How are femtocells enhancing CDMA networks?

The CDMA Development Group (CDG) and Femto Forum recently hosted a discussion on ‘How Femtocells are Enhancing CDMA Networks.”

James Person, COO, CDG was the moderator, while the panelists were Andy Germano, vice chairman, Femto Forum, Josh Adelson, director, Product Marketing, Airvana, and Sameer Lalwani, staff manager, Technology Valuation, Qualcomm.

Femto market update

Femto Forum

Presenting a market update on femtos for CDMA, Andy Germano, vice chairman, Femto Forum, said femtocells have arrived and are shaping up into a key tool for mobile broadband service delivery.

There are 58 operators covering over 1.5 billion mobile subscribers – 33 percent of the global total. There are also 77 providers of femtocell technology covering all aspects of the ecosystem.

He highlighted some critical industry data points. For instance, the O2 network has seen an 18-fold increase in data carried over the network last year. Next, wireless data traffic on the AT&T network has grown more than 5,000 percent over the past three years.

So, why are people deploying femtocells? What’s driving growth? Naturally, the explosion of Internet connected devices — iPads, iPhones, and the like, are driving growth. There has been an exponential growth of mobile data traffic as well. Further, more than 80 percent of the traffic is indoors, and very little percentage of the traffic is mobile.

A femtocell is a simple, low cost, easy-to-install cellular access point for homes (and offices and metro areas). It is able to deliver fast, reliable service to standard phones over licensed spectrum. Further, femtocell is supported in 3G and next-generation standards by 3GPP, 3GPP2, WiMAX Forum, Broadband Forum, etc.

The shape of mobile networks has changed as well. As a data point, the US earlier had 200,000 macrocell sites. Today, the number of femtocells is greater than the number of macrocells — 350,000 femtocell sites as against 256,000 macrocell sites.

CDG sees great opportunity for CDMA in India

Some time early this month, a very interesting development took place in Korea’s telecom market. The CDMA Development Group (CDG) reported that LG Telecom’s new CDMA2000 1x EV-DO Revision A (Rev. A) data service is flourishing in the Korean wireless services market, adding about 100,000 new data subscribers per month to its 3G data service, “OZ” (“Open Zone”).

The OZ service has already resulted in a 14 percent increase in data average revenue per user (ARPU) from the previous quarter and a total of 287,000 OZ subscribers at the end of July.

Launched in April 2008, OZ gained market momentum by offering Korean consumers full-featured handsets with the compelling benefits of wireless broadband data services. The OZ service includes full browsing on the open Internet and unlimited fast data downloads, all at a flat-rate price. LG Telecom will expand its OZ service offering with 10 or more OZ-capable mobile handsets before the year end.

I caught up with Perry LaForge, executive director of the CDG, to find out a bit about the success of Rev A, and a little bit more about the global CDMA scenario, ARPUs, and his views on India, invariably!

Giving his overview of the global CDMA market, he said that globally, CDMA is growing rapidly and the ecosystem is strong. We’re in the process of updating our numbers, but at the end of Q2 there were over 451 million CDMA subscribers worldwide, including 438 million CDMA2000 subscribers.

The EV-DO subscriber base grew from 65 million to 91 million over the past year, achieving a CAGR of 40 percent. Since the beginning of 2007, the number of commercial EV-DO Rev. A networks has also grown from three to 43, with another 35 being deployed.

CDMA continues to be the dominant technology in North America, while subscribership is growing fastest in Asian countries such as India and Indonesia. Additionally, the recently-restructured Chinese telecommunications sector has created a tremendous opportunity for CDMA with China Telecom.

Let’s see what kind of services does Rev. A bring to Korea and globally. LaForge added: “LG Telecom launched its flat-rate “OZ” mobile broadband service, which is enabled by Rev. A and has been immensely popular, bringing in more than 100,000 subscribers per month since April 2008.

“The connectivity enabled by Rev. A is opening up a whole new level of wireless services to operators around the world, including user-generated content/social networking, broadcast TV/multicasting, mobile commerce, push-to-X, mobile advertising, mobile commerce, enterprise productivity applications and public safety initiatives.”

So, how does the CDG foresee CDMA’s growth in India?

Certainly, CDG sees an incredible opportunity for CDMA growth in India, especially when mobile broadband EV-DO services become widely available. Commenting on the new 3G spectrum policy, LaForge said it allows CDMA operators to gain access to 2×1.25MHz 3G spectrum in the 800MHz frequency band is a welcome first step towards that goal.

He added: “We welcome the DoT’s announcement of the spectrum guidelines for 3G services and congratulate the DoT for opening up the IMT-2000 recognized bands of 450MHz and 1900MHz bands for 3G services, in addition to the 2100MHz band.

“Although no spectrum is currently available in the 450MHz and 1900MHz bands, we trust that they will soon be made available for bidding to maintain a level playing field with GSM operators.

“Just as the competitive forces of CDMA2000 1X stimulated the rapid growth of telephony penetration in India, we expect EV-DO will add the necessary impetus to take the growth of Internet penetration in the country to the next level.

“The CDG agrees with the recommended principles of using spectrum efficiently, ensuring technology and service neutrality, and establishing a level playing field through auctioning with a reserve price for allocation of 3G spectrum.”

Part two follows in the next blog.