1

Femtocells as a Tool for Data Off-Load November 18th 2010

CDG-Femto Forum Live Webinar

How Femtocells are Enhancing CDMA Networks

Sameer Lalwani Staff Manager Qualcomm

2

Attractive Femtocell offering

Maximize End-User Value and Reduce Network Costs

New Services home

tariffs and bundles

Enhanced

Coverage

Increased Capacity(reduce backhaul site costs)

Enhanced user

Experience

Subsidy Model

Reduced CostReduced Churn New Revenue

Added End-User Value

3

Data Usage Increasing RapidlymdashMajority of Voice and Data Usage Indoors

Femtocells are a low cost solution to increase indoor coverage

increase capacity and enhance user experience

By 2014 monthly worldwide mobile data traffic will exceed the total for all of 2008

ndashABI Research August 2009

ldquo

rdquo

Mobile data expected to grow with compounded annual growth rate (CAGR) of close to 75 over the next 5 YearsndashUS Mobile Data Consumption Trends January

2010 FROST amp SULLIVAN

ldquo

rdquo

70 of all voice and data traffic indoor in 20081

ndashInforma 2008

ldquordquo

Average MB per subscriber will increase with CAGR of 40 -60 over the next 4 years

ndashSmartphones Arms Race of Today

amp Future Issues ABI Research August 2010

ldquo

rdquo

55 - 70 of all mobile data traffic happens indoor ndashCisco Visual Networking Index Global

Mobile Data Traffic Forecast 2010

ldquordquo

4

Network Traffic Characteristics

0

20

40

60

80

100

0 10 20 30 40 50 60

o

f S

ite

s

BH

cdf

pdf

0

5

10

15

20

25

30

0 5 10 15 20 25

o

f S

ite

s

Hour

Dense

Rural

Suburban

Urban

Total

bull For majority of sites is between 700pm to 1100pm

bull Most people are indoors

Busy Hour

bull For majority of sites is between 10 to 25

Busy Hour (traffic during Busy Hour)

bull Reduce Busy Hour (BH) Traffic

bull Offload BH traffic generated by users who are indoors since they dont require mobility offered by WAN

bull Reduction in BH traffic translates to reduction in BTS Backhaul BSC expenditure

Goal Reduce Network Expense

5

Network Traffic Distribution The 80-20 rule

0

10

20

30

40

50

60

70

80

90

100

0 20 40 60 80 100

o

f N

etw

ork

T

raff

ic

of Subscribers

1 ATampT 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

httpwwwattcomgenpress-roompid=17991ampcdvn=newsampnewsarticleid=30854ampmapcode=financial|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 2009-2014

httpwwwciscocomenUSsolutionscollateralns341ns525ns537ns705Cisco_VNI_Usage_WPpdf

bull 10 of highest users generate 70 of network traffic

bull Disproportionate impact on Network traffic when compared to their count

bull Reducing traffic generated by Data Hogs reduces Total Network Traffic significantly

―Data Hogs

High Data

Subs

2

Attractive Femtocell offering

Maximize End-User Value and Reduce Network Costs

New Services home

tariffs and bundles

Enhanced

Coverage

Increased Capacity(reduce backhaul site costs)

Enhanced user

Experience

Subsidy Model

Reduced CostReduced Churn New Revenue

Added End-User Value

3

Data Usage Increasing RapidlymdashMajority of Voice and Data Usage Indoors

Femtocells are a low cost solution to increase indoor coverage

increase capacity and enhance user experience

By 2014 monthly worldwide mobile data traffic will exceed the total for all of 2008

ndashABI Research August 2009

ldquo

rdquo

Mobile data expected to grow with compounded annual growth rate (CAGR) of close to 75 over the next 5 YearsndashUS Mobile Data Consumption Trends January

