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0 Summary 1 Indoor base stations could have a profound effect on the mobile industry 1.1 Indoor base stations provide an alternative to traditional outdoor cellular infrastructure 1.2 Indoor base stations are generating hype and uncertainty 1.3 Mobile operators and equipment vendors need to answer some fundamental questions about indoor base stations 2 Indoor base stations could have major benefits for mobile operators 2.1 Small, low-power, indoor base stations can achieve high­-quality local-area coverage 2.2 A diverse range of organisations are developing indoor base stations 2.3 Indoor base stations require a compelling business case, and they need to work 2.4 Indoor base stations may present opportunities in different market segments and with several wireless technologies 3 There is a major opportunity for 3G femtocells in the consumer market 3.1 The greatest opportunity for femtocells is with 3G rather than 2G 3.2 Operators need to adopt a large-scale approach to 3G femtocell deployment 3.3 The benefits of 3G femtocells will outweigh the costs if vendors achieve their predicted price points 4 Critical issues must be resolved before 3G femtocells can be deployed widely 4.1 Mobile operators need to be confident that implementation and performance issues have been addressed 4.2 Mobile operators need to consider several issues when they select 3G femtocell vendors 4.3 Mobile operators must carefully plan their introduction of 3G femtocells 4.4 Small operators are likely to be the first to deploy 3G femtocells 5 The implications of indoor base stations for 2G, 3G LTE, WiMAX and WiBro are mixed 5.1 Operators should not overlook the opportunity for picocells in enterprises 5.2 3G femtocell deployment could slow (or halt) 3G LTE adoption 5.3 WiMAX (and WiBro) indoor base stations would be dependent on fixed broadband services 6 Indoor base stations have profound implications for the telecoms industry 6.1 Indoor base stations will have a major impact on mobile operators’ network architecture and investment plans 6.2 Indoor base stations will help wireless to win the battle for voice, but will strengthen the role of fixed broadband services Actions Figures and tables Figure 0.1: Annual cost saving per customer for a small operator (with 5 million customers) deploying 3G femtocells Figure 0.2: Annual cost saving per customer for a large operator (with 15 million customers) deploying 3G femtocells Table 2.1: Fundamental differences between macrocells, microcells, picocells and femtocells Table 2.2: Main players that have announced the development of indoor base stations Table 2.3: Assessment of the opportunities for mobile operators with indoor base stations across different market segments and wireless technologies Figure 3.1: Annual cost per customer of upgrading a typical network from 10 000 to 25 000 macrocells Figure 3.2: Annual cost per customer for a small operator (with 5 million customers) deploying 3G femtocells to 60% of households by 2012 Figure 3.3 Annual cost per customer for a small operator (with 5 million customers) deploying 3G femtocells to 20% of households by 2012 Figure 3.4: Annual cost saving per customer for a small operator (with 5 million customers) deploying 3G femtocells Figure 3.5: Annual cost saving per customer for a large operator (with 15 million customers) deploying 3G femtocells Table 3.1: Description of different mobile voice pricing strategies and their potential impact on average voice spend per customer Figure 3.6: Impact on voice spend of different strategies for mobile voice pricing Figure 3.7: Average annual spend on fixed voice services, per household using fixed voice, 1Q 2006 Figure 3.8: Average annual spend on fixed broadband services, per household using fixed broadband, 1Q 2006 Table 5.1: Comparison of typical downlink throughputs for HSPA and 3G LTE for in-building reception in different operating scenarios