4G World 2011, Oct. 24-Oct. 27 at McCormick Place in Chicago

4G Backhaul Summit: The Changing Landscape of Backhaul

When: Monday, Oct. 24, 9:30-10:30 a.m.

Why You Should Attend: By 2016 analysts believe that operators will approach $840 billion in spending, globally, to address bottlenecks in their backhaul networks. Knowing how and where to apply that spend is becoming a strategic imperative going forward.

In this session, Jennifer Pigg, vice president of Yankee Group's Network Research Group, will discuss how backhaul is changing as we transition to 4G. To wit: Only 20 percent of mobile tower sites in North America have a fiber feed. In Europe, the number is under 5 percent. The average backhaul connection rate for a 2G or 3G eNodeB is still under 50 MBps. And yet, mobile network traffic is projected to double every year for the next five years. Underneath that statistic lie some specifics that carriers ignore at their peril.

For instance, up until now, mobile traffic growth has been accommodated by adding backhaul capacity as needed, with an additional T1 or two. As bandwidth consumption escalates, the strategy becomes prohibitively expensive, particularly since carriers are busy bolstering their 3G HSPA+ networks and rolling out LTE. These faster networks and the smartphones, tablets and other connected devices that run on them will represent not just an incremental traffic increase but a complete paradigm shift.

That's because increasing smart broadband data and video applications are outstripping voice, so it becomes necessary to drive some intelligence into the backhaul network, not just make the pipe wider. Changing traffic characteristics of a modern 3G or 4G network underscore this.

For instance, video is a big topic for the industry; but users are beginning to trend away from broadcast video and move to more interactive video and user-generated content (UGC). As UGC such as photo and video uploads, interactive video, crowdcasting, collaboration and gaming hits the mobile network on the upstream side, it is creating download and upload traffic spikes that are difficult to absorb in a point-to-point backhaul architecture. This session will examine the evolution of backhaul architectures as MNOs actively pursue ring, point-to-multipoint and mesh backhaul solutions

Tom Keys, MetroPCS Keynote: Building on the Foundation of 4G for All

When: Tuesday, Oct. 25, 9:20-9:50 a.m.

Why You Should Attend: MetroPCS' President and COO, Tom Keys, will discuss key lessons and customer insights from the mobile operator's first-mover 4G LTE deployment, which it has rolled out in all 14 core operating markets throughout the U.S.

MetroPCS is in a good position to discuss the business model challenges and opportunities around the LTE transition. The carrier wanted to offer a service that, true to its overall brand strategy as a flat-rate carrier, offers value and functionality to allow people access to mobile broadband without all the complexity involved in other carriers' strategies. Simple rate plans and quality phones are the linchpin: MetroPCS offers two LTE phones, the Samsung Craft and Samsung Galaxy Indulge, based on Android.

However, the operator will have spent around $1 billion total on its LTE network through early next year, CFO Braxton Carter said during the second-quarter earnings call. It also plans to bump up capital expenditures this year from a previous estimate of $700 million to $900 million, to a new target of $900 million to $1 billion, including upgrades to its 3G EV-DO network. To recoup that investment means migrating more customers to LTE; attracting them will take a broader range of devices and perhaps differentiating service plans.

Carter said at an investor conference this fall that the company is looking to expand its device stable and plans to acquire cheaper LTE Android smartphones that will go for under $200—a quest that might not come to fruition until 2012. That puts the operator in a bit of an evolutionary mode.

"The good news is a lot of that investment is already behind us," he said. "The bad news is we're in this transition period."

Keys is likely to discuss lessons learned, business model strategies and how LTE fits into the carrier's overall network approach. He will also share some of MetroPCS' plans to grow its LTE customer base and reinforce LTE's impact to consumers across the U.S.

NFC Summit Keynote: Why NFC Is Much Bigger Than Paying With Your Phone

When: Wednesday, Oct. 26, 9:15-10 a.m.

Why You Should Attend: Consumers and businesses are justifiably excited about the prospect of NFC-based mobile payments. However, the new business opportunities enabled by NFC extend far beyond the checkout line, spanning areas as diverse as security and access control, mobile workforce management, health care, banking, tourism and social networking. In this presentation, NFC Forum Chairman Koichi Tagawa explores the many ways NFC is inspiring new business models, solutions and incremental revenue opportunities for companies throughout the world.

