Related work and activities

Business analysis of local and indoor networks

Analysis of local and networks and business scenarios has been presented for WiFi hot spots and private networks [215] [216] [217] [218]. Country studies for WiFi services have been presented for Switzerland [219], Sweden [42] and the United States [220]. The focus in these studies is on business models for the local operator, cost and deployment aspects are not covered.

These papers deal with business concepts including a multitude of actors but the focus is not on cooperation involving mobile network operators. WiFi with open access represents another form of operator cooperation where multiple service providers use the same infrastructure provided by a network provider [222] [223].

The WiFi Alliance introduced IEEE 802.x technologies for public access in the early 2000’s. WiFi business concepts like Boingo6_{, Wayport}7_{and theCloud}8_{have fo-}

cused on providing nomadic wireless Internet access to professional users at selected hot spots were a convenient temporary working environment was available [216]. This approach facilitated high prices. Later on owners of such hot-spots have started to provide the service as a complement to their main business.

In the early 2000’s a number of municipalities, in particular in the US, launched or supported the launch of public city WiFi networks and WiFi zones9 . Almost all of the US efforts did not reach the number of users necessary to support the business models. Detailed reports of commercial performance are not available.

A classification scheme of business models for public WiFi networks with inter- esting implications for multi-actor network operation was presented in [220]. The study describes different types of business models depending on what actor or ac- tors that own and/or control the local network. The actors can be the city, one private company or multiple cooperating companies.

The Femtoforum business oriented white papers mainly focus on small office and home environments and always in a single-operator context. However, offloading is described as one business case for femtocells10_.

An interesting discussion where the femtocell deployment is put into a wider context discussing LTE and mobile broadband is presented by Rækken [224]. The use of femtocells for public access driven by operators is proposed:

"Femtocells will play a more important role in LTE than in 2G and 3G. Even though the initial LTE deployment strategy would be to build coverage outside-in, as the usage increases a wiser coverage strategy could be to build capacity inside-out"

6_{http://www.boingo.com/}

7_{http://www.wayport.com/Home.aspx} 8_{http://www.thecloud.net}

9_{http://w2i.com/resource_center/the_w2i_report_weekly_newsletter/news/p/newsletterId_178/id_219} 10_{Femtocell cusiness case white papers, June 2009, February 2010, www.femtoforum.org}

4.2. RELATED WORK AND ACTIVITIES 87

Cost and capacity analysis

A large number of papers have been published in the area of joint macrocell and femtocell networks. However, most papers deal with mechanisms and technical performance rather than deployment strategies and capacity - cost performance. Throughput for different network scenarios has been presented in [195] and [196]. A comparison between open and closed access is presented in [196]. Data rates for indoor users served by macrocells and femtocells are compared in [198] and capacity and coverage statistics is presented in [199].

Analysis of cost structure and business cases for deployment of mobile broad- band services, based on 3G evolution (HSPA) and 4G (LTE), have been presented by Johansson [63] and Blennerud [162]. Femtocell cases are not discussed but an analysis of wide area networks complemented with local WLAN access points is presented in [63].

Analysis of femtocell deployment has been presented by Clausson, Ho & Samuel [192], by Markendahl, Mäkitalo & Werding [43], and in the business case white papers by Femtoforum [193]. The conclusions about the profitability of mobile broadband business differs in these papers but they have aspect in common. The assumptions regarding deployed capacity, amount of used spectrum and network costs are similar: use of HSPA type of technology, use of 5 MHz of spectrum and estimates of cost of radio equipment.

If we compare the resulting cost to capacity ratio used in these papers with estimates from LTE contracts late 2009 in the Nordic countries large differences can be identified11_{. The cost for radio equipment for a three sector site supporting}

20 MHz is well below 10 k€. The cost-capacity ratio for macro base station radio equipment is 20 - 40 times lower than assumed in the papers from 2007 and 2008. This has a large impact on the trade-offs between femtocell and macrocell networks [44], see section 4.6.

Femtocell performance and interference analysis

Performance in joint macrocell and femtocell networks has been analyzed in a num- ber of papers mentioned above [198], [196] and [195]. The last paper provides a overview of the different spectrum arrangements between macrocells and femtocells, and studies the performance in terms of the achievable throughput.

Interference management based on power control and performance in terms of capacity and coverage statistics is presented in [199]. Analysis of interference between macrocells and femtocells is presented in [191] for the case of open access. In [201] an analysis including open and closed access shows that in co-channel and in adjacent channel operation an adaptive power adjustment is required to manage the femto-to-macro interference in the downlink.