2010 FROST amp SULLIVAN

ldquo

rdquo

70 of all voice and data traffic indoor in 20081

ndashInforma 2008

ldquordquo

Average MB per subscriber will increase with CAGR of 40 -60 over the next 4 years

ndashSmartphones Arms Race of Today

amp Future Issues ABI Research August 2010

ldquo

rdquo

55 - 70 of all mobile data traffic happens indoor ndashCisco Visual Networking Index Global

Mobile Data Traffic Forecast 2010

ldquordquo

4

Network Traffic Characteristics

0

20

40

60

80

100

0 10 20 30 40 50 60

o

f S

ite

s

BH

cdf

pdf

0

5

10

15

20

25

30

0 5 10 15 20 25

o

f S

ite

s

Hour

Dense

Rural

Suburban

Urban

Total

bull For majority of sites is between 700pm to 1100pm

bull Most people are indoors

Busy Hour

bull For majority of sites is between 10 to 25

Busy Hour (traffic during Busy Hour)

bull Reduce Busy Hour (BH) Traffic

bull Offload BH traffic generated by users who are indoors since they dont require mobility offered by WAN

bull Reduction in BH traffic translates to reduction in BTS Backhaul BSC expenditure

Goal Reduce Network Expense

5

Network Traffic Distribution The 80-20 rule

0

10

20

30

40

50

60

70

80

90

100

0 20 40 60 80 100

o

f N

etw

ork

T

raff

ic

of Subscribers

1 ATampT 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

httpwwwattcomgenpress-roompid=17991ampcdvn=newsampnewsarticleid=30854ampmapcode=financial|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 2009-2014

httpwwwciscocomenUSsolutionscollateralns341ns525ns537ns705Cisco_VNI_Usage_WPpdf

bull 10 of highest users generate 70 of network traffic

bull Disproportionate impact on Network traffic when compared to their count

bull Reducing traffic generated by Data Hogs reduces Total Network Traffic significantly

―Data Hogs

High Data

Subs

3

Data Usage Increasing RapidlymdashMajority of Voice and Data Usage Indoors

Femtocells are a low cost solution to increase indoor coverage

increase capacity and enhance user experience

By 2014 monthly worldwide mobile data traffic will exceed the total for all of 2008

ndashABI Research August 2009

ldquo

rdquo

Mobile data expected to grow with compounded annual growth rate (CAGR) of close to 75 over the next 5 YearsndashUS Mobile Data Consumption Trends January

2010 FROST amp SULLIVAN

ldquo

rdquo

70 of all voice and data traffic indoor in 20081

ndashInforma 2008

ldquordquo

Average MB per subscriber will increase with CAGR of 40 -60 over the next 4 years

ndashSmartphones Arms Race of Today

amp Future Issues ABI Research August 2010

ldquo

rdquo

55 - 70 of all mobile data traffic happens indoor ndashCisco Visual Networking Index Global

Mobile Data Traffic Forecast 2010

ldquordquo

4

Network Traffic Characteristics

0

20

40

60

80

100

0 10 20 30 40 50 60

o

f S

ite

s

BH

cdf

pdf

0

5

10

15

20

25

30

0 5 10 15 20 25

o

f S

ite

s

Hour

Dense

Rural

Suburban

Urban

Total

bull For majority of sites is between 700pm to 1100pm

bull Most people are indoors

Busy Hour

bull For majority of sites is between 10 to 25

Busy Hour (traffic during Busy Hour)

bull Reduce Busy Hour (BH) Traffic

bull Offload BH traffic generated by users who are indoors since they dont require mobility offered by WAN

bull Reduction in BH traffic translates to reduction in BTS Backhaul BSC expenditure

