Femtocells as a Tool for Data Off-Load November 18 th 2010 CDG-Femto Forum Live Webinar: How Femtocells are Enhancing CDMA Networks

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1 Femtocells as a Tool for Data Off-Load November 18 th 2010 CDG-Femto Forum Live Webinar: How Femtocells are Enhancing CDMA Networks Sameer Lalwani, Staff Manager, Qualcomm 1

2 Maximize End-User Value and Reduce Network Costs Enhanced Coverage Enhanced user Experience New Services, home tariffs and bundles Increased Capacity (reduce backhaul, site costs) Added End-User Value Reduced Churn New Revenue Reduced Cost Subsidy Model Attractive Femtocell offering 2

3 Data Usage Increasing Rapidly Majority of Voice and Data Usage Indoors By 2014, monthly worldwide mobile data traffic will exceed the total for all of 2008 ABI Research, August 2009 Mobile data expected to grow with compounded annual growth rate (CAGR) of close to 75% over the next 5 Years US Mobile Data Consumption Trends, January 2010, FROST & SULLIVAN Average MB per subscriber will increase with CAGR of 40% - 60% over the next 4 years Smartphones, Arms Race of Today & Future Issues, ABI Research, August % of all voice and data traffic indoor in Informa % - 70% of all mobile data traffic happens indoor Cisco Visual Networking Index: Global Mobile Data Traffic Forecast 2010 Femtocells are a low cost solution to increase indoor coverage, increase capacity and enhance user experience

4 % of Sites % of Sites Network Traffic Characteristics 30% 100% 25% 20% 15% 10% Dense Rural Suburban Urban Total 80% 60% 40% cdf pdf 5% 20% 0% Hour 0% 0% 10% 20% 30% 40% 50% 60% BH% Busy Hour For majority of sites is between 7:00pm to 11:00pm. Most people are indoors. Busy Hour % (%traffic during Busy Hour) For majority of sites is between 10% to 25%. Goal: Reduce Network Expense Reduce Busy Hour (BH) Traffic. Offload BH traffic generated by users who are indoors since they don't require mobility offered by WAN. Reduction in BH traffic translates to reduction in BTS, Backhaul, BSC expenditure. 4

5 % of Network Traffic Network Traffic Distribution: The rule 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% High Data Subs 0% 20% 40% 60% 80% 100% % of Subscribers Data Hogs 10% of highest users generate 70% of network traffic Disproportionate impact on Network traffic when compared to their count. Reducing traffic generated by Data Hogs reduces Total Network Traffic significantly 5 1. AT&T estimates that 35% of all smartphone users generate more than 200MB per month with 2% of these generating as much as 2 GB per month. Wireless 2. The top 1 percent of broadband connections is responsible for more than 20 percent of total Internet traffic. The top 10 percent of connections is responsible for over 60 percent of broadband Internet traffic, worldwide. Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update,

6 CDMA2000 Network Architecture & Benefits of Femto Macro Network Handset BTS BSC PDSN Internet Reduction in Traffic over Air Interface (Improved User Exp) Lower BTS Requirement (Lower NetEx) Lower Backhaul Requirement (Lower Opex) Reduced Processing & Traffic Req ( Improved User Exp) Femto Network Handset BTS/BSC functions Femto AP Internet Femto SeGW 6 BTS: Base Station PDSN : Packet Data Serving Node Femto SeGW : Femto Security Gateway provides Access authentication and IPSec connection

7 Traffic Offload Case Residential Femto Users Morphology Night Pops [Million] 3G Subs [Million] Operator Household [Thousand] # Femto [Thousand] Dense Urban Urban Suburban Operator Market Penetration : 35% 3G Device Market Share : 60% Households with Femto : 4% - 10% Femto per Household : 1 7

8 Site Count Impact of Increasing Traffic on Site Count Data Offloading 1,600 1,400 Site Count vs. Monthly Traffic/Sub 10MHz Spectrum Offloading data hogs to femtocell substantially reduces macro networks traffic. 1,200 1, Macro Cell Splitting Macro Cell Splitting In many areas, it is not possible to add more new sites leaving operators with very few options Delay Cell Splitting with Femto Macro Only 40% 60% High Data Subs with 80% Femto 100% Traffic (MB/Sub/Month) 10% of Total Subs are High Data Subs 8

9 Annual NetEx/Sub USD Impact of Site Count on NetEx Data hogs too costly 250 NetEx vs. Monthly Traffic/Sub 10MHz Spectrum 200 ~10% of subscribers use 70% to 80% of bandwidth % Saving in NetEx Femtocells substantially improve network economics NetEx/MB/Sub 2 for 1GB/Sub case is 40% lower when 60% of data hogs moved to Femtocells Macro Only 40% High Data 60% Subs with 80% Femto 100% Traffic (MB/Sub/Month) 9 Sources: 1: various operators 2: NetEx/Sub/Month Calculated using $/GB values for Today from Femtocells --- Natural Solution for Offload 3: Residential Femtocell Cost : $175, Amount paid by subscriber : $50, Gateway & provisioning cost : $50 4: Enterprise Femtocell Cost : $500, Gateway & provisioning cost : $100 5: White Paper : Femtocells: a cost-effective solution for network traffic offload available on request. NetEx : Depreciated Capex + Opex

10 Conclusion Femto s Can be Used to Delay Cell Splitting or the Need for Additional Carriers. Targeting Heavy Data Users Provides More Bang for the Buck. Femto Cost Recovery From Subscribers Would Result In Savings at Lower Traffic Levels 10

11 Questions? Connect with Us /contributors/prakash-sangam 11

12 12 Thank You