Top Trends in 4G: V2M Opportunity Analysis

By: Tara Seals

Customer Opportunity: In the mobile broadband era, devices, applications and content have usurped the operator as having the primary relationship with the end user, and are driving unprecedented levels of traffic that operators must effectively deliver in order to hold onto even the bitpipe value proposition. When it comes to 4G, savvy operators have an opportunity to reclaim their role in the life of the customer, driving engagement through innovative bundles that include support for the cloud ecosystem across multiple devices, and with innovative relationships with the over-the-top (OTT) content and app providers. They can also harness infant technologies like NFC to insert their brand into new areas–in this case banking–as a trusted provider.

Revenue Opportunity: Translating the strategic investments being made in 4G into revenue will take a range of strategies, including implementing an intelligent networks approach, focusing on optimization and policy, embracing new ideas like advertising and working with developers to forge revenue-share partnerships. All of which constitutes new territory for a service provider accustomed to delivering minutes of use and tiers of service that are made up of traffic-agnostic bytes. But considering new approaches will be crucial in addressing the coming profitability gap, in which the cost of carrying mobile data traffic will outstrip the revenue it generates on its own in the traditional Internet bitpipe model.

Technical Opportunity: 4G presents a fundamental change in architecture by virtue of flattening the network, becoming all-IP, and requiring new spectrum, radios, backhaul and an overlay network of small cells to make the best use of all of the above. Additionally, the level of intelligence in the network that will be necessary to support the aforementioned innovation in business models will require new software implementations. Operators must integrate this into its existing network operations and effectively manage a heterogeneous network, minimizing complexity and maintaining visibility across the board.

The V2M Takeaway: As 4G is claiming global momentum, particularly in the LTE space, operators in 2012 will be faced with weighing their best strategic approaches for addressing several unavoidable, fundamental changes that are being driven into their businesses. Some are putting off such conversations and instead focusing on the nuts and bolts of the actual rollouts, which could be a crippling mistake in the long run. The decisions being made around these top trends will have wide-ranging ramifications for future viability as well as the consumer perception of the role of the carrier.

Closing the Profitability Gap in the Mobile Internet

By: Tara Seals

The mobile industry is in a state of unprecedented dynamism, led by changing consumption patterns and rapid innovation in devices, applications and content, all of which is forcing service providers around the world to reconsider their network architectures, business models and operational strategies. However, as wireless carriers are making these significant strategic investments and decisions, they have to consider how to translate them into new revenue, customer engagement and flexibility for capturing future opportunities and growth. When it comes to monetizing 4G, achieving that will take high-level business model innovation--and this will be a major trend for 2012.

There is no doubt that 4G will be the largest area of technology investment going forward. "Despite the deserved attention on the U.S.--Verizon is very advanced in its timeline--there is LTE implementation ongoing outside of the United States," noted Yankee Group analyst Wally Swain. "There are 200 operators committed to LTE around the world, so for the first time we have a global adherence to a standard."

However, as we move into the era of commercial deployment, it's clear that significant challenges remain to market development. For one, regulation and policy issues related to spectrum are in play in many markets. On the technical side, while most of the legs already in place, site placement remains a hurdle. "We've gone through three major technology changes in 10 years, so we know how to install radios," Swain said. "But while everyone wants cellular coverage, no one wants a tower in their line of site."

Also, the move to LTE is not a software upgrade as some of the others are. It requires a change in spectrum and network design, and presents interesting challenges around the handset—should an operator launch with a dongle only or employ a mixed strategy that includes tablets and smartphones?

But the primary issue is a marketing challenge. Mobile users barely understand the difference between 2G, 3G and 4G. Articulating the differentiators and driving adoption "is going to be a problem," Swain said.

Different operators are approaching the consumer communication issue in different ways. For instance, in Puerto Rico, new entrant Open Mobile is articulating the value proposition based on what users actually do. Open Mobile's push is on fixed-to-mobile broadband substitution, so consumers are asked if they use the service for e-mail, games, online video and so on, and then a package is built accordingly. "Instead of speed and downloads, it’s about what do you do when you’re online—and that's an innovative way of getting over the education gap," Swain noted. Meanwhile, Telstra, as an integrated provider, is looking to position 4G within the context of a mix of services, so the approach is more about providing raw bandwidth, which gets us back to the profitability gap. However, the Australian incumbent is making savvy moves to work with developers to offer unique, converged services. The BlueVia program engages developers in a commission model, where if a developer's application causes a revenue-generation event like an SMS or a phone call, then Telstra pays the developer a share for that.