Goal Reduce Network Expense

5

Network Traffic Distribution The 80-20 rule

0

10

20

30

40

50

60

70

80

90

100

0 20 40 60 80 100

o

f N

etw

ork

T

raff

ic

of Subscribers

1 ATampT 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

httpwwwattcomgenpress-roompid=17991ampcdvn=newsampnewsarticleid=30854ampmapcode=financial|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 2009-2014

httpwwwciscocomenUSsolutionscollateralns341ns525ns537ns705Cisco_VNI_Usage_WPpdf

bull 10 of highest users generate 70 of network traffic

bull Disproportionate impact on Network traffic when compared to their count

bull Reducing traffic generated by Data Hogs reduces Total Network Traffic significantly

―Data Hogs

High Data

Subs

4

Network Traffic Characteristics

0

20

40

60

80

100

0 10 20 30 40 50 60

o

f S

ite

s

BH

cdf

pdf

0

5

10

15

20

25

30

0 5 10 15 20 25

o

f S

ite

s

Hour

Dense

Rural

Suburban

Urban

Total

bull For majority of sites is between 700pm to 1100pm

bull Most people are indoors

Busy Hour

bull For majority of sites is between 10 to 25

Busy Hour (traffic during Busy Hour)

bull Reduce Busy Hour (BH) Traffic

bull Offload BH traffic generated by users who are indoors since they dont require mobility offered by WAN

bull Reduction in BH traffic translates to reduction in BTS Backhaul BSC expenditure

Goal Reduce Network Expense

5

Network Traffic Distribution The 80-20 rule

0

10

20

30

40

50

60

70

80

90

100

0 20 40 60 80 100

o

f N

etw

ork

T

raff

ic

of Subscribers

1 ATampT 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

httpwwwattcomgenpress-roompid=17991ampcdvn=newsampnewsarticleid=30854ampmapcode=financial|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 2009-2014

httpwwwciscocomenUSsolutionscollateralns341ns525ns537ns705Cisco_VNI_Usage_WPpdf

bull 10 of highest users generate 70 of network traffic

bull Disproportionate impact on Network traffic when compared to their count

bull Reducing traffic generated by Data Hogs reduces Total Network Traffic significantly

―Data Hogs

High Data

Subs

5

Network Traffic Distribution The 80-20 rule

0

10

20

30

40

50

60

70

80

90

100

0 20 40 60 80 100

o

f N

etw

ork

T

raff

ic

of Subscribers

1 ATampT 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

httpwwwattcomgenpress-roompid=17991ampcdvn=newsampnewsarticleid=30854ampmapcode=financial|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 2009-2014

httpwwwciscocomenUSsolutionscollateralns341ns525ns537ns705Cisco_VNI_Usage_WPpdf

bull 10 of highest users generate 70 of network traffic

bull Disproportionate impact on Network traffic when compared to their count

bull Reducing traffic generated by Data Hogs reduces Total Network Traffic significantly

―Data Hogs

High Data

Subs

6

CDMA2000 Network Architecture amp Benefits of Femto

Handset BTS BSC PDSN Internet

Handset

Reduction in Traffic

over Air Interface

(Improved User Exp) Lower BTS

Requirement

(Lower NetEx)

Lower

Backhaul

Requirement

(Lower Opex)

Reduced Processing amp

Traffic Req

( Improved User Exp)

Femto AP

BTSBSC

functions Femto

SeGWInternet

BTS Base Station

PDSN Packet Data Serving Node

Femto SeGW Femto Security Gateway provides Access authentication and IPSec connection

Macro

Network

Femto

Network

7

Traffic Offload CaseResidential Femto Users

Morphology

Dense Urban

Urban

Suburban

Night Pops

[Million]

175

15

38

3G Subs [Million]

036

031

079

Operator Household [Thousand]

280

220

550

Femto[Thousand]

11 - 28

9 - 22

22 - 55

bullOperator Market Penetration 35

bull3G Device Market Share 60

bullHouseholds with Femto 4 - 10

bullFemto per Household 1

8

10 of Total Subs are High

Data Subs

Impact of Increasing Traffic on Site Count

-

200

400

600

800

1000

1200

1400

1600

0 500 1000 1500 2000

Sit

e C

ou

nt

Traffic (MBSubMonth)