11_{http://www.telenor.com/en/news-and-media/press-releases/2009/telenor-to-replace-its-}

A 3GPP technical report [203] provides an analysis of different macrocell - femtocell interference scenarios considering open and closed access for WCDMA systems. It also provides guidance to handle interference such as power adjustment and inter-frequency handover in partial-co-channel scenarios. In 3GPP there is still ongoing work on interference management in LTE. Macro-to-femto interference is described in [204]. The proposed method is based on the coverage area of the femtocell, when it becomes too small, i.e. when it is close the macro BS, it changes to another carrier. Hence, and it is the femtocell users that are protected.

In [205] the authors compare open and closed access for WiMAX femtocells identifying a tradeoff between coverage and capacity gains, for instance when using closed access the capacity gain is higher but the coverage can be severely reduced in dense deployments. The higher flexibility in the spectrum domain provided by OFDMA allows more possibilities to avoid interference.

In [206] a joint power and subcarrier allocation scheme is proposed using a centralized radio resource management node that controls a group of Femtocells. In [207] subcarrier selection is proposed and evaluated by channel measurements and from reports from the core network. An autonomous carrier selection and frequency reuse mechanism for LTE advanced that allow femtocell deployment without prior network planning is described in [208].

Industry activities

Standardization is ongoing in 3GPP. WCDMA/HSPA femtocell are specified in release 9 and standardization of LTE femtocells is ongoing.

The Femto Forum organization (www.femtoforum.org) was founded in 2007 to promote femtocell deployment worldwide. The organization is said to be indepen- dent, technology agnostic and inclusive of all relevant stake holders. The Forum now has more than 120 members where more than 50 are operators. Other mem- bers are telecom hardware and software vendors, content providers and start-ups. Three main types of manufacturers can be identified12_:

• Independent Femtocell specialists like Ubiquisys, ip.access and Airvana.

• Traditional cellular equipment manufacturers such as Alcatel-Lucent and Huawei.

• Manufacturers of set top boxes and broadband modems (e.g. Netgear, Thom- son, Motorola) that may integrate femtocells in these types of products.

• Chip set manufacturers like Picochip and Octasic.

4.3. METHODOLOGY 89

4.3

Methodology

The research on wireless access in indoor and local networks reported in this chap- ter is based on work from 2003 until 2010 in a number of research projects. The research can be grouped into a number of phases or types, each with a different scope and objective. The problems to solve were different (in these cases e.g. to propose, to analyze, or to understand drivers) which resulted in totally different re- search approaches. In this section the different types of research work are described together with the related collection of the empirical data. The methods for analysis of network cost & capacity, actors and value networks are based on the approaches outlined in chapter 2 and used in chapter 3.

Different types of research and collection of empirical data

The research on local access networks started in the research project Low Cost Infrastructure (LCI) within the Affordable Wireless Services and Infrastructure (AWSI)program13. The focus was on low cost using new types of network architec- tures. Similar activities were initiated in the projects Ambient Networks (AN)14

phase 1 and Novel Access Provisioning (NAP)15_.

The objectives in these projects were to propose, describe and analyze new mobile network concepts [30] [32]. The results included different types of function- alities, interfaces, network architectures and to some extent cost structure analysis. In most cases no empirical data or real world requirements were collected. The results were based on research by and on discussions between the members in the project teams. Cost structure aspects were addressed by Johansson [142]. Value networks started to be described in both the LCI and AN project but no business feasibility analysis was conducted in this early phase.

The research was to a large extent focused on network elements located between a traditional base station and the user terminal. Examples are fixed relays, local access points and/or terminals with relaying capability. These strategies and use ofsmaller network elements could be used to reduce the amount of conventional and more expensive base stations.

In the LCI project these ideas were compiled into a common framework called the generic local access point (GLAP) [29]. It is interesting to note that the ideas about the access point with relaying capabilities now can be found at the market16_.

13_{AWSI was a Swedish SSF project with KTH, Telia and Ericsson} 14_{AN was an EU IST project with 40 partners in the telecom sector}

15_{NAP was funded by Vinnova with KTH, Stockholm School of Economics and PTS as partners} 16_{A number of mobile operators offer mobile broadband modems with a wireless WiFi router}

enabling local Internet access for a number of users. In the Nordic countries the operator Net1 (www.net1.se) offers this service for the CDMA 450 MHz network. In the UK both Voda- fone and Three offer theMiFI access point (www.shop.vodafone.co.uk/shop/mobilebroadband- devices/mobilewifi and www.3mobilestore.co.uk/mobilebroadband/mifi/)

Analysis of concepts for local access services, 2005-2007

Around year 2005 WiFi services started to be offered also for free or at a low cost. At the same time a number of new technical and business concepts with focus on access services in the local area or region were introduced. Both wireless and fixed broadband services were of interest for the NAP project. Interviews were conducted with many of these new players that presented new services. Many of these services included new business concepts for ownership, usage and payments.