"The arrival of high-speed 4G networks combined with emerging mobile cloud technology is fueling speculation that operators can recapture mobile services revenue through unique capabilities and more open developer platforms and ecosystems," said Adlane Fellah, research director at Maravedis.

Finding a way to work with developers in a win-win model is a looming imperative. "Much of the structure over the last several years for mobile broadband was shaped by the original Internet model where operators provide bandwidth and not much more," Swain said. "And now, once the network goes all-IP, then the operator’s ability to control some of these customer engagements with third parties and define services goes away, and it's that much more difficult to add value to mere transmission."

For now, when it comes to implementations, the challenges are simmering on the back burner. "Most of the operators are launching at this stage with these questions unresolved, because they are more focused on, how do I launch this new network and what can I charge for it," Swain said. "The conversations are fairly practical and short-term, around, literally, what does it take to get this up and running."

It's clear that operator-unique business models will be driven by policy management to establish tiers of service. But there's plenty to consider beyond usage-based billing. For instance, bundled packages that cover multiple devices and are geared towards a cloud-based environment. "One of the biggest factors impacting the user experience in upcoming years will be the support of multiple devices and the portability of applications, services and content among the devices," said Bill Lesieur, senior analyst at Maravedis.

Maravedis has found that 77 percent of mobile operators plan to support multiple devices and portability in 4G networks. And while 4G wireless combined with cloud computing will drive a new wave of innovation and ROI for operator content, services and applications, securing market opportunities presents uncertainties as operators, partners and competitors all aim to control the most profitable segments of the mobile cloud services value chain.

"Mobile operators have to be careful not to try to fix their 'dumb pipe' problem with a 'dumb cloud' solution by racing into commodity cloud services that are providing very low margins and lacking unique telecom-related differentiation," added Lesieur. "Many operators and their vendors are focusing their mobile cloud efforts on the enterprise business market, which is expected to represent the larger and more profitable revenue opportunity for mobile operators." The rapidly increasing customer expectations for mobile operator support of multiple personal devices will also fuel the debate about whether or not app stores from Apple and Google are constraining portability among devices from different manufacturers, he predicted.

In their quest for profitability, operators also have to gain a handle on where they can insert themselves into a consumer value chain that is ever-changing. "The innovators in the market that are changing the game right now are doing it through handsets and mobile devices," said Carl Howe. "The most iconic example of that, the iPhone, is only four years old, and in that short time we have gone from having phones in our hands to having computers in our hands, and while we used to be told what to do with devices by operators, now the phone-makers are in the position to dictate."

He added, "Verizon is still trying to get control back after the walled garden failed." Devices are the window into the network, the thing users can see and touch. Network connectivity on the other hand is something that can't be can't seen, so there's nothing to label with a brand, other than in a virtual sense.

To make things more complicated, the power struggles are far from over. "Even the device makers are starting to lose power to content providers, the last piece of the consumer experience," explained Howe. "When you think about the four horsemen of mobility—Amazon, Apple, Facebook and Google--they make money on transactions and advertising. Just when operators think they're getting a handle on the ecosystem, it'll change again."

Tablets, meanwhile, are consuming a small but growing percentage of mobile broadband, and tablet owners download twice as many apps as smartphone users. "Growth in apps is driving growth in devices and the network, and soon there will be a lot more innovation driven by software than by hardware," said Swain.

Devices and applications are also the things that are driving demand for mobile broadband. For instance, when Android offered the ability to do background tasks, the traffic levels spiked. "If you have ESPN checking scores every 10 minutes, that adds up," Swain noted. The critical question of how to convert this traffic into revenue will take fresh approaches to working with applications providers.

For instance, mobile social media is a growing phenomenon, particularly in Japan and China where cultivating virtual personae (remember Second Life?) is a mainstream activity. However, monetizing the phenomenon has been a challenge. "[Social media providers] are already missing a trick by releasing mobile services with little or no advertising other than the in-stream kind which users have to opt into seeing by subscribing to feeds from brands," said Charlotte Miller, analyst at Juniper Research, in a blog. "When the question of revenue generation was posed in the desktop space, many social media services turned to advertising to generate revenue from user bases willing to share large amounts of personal data. So if social media services aren’t using advertising to generate on mobile, how can they successfully monetize their mobile services?"