Site Count vs Monthly TrafficSub10MHz Spectrum

Macro Only

40

60

80

100

High Data Subs with Femto

Delay Cell Splitting

with Femto

Macro Cell Splitting

bull Offloading ―data hogs to femtocell substantially reduces macro networksrsquo traffic

Data Offloading

bull In many areas it is not possible to add more new sites leaving operators with very few options

Macro Cell Splitting

9

Impact of Site Count on NetEx

0

50

100

150

200

250

0 500 1000 1500 2000

An

nu

al

NetE

xS

ub

US

D

Traffic (MBSubMonth)

NetEx vs Monthly TrafficSub10MHz Spectrum

Macro Only

40

60

80

100

High Data Subs with Femto

45 Saving

in NetEx

bull ~10 of subscribers use 70 to 80 of bandwidth1

ldquoData hogsrdquo too costly

bull NetExMBSub2 for 1GBSub case is 40 lower when 60 of ―data hogs moved to Femtocells

Femtocellssubstantially improve network economics

Sources

1 various operators

2 NetExSubMonth Calculated using $GB values for Today from ―Femtocells --- Natural Solution for Offload

3 Residential Femtocell Cost $175 Amount paid by subscriber $50 Gateway amp provisioning cost $50

4 Enterprise Femtocell Cost $500 Gateway amp provisioning cost $100

5 White Paper ―Femtocells a cost-effective solution for network traffic offload available on request

NetEx Depreciated Capex + Opex

10

Conclusion

Femtorsquos 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

11

Questions Connect with Us

httpwwwqualcommcomfemto

httpwwwqualcommcomblogcontributorsprakash-sangam

qualcomm_tech

httpmqualcommcomfemto

7

Traffic Offload CaseResidential Femto Users

Morphology

Dense Urban

Urban

Suburban

Night Pops

[Million]

175

15

38

3G Subs [Million]

036

031

079

Operator Household [Thousand]

280

220

550

Femto[Thousand]

11 - 28

9 - 22

22 - 55

bullOperator Market Penetration 35

bull3G Device Market Share 60

bullHouseholds with Femto 4 - 10

bullFemto per Household 1

8

10 of Total Subs are High

Data Subs

Impact of Increasing Traffic on Site Count

-

200

400

600

800

1000

1200

1400

1600

0 500 1000 1500 2000

Sit

e C

ou

nt

Traffic (MBSubMonth)

Site Count vs Monthly TrafficSub10MHz Spectrum

Macro Only

40

60

80

100

High Data Subs with Femto

Delay Cell Splitting

with Femto

Macro Cell Splitting

bull Offloading ―data hogs to femtocell substantially reduces macro networksrsquo traffic

Data Offloading

bull In many areas it is not possible to add more new sites leaving operators with very few options

Macro Cell Splitting

9

Impact of Site Count on NetEx

0

50

100

150

200

250

0 500 1000 1500 2000

An

nu

al

NetE

xS

ub

US

D

Traffic (MBSubMonth)

NetEx vs Monthly TrafficSub10MHz Spectrum

Macro Only

40

60

80

100

High Data Subs with Femto

45 Saving

in NetEx

bull ~10 of subscribers use 70 to 80 of bandwidth1

ldquoData hogsrdquo too costly

bull NetExMBSub2 for 1GBSub case is 40 lower when 60 of ―data hogs moved to Femtocells

Femtocellssubstantially improve network economics

Sources

1 various operators

2 NetExSubMonth Calculated using $GB values for Today from ―Femtocells --- Natural Solution for Offload

3 Residential Femtocell Cost $175 Amount paid by subscriber $50 Gateway amp provisioning cost $50

4 Enterprise Femtocell Cost $500 Gateway amp provisioning cost $100

5 White Paper ―Femtocells a cost-effective solution for network traffic offload available on request

NetEx Depreciated Capex + Opex

10

Conclusion

Femtorsquos 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

11

Questions Connect with Us

httpwwwqualcommcomfemto

httpwwwqualcommcomblogcontributorsprakash-sangam

qualcomm_tech

httpmqualcommcomfemto

8

10 of Total Subs are High

Data Subs

Impact of Increasing Traffic on Site Count

-

200

400

600

800

1000

1200

1400

1600

0 500 1000 1500 2000

Sit

e C

ou

nt

Traffic (MBSubMonth)