• Telia Denmark offering mobile phone as fixed phone at home

• Spring Mobil offering enterprise telephony with mobile phones

• The train operator SJ offering Internet on train

• The hot spot operator theCloud offering WiFi services

• Glocalnet offering the public WiFi access service Glocalzone

• Fon offering public access to private WiFi networks

• Accelerate Wireless offering fixed broadband wireless access

In addition, broadband access to homes was offered by many local power com- panies and municipality network operators. Another example is Uppsala university acting as an ISP for students which could use the university broadband account in the student rooms provided by the local landlord.

Interviews were also done with three real estate companies and three Swedish banks. The questions here were if these actors were interested to enter the market for local access service. The underlying question was if these actors did indentify a business opportunity to exploit existing company assets in the form of buildings, customer relations and payment mechanisms, the answer was in all cases "no".

Interviews were conducted with providers of different access services, see table 4.1. The interview questions did focus on the service offer, the customer segment and the current situation for the company. The questions were organized in the following groups:

• Why did you start to develop and offer this service?

• How did you do when you launched the service?

• What partners or suppliers did you need?

• What experiences do you have so far? Pros and Cons?

All the interviews provided input for analysis of business drivers and obstacles. In addition, the growing understanding of relations, roles and responsibilities among actors formed the basis for the mapping of business roles and creation of actor network maps. This analysis was based on real world data and not on our own assumptions as was done in the previous projects.

4.3. METHODOLOGY 91

Company Position or Unit Accelerated Wireless CEO

FON Sweden Business development

Glocalnet Project Manager New Business Municipality network in Gävle Managing Director

Municipality network in Linköping Managing Director Municipality network in Nyköping Managing Director Municipality network in Umeå Managing Director Mälarenergi (Västerås) Managing Director Spring Mobil Managing Director

SJ Project manager Internet onboard The Cloud Nordic Country Manager

Telia Networks (Denmark) President

Uppsala University Manager IT Strategy dep. Table 4.1: Companies interviewed for local access services

Analysis of the femtocell concept, 2008-2010

When the femtocell concepts was introduced during 2007 the first impression was that the concept to a large extent already was familiar within my the research community at Wireless@KTH. Since a femtocell make use of cellular bands and is controlled by a mobile operator, another conclusion that was made was that the business case for operators was clear. A potential problem with competition from WiFi based services was identified.

However, it soon was evident that there were a number of problems and chal- lenges (potential show stoppers) associated with the femtocell concept, see section 4.4. In order to better understand these challenges discussions were initiated with telecom manufacturers and telecom operators, see table 4.2.

Company Department or Unit Ericsson Research

Ericsson Business development Huawei Research

KDDI (Japan) Industry Research &and Standards Nokia Siemens Networks Technology Marketing

Ofcom Spectrum management PTS Spectrum management Tele2 Network planning TeliaSonera Research

TeliaSonera Network planning

In the early stage questions to the vendors were about identified technical prob- lems, possible solutions and what type of functionality that was proposed in the 3GPP standardization. Questions about femtocell business cases and deployment strategies were directed to both vendors and operators. Later, the vendors and operators have been asked to provide feedback on the results and conclusions of the research. There has also been discussions with the national regulating agencies in Sweden and the UK about spectrum allocation.

Another result of the discussions with the industry was that the femtocell re- search was organized in a number of connected research areas, each represented by different types of competencies. Hence, research in the AWBA project17 was initiated within three different areas, these can also be recognized in the structure of this chapter: 1) Network deployment, cost and capacity analysis; 2) Interference analysis and spectrum allocation strategies; and 3) Business modeling and analysis.

Analysis of indoor solutions and deployment, 2009-2010

In order to analyze the technical and business feasibility of femtocell networks it was essential to develop some level of understanding about current indoor solutions, deployment strategies and business models. Hence, a number of actors have been interviewed about requirements, problems and different solutions, see Table 4.3.

A number of actors of different types have described their needs and solutions: Customers to operators, both facility owners and business customers, manufac- turers, operators and system integrators have provided answers on questions and feedback on initial results.

Company Position or Unit Jernhusen Project manager The Swedish Parliament IT manager

Uppsala University IT manager

Clue Business Development SpringMobil Marketing Manager

Tele2 Network planning Telia Network planning The Cloud Nordic Country Manager

Ericsson R & D Huawei R & D Powerwave Marketing Absolute Mobile Marketing MIC Nordic Marketing

Table 4.3: Companies interviewed about indoor solutions and deployment

17_{The Affordable Broadband Access (AWBA) project funded by Vinnova run 2007 - 2010 with}