One answer? Virtual goods. Consumers Japan and China buy credits for social gaming; clothing for their avatars, enhancements for their profiles "and even medicine for their virtual pets," Miller noted. Its big business—and one ripe to benefit from a carrier's particular set of attributes, such as location, time-of-day context, SMS notifications, billing capabilities and service-aware QoE capabilities. Social media providers--and this model works for apps developers in general—could construct a lucrative revenue share model that provides a carrier a percentage per transaction.

In the virtual goods game alone, that could add up to big business. "Virtual goods already form the cornerstone for global mobile social revenues in the relatively mature Far East and China markets, and we believe that this model will become more prevalent elsewhere," Miller said, adding that Juniper anticipates global revenues reaching $4.6 billion by 2016, up from $3 billion this year.

NFC and Mobile Payments

By: Tara Seals

When it comes to 4G, M2M and the Internet of Things is expected to have a large impact on traffic patterns and carrier revenue models. But another big monetization opportunity lies in Near Field Communications (NFC) and mobile-payment systems, which allow consumers to tap their phone on special terminals to pay for goods or complete transactions. Mainstream adoption of the technology will generate a whole new set of data traffic for carriers that could play an important part in monetizing 4G investments, by offering the potential for architecting several innovative business models.

NFC is gathering momentum, with the entry of several high-profile companies into the market and the backing of the credit card community. And while NFC is associated with mobile payments, many are looking at broader use cases in health and retail and other verticals "This way of interacting with the world could be a radical change," said Nick Holland, Yankee Group analyst. "It's not just about turning a phone into a credit card."

Technical Opportunity: 4G presents a fundamental change in architecture by virtue of flattening the network, becoming all-IP, and requiring new spectrum, radios, backhaul and an overlay network of small cells to make the best use of all of the above. Additionally, the level of intelligence in the network that will be necessary to support the aforementioned innovation in business models will require new software implementations. Operators must integrate this into its existing network operations and effectively manage a heterogeneous network, minimizing complexity and maintaining visibility across the board.

Moving Parts
Stakeholders are considering what is required within the ecosystem to build out the NFC opportunity, and it requires the implementation of several moving parts. Carrier networks need to be prepped, payment networks need to be hooked in, security and privacy measures need to be implemented, plus retailers and banks need to get on board. And, most importantly the customer experience has to be seamless and friendly.

"You really have to nanny the consumer and hold their hand so they’re not scared to use this," said Holland. "The ecosystem has to establish trust, because to a consumer, they're just tapping a phone and magic happens. We need to educate, and maybe it’s one of those situations where the NFC ecosystem gradually turns up the heat—starting with transactions where consumers are tapping for coupons or grabbing information. Jumping right into paying for things with your phone is probably somewhat threatening."

Another consideration is the fact that compatible phones and terminals for merchants need to be more widely deployed. For now, the Nexus S on Sprint Nextel is an NFC-enabled device, and more are in the works, including some BlackBerrys and the upcoming Samsung Galaxy Nexus. Google is in the process of buying Motorola Mobility as well, and one can be sure the unit will focus some attention on NFC-enabled phones for the Google Wallet service.

"We're two or three years away from this getting to the mainstream," Holland said. "All the pieces need to fall into place. It will happen."

Market Momentum
While it's early for the market, the investment of several large companies is evidence that NFC and mobile payments are no longer a science project. Google has launched the Google Wallet initiative using Sprint, while the carrier-backed ISIS project, set for 2012 launch, is a partnership between AT&T, Verizon Wireless and T-Mobile USA that has Visa, MasterCard, American Express and Discover on board. Visa's digital wallet, V.me, will launch in 2012 as a PayPal-like payment system for online transactions, with NFC enablement on the roadmap. Meanwhile, American Express plans to invest $100 million in digital payments start-ups in hopes of seeding the ecosystem. And Mastercard is teaming with Intel to allow NFC-enabled "tap-to-pay" online transactions via Intel Ultrabooks, netbooks and other PCs.

All of that movement has generated a certain level of consumer awareness that was nonexistent even six months ago. And the amount of competition in the market already bodes well for a rapid advancement of innovation and should encourage movement on the ecosystem side...for instance, handset-makers should be encouraged by the multiplying activity to roll out more offerings.

The momentum should pay off. A new study from Juniper Research has determined that the total global value of mobile payments for digital and physical goods, money transfers and NFC transactions will reach $670 billion by 2015, up from $240 billion this year. Specific to NFC, some 20 countries are expected to launch NFC services in the next 18 months, resulting in transactions approaching $50 billion worldwide by 2014. China, Western Europe and North America will lead the charge, representing 75 percent of the growth.