Site Count vs Monthly TrafficSub10MHz Spectrum

Macro Only

40

60

80

100

High Data Subs with Femto

Delay Cell Splitting

with Femto

Macro Cell Splitting

bull Offloading ―data hogs to femtocell substantially reduces macro networksrsquo traffic

Data Offloading

bull In many areas it is not possible to add more new sites leaving operators with very few options

Macro Cell Splitting

9

Impact of Site Count on NetEx

0

50

100

150

200

250

0 500 1000 1500 2000

An

nu

al

NetE

xS

ub

US

D

Traffic (MBSubMonth)

NetEx vs Monthly TrafficSub10MHz Spectrum

Macro Only

40

60

80

100

High Data Subs with Femto

45 Saving

in NetEx

bull ~10 of subscribers use 70 to 80 of bandwidth1

ldquoData hogsrdquo too costly

bull NetExMBSub2 for 1GBSub case is 40 lower when 60 of ―data hogs moved to Femtocells

Femtocellssubstantially improve network economics

Sources

1 various operators

2 NetExSubMonth Calculated using $GB values for Today from ―Femtocells --- Natural Solution for Offload

3 Residential Femtocell Cost $175 Amount paid by subscriber $50 Gateway amp provisioning cost $50

4 Enterprise Femtocell Cost $500 Gateway amp provisioning cost $100

5 White Paper ―Femtocells a cost-effective solution for network traffic offload available on request

NetEx Depreciated Capex + Opex

10

Conclusion

Femtorsquos 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

11

Questions Connect with Us

httpwwwqualcommcomfemto

httpwwwqualcommcomblogcontributorsprakash-sangam

qualcomm_tech

httpmqualcommcomfemto

9

Impact of Site Count on NetEx

0

50

100

150

200

250

0 500 1000 1500 2000

An

nu

al

NetE

xS

ub

US

D

Traffic (MBSubMonth)

NetEx vs Monthly TrafficSub10MHz Spectrum

Macro Only

40

60

80

100

High Data Subs with Femto

45 Saving

in NetEx

bull ~10 of subscribers use 70 to 80 of bandwidth1

ldquoData hogsrdquo too costly

bull NetExMBSub2 for 1GBSub case is 40 lower when 60 of ―data hogs moved to Femtocells

Femtocellssubstantially improve network economics

Sources

1 various operators

2 NetExSubMonth Calculated using $GB values for Today from ―Femtocells --- Natural Solution for Offload

3 Residential Femtocell Cost $175 Amount paid by subscriber $50 Gateway amp provisioning cost $50

4 Enterprise Femtocell Cost $500 Gateway amp provisioning cost $100

5 White Paper ―Femtocells a cost-effective solution for network traffic offload available on request

NetEx Depreciated Capex + Opex

10

Conclusion

Femtorsquos 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

11

Questions Connect with Us

httpwwwqualcommcomfemto

httpwwwqualcommcomblogcontributorsprakash-sangam

qualcomm_tech

httpmqualcommcomfemto

10

Conclusion

Femtorsquos 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

11

Questions Connect with Us

httpwwwqualcommcomfemto

httpwwwqualcommcomblogcontributorsprakash-sangam

qualcomm_tech

httpmqualcommcomfemto

11

Questions Connect with Us

httpwwwqualcommcomfemto

httpwwwqualcommcomblogcontributorsprakash-sangam

qualcomm_tech

httpmqualcommcomfemto

12

Thank You