage through Wi-Fi access points. We will examine aspects of WiMAX Femtocells and Wi-Fi for indoor coverage in this article.

Architecture and deployment ease

Femtocell based architecture will require all the management and data traffic to pass through ASN-GW and a security gateway to perform functionality of handovers and security procedures defined in IEEE 802.16e. On the other hand Wi-Fi based systems do not require data traffic to pass through any central location and has much flatter and architecture as compared to WiMAX femtocells. Of course there are associated advantages of using S-GW and ASN-GW in case of WiMAX femtocells.

Economics

The current prices of WiMAX Femto access points are 5 to 10 times higher than the level of prices which Wi-Fi devices have reached. Operators controlled femtocells will come across challenging business economics and retail customer might not be interested in buying WiMAX femtocells at the current price levels. I do not perceive huge demands of WiMAX femto access points in near foreseeable future and hence it would be very difficult for operators to push femto based solutions to their customers. In fact covering a particular building with operator controlled femtocells for providing higher capacity and coverage would face severe ROI challenge as the cost of WiMAX femto Access points and associated infrastructure is way too high as compared to Wi-Fi Access points.

Spectrum

I would definitely emphasize that the amount of data growth expected in the next decade would keep operators always hungry for spectrum. 83 MHz of Wi-Fi spectrum in 2.4 Ghz is ideal for operators to cater the mobile data demand generating out of indoor locations. The next version of wi-fi which is called 802.11n has support for MIMO and even data rates up to 300 mbps can be supported in these tiny access points. The cost of 802.11b/g and 11n devices is not significantly higher.

Worldwide I see operators demanding at least 30MHz of spectrum for BWA application in 2.3, 2.5 and 3.5 Ghz. Most the current WiMAX deployments are in reuse3, and I spot no spectrum left for operators for in building femtocells. In those scenarios Free Wi-Fi spectrum in 2.4 Ghz will in fact help operators to provide sufficient capacity generating from indoor usages.

Devices

The primary sources of mobile data demand are laptops, notebooks and smart phones. Laptops and notebooks have Wi-Fi connectivity.  Wi-Fi chipsets are prevalent and has almost 100% availability in laptops other internet centric devices. Wi-Fi has reached matured level of availability and WiMAX embedded devices will reach these levels in next 5-7 years. ABI research projected 1 billion Wi-Fi chips in 2011 and global shipment of Wi-Fi enabled cell phones to get doubled in between 2009 and 2011. Wi-Fi is not just prevalent in internet centric devices like Laptops and notebooks, actually 90% of the smart phones will be Wi-Fi embedded modules by 2014. The current Wi-Fi chipsets are very competitive in prices and Intel has plans to embed WiMAX+WiFi in their MID’s and all future internet centric devices. [4]
.Intel is ready to ship 6250 – kilmer peak chipsets which will have 2×2 11a/g/n and 16e wimax in 2.3/2.5 and 3.5 GHz. The 11n version is capable of supporting peak data rates up to 300 mbps. There next silicon (evanspeak, targeted for MID’s) which is will support all in one module of 1X2 11 agn , 16e , Bluetooth and GPS in 2.3, 2.5 and 3.5 GHz bands.

Roadmap

WiMAX release 1.5 will focus on WiMAX-WiFi-Bluetooth coexistence and forum is also addressing and evaluating handovers between Wi-Fi and WiMAX.[5]

Summary

PICO base station and Repeaters will continue to play important role in extending coverage, and generating additional capacity in WiMAX Networks [6].. The economics of deploying PICO base stations in enterprise buildings and commercial hubs is encouraging. However, WiMAX Femtocells looks challenging from business case and deployment perspective. I believe that Wi-Fi will continue to complement WiMAX networks and there are numerous other advantages associated with Wi-FI for retail consumers. We have already observed WiMAX+WiFi router introduced by Cealwire ( clearspot),yota(Yota egg) and UQ as demonstration of their capabilities. Operators must keep Wi-Fi in their access strategy in building next generations mobile data networks.

Thanks