In fact, all segments will exhibit two- to threefold growth over the next five years. This growth will be driven by the rapid adoption of mobile ticketing, NFC contactless payments, physical goods purchases and money transfers as people in both developed and developing countries use their devices for everyday transactions.

"Our analysis shows that emerging segments such as physical goods payments, NFC and money transfers will fuel market growth by a factor of 2.7 times by 2015," said Juniper Senior Analyst David Snow.

Simmering Business Models
With burgeoning growth at hand for NFC and mobile payments, now is the time for carriers to insert themselves into the opportunity.

The ISIS initiative is developing a joint platform that retailers, credit card issuers and payment networks can use in order to reach the customers of any of the backing carriers with their own branded services, thus offering a nationwide, standardized, interoperable network for NFC transaction traffic. The carriers may charge a licensing fee for use of the platform, or may take a revenue share from each transaction. ISIS will be blind to customer data, however, eliminating the ability of the operators to leverage advertising or personalized offerings for further revenue generation. ISIS trials are set for next year in Salt Lake City and Austin, Texas.

Google Wallet, meanwhile, hosts NFC and mobile payment services for banks, retailers and payment networks. While use of the platform is free, Google accesses customer data in order to serve up targeted, lucrative ads. Google Wallet is available exclusively to Sprint customers, which offers Sprint a differentiator and also likely a behind-the-scenes revenue share from the advertising, although that has not been confirmed.

Some initiatives will bypass operators entirely other than utilizing a mobile data connection in an over-the-top fashion–which does little to ease the monetization imperative for next-gen networks. Intel for instance has teamed up with payment provider MasterCard so that users can use their phones to tap Intel-based PCs, making it a device-PC interaction that won't involve the carrier other than the broadband powering the PC and mobile connections.

Similarly, Visa's V.me will start off as an online gambit, involving a special button on an online retailer's site that has been mobile-optimized for a one-click purchase process once a user has signed up and registered their cards (from MasterCard, American Express and Discover, not just Visa). Retailers can offer targeted promotions and coupons to users as well based on purchase history, Visa promises. Eventually, NFC capabilities will be implemented to widen the use cases for the digital wallet.

While that seems like just one more OTT data traffic multiplier that offers little value to the carrier, Visa is also launching the Visa Developer Center-- a potential opportunity for operators. The Center will offer e-commerce and mobile application developers the open APIs and development tools offered by Visa and its subsidiaries, CyberSource, Authorize.Net and PlaySpan. That means that carriers have the opportunity to craft a branded strategy that could implement NFC and mobile payments into converged services and applications, such as a gifting service that includes SMS alerts and confirmations, which would drive incremental revenue. "Carriers are still kicking the tires on business model," said Holland. "It will likely end up being a two-sided business model. This is not like putting GPS or a camera in the phone—those have clear consumer use cases with carrier implications."

Beyond Mobile Payments
While mobile payments and point-of-sale applications seem the obvious first choice for the technology, NFC has great promise as an enabler of a wide variety of transactional industries."There are a variety of use cases beyond the phone becoming a payment vehicle," said Holland. "It just so happens that’s the context right now, but that's rather shortsighted, really."

For instance, NFC has the potential to radically change the way we shop. In an NFC supermarket, the checkout goes away because shoppers can simply use their phones to tap against groceries as they select them, bag them as they go and then check out at the end with a QR code that can be scanned on the way out of the store.

"Having an iPhone app that lets you just wander around the supermarket tapping things drastically reduces the time it takes to shop, and would likely meet deep consumer acceptance," said Holland.

There are also interesting healthcare applications. Practitioners could use a mobile device to log patient treatments (a form of this is live in the Netherlands already), home visits from nurses, medication and so on, with a tap. "It's great for tracking time in and time out and logistics management," said Holland.

It's also a good option for secure access—and there are already some NFC-enabled locations like hotels, where the phone becomes a room key--and automotive, where NFC enables the phone to sync music services that drivers subscribe to with the car's sound system.

NFC-enabled applications are really only limited by a developer's creativity. The issue in achieving this utopia is consumer education, and the ecosystem development.

"It will be a little tricky," said Holland. "You have banks and credit cards on one side, and mobile operators on other side. Both of them have a stake in the same device, both have a claim to a revenue share."

It becomes a question too of customer trust—who owns the customer? Is it the bank, Google, Verizon?

"What’s playing out here is dynamic in terms of working out the nuts and bolts," said Holland. "But there is undoubtedly a big opportunity for everyone."

The Rise of Small Cells

By: Tara Seals

It is clear that, in LTE in particular, small cells will be a crucial part of deployment strategies for operators. When it comes to 4G, many carriers expect to use small cells to create dense capacity in zones of high demand, fill in coverage gaps and support a range of new applications, all while conserving precious spectrum resources and bolstering capacity at a low cost–an imperative to optimize carrier investments in next-generation mobile broadband.

visiongain research said that heterogeneous networks (Hetnets) comprising of macro cells and a range of small cell solutions, namely microcells, picocells, carrier Wi-Fi and femto cells, is the solution for the rising wireless broadband capacity crunch. While the small-cells market is in its nascent stages and stakeholders are still considering best approach to deployment, there is movement: Femtocell vendors have succeeded in developing operational and automated deployment features that are critical to the small cell networks. And visiongain expects both picocells and carrier metrocells to become fully proven and complete solutions by 2013.

In addition, carrier Wi-Fi is a complementary technology to small cell technology and can act as both stress-relief for congested mobile networks and as an alternative in case of delays to the 3G/ 4G small cell technologies deployments, visiongain noted.

With commercial LTE still wet behind the ears, 2012 will be a year of strategic decision-making when it comes to small-cell architectures. Analysts agree femtos will be the first to be commercially proven out. "Our 2011 femtocell survey results indicate a roadmap for the evolution of the residential femtocell market toward more sophisticated usage of femtocell technology, but most operators will only be in the early phase of this journey over the next year," said Richard Webb, directing analyst for microwave and small cells at Infonetics Research.

Nonetheless, with carriers starting to roll out LTE, many are beginning to examine the real-world impact of a small-cell deployment in general on their plans. “Small cells are one of the ways we’re going to keep up growth,” said Verizon Wireless Executive Vice President of Network Planning Bill Stone, speaking at 4G World. He explained that layering small cells under the macro coverage will allow Verizon to use its spectrum more efficiently, allowing spectrum reuse for greater capacity, reducing backhaul needs and minimizing the load on the macro base stations.

"The bottom line is we need more spectrum and we need small cells to utilize it," said Stone. And indeed, carriers need to find a way to deliver capacity with a lower cost profile than would typically be associated with a macro base station deployment. The average outdoor small cell comes in around $5,000. And according to the Femto Forum, the savings to be had from reducing the amount of macro capacity required to deliver a good user experience (thus slowing the pace of macro buildouts) more than outweighs the cost of investing in the cells themselves. A study from Signals Research also finds that the customer lifetime value typically increases by two to 10 times in a small-cell scenario.

Taken together, an operator with 10 million LTE or WiMAX subscribers deploying femtocells to 10 percent of its base can realize amore than ten-fold return on its incremental femtocell investment, according to Signals Research. Even when the carrier gives away the femto for free, this can be fully funded if it enables the deferred buildout of just 4 percent to 10 percent of planned macrocells, it said.

The use of indoor femtos can also help operators address the issue of user expectations by getting real world data rates somewhat closer to the theoretical peaks that carriers advertise, Femto Forum noted. “The addition of femtocells to the network allows femtocell users to consistently receive much closer to the headline LTE/WiMAX data rates than those connected to macrocells... even when using the same channel as the macro network, when suitable mitigation techniques are adopted,” it said in its research note.

Small cells also offer the advantage of supporting new revenue-generating services...eventually. "The femtocell as the central hub of a fully fledged mobile home network is very much a long-term scenario. In the short term, improving the existing mobile experience (namely voice coverage and consistent data throughput) is the key femto goal in the consumer space," noted Webb." "The most prominent bolt-on femto-enabled services and applications coming to market by 2012 are virtual home phone numbers and media file sharing."

Despite the clear business case for deployment, there are significant challenges in implementing femtocells, driven by the sheer level of complexity involved in adding so many more base stations into the network. This diagram from Nokia Siemens Networks details the issues. "There are no lack of issues in small-cell deployments," explained Pepe Lastres, head of product marketing at Nokia Siemens Networks. "When you think about the addition of millions of small cells, having a service-oriented network becomes a very big component of the enabling part of this, along with a strong network management system."

It's worth it, he added: "As services become more complicated and demand for capacity is fluid, implementing small cells offers operators an end-to-end solution for bringing capacity to bear where it's needed, and that's critical to the success of 4G."