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Wednesday, March 24, 2010

Picocells and the return of the DECT guard band - New service in Netherlands

Many people forget that before the advent of femtocells, a similar technology - picocells - has been around since 2001 or earlier. Picos have more capacity, but are considerably more expensive than femtos, and have required more expensive controllers and specialised installation procedures.

While many picos have been deployed by mobile operators for cheap "fill-in" coverage, or used in niche locations like oil rigs, ships or small islands, a more interesting business model was "Low Power GSM", pioneered in the UK with the auction of the 1800MHz DECT guard band four years ago. This enabled multiple new operators to bid for low-cost licences for indoor wireless services, using a thin sliver of unused 2G spectrum - especially enabling low-cost or free indoor private cellular.

I wrote about this here and closely watched the evolution of service launches, although uptake out to be comparatively slow. Cable & Wireless launched a corporate service for clients including Tesco, and Teleware has had some success with its Private Mobile Network. Two years ago, the market status was still limited.

One of the big problems has been for the new "indoor" operators to gain some sort of MVNO or roaming deal with the incumbent "outdoor" service providers, so they can provide a universal mobile coverage service. Perhaps unsurprisingly, the traditional "macro" operators have been unwilling to assist their new indoor-only cut-price competitors.

But something more interesting is occuring in the Netherlands. I wrote about 4 months ago that LPGSM was being enabled on a licence-exempt basis. And one of the companies that is now exploiting it has solved the indoor/outdoor conundrum, as it is *already* an MVNE, operating on Vodafone's Dutch network. Teleena announced its converged service yesterday.

Now obviously this is just GSM - so perhaps not much use for today's 3G smartphone-toting executive who finds that data services are sent over EDGE when in the office. Nevertheless, I'm considerably more positive about this type of approach than enterprise femtocells, which I continue to believe are unlikely to make traction for many years.

6 comments:

Anonymous said...

Your prediction last time wasn't exactly spot on

"All things considered, it looks like the UK should be getting a pretty good selection of innovative GSM business models once the auctions are concluded. Definitely an area to watch out for - and which I suspect other regulators will be closely scrutinising."

and I don't buy the comment that national roaming has been the problem. Cable & Wireless have had national roaming with Orange for some time, they also have a huge corporate base. Their product is goo but if you think that their existing mobile suppliers will just watch these corporate customers walk away then think again. They will fight to keep all of them and hence Cable & Wireless have really struggled to gain traction.

My sources tell me that many of the licence holders haven't even pursued national roaming since they have now realised that the spectrum they have isn't really that useful as a mass market proposition. For niche providers like Teleware I predict a nice business out of this spectrum but it will remain niche.

Dean Bubley said...

Fair enough - although given that quote pre-dated the auction, the assertion of a "selection of innovative business models" seemed pretty reasonable given the diverse rogues' gallery of companies involved.

With hindsight I think there have been a few additional contributory factors - and I never really expected large enterprise to be the target market unless BT, Colt or C&W really stepped up to the plate. There's always the problem of stringing an operator's picocells off a corporate LAN - a problem that's only made worse for femtocells.

Smaller businesses have always been the theoretical sweet spot for corporate FMC-type offers, but the problem there has typically been sales and support.

Thinking through this now, there may also have been a specific issue around BlackBerry support. It presumably gets more complex to divert traffic to from a BES or a BIS service when there's both a local GSM network and a separate macro MVNO involved.

It will be interesting to see if the Dutch approach throughs up anything new. I suspect the challenge now is more about managing expectations around 2G-only indoors.

Paul Wade said...

Interesting thread, as a company that has actually deployed Private GSM schemes here in the UK ( yes we do have national roaming as well) we are surprised to find that our original thinking that the sweet spot was the lower end of the SME sector it in fact turned out to be a sub set of enterprise ( hospitals etc) who were looking at Private GSM not onyx on cost grounds but more interestingly around coverage and what benefits having a private GSM “platform” can bring i.e. using it for backhaul in place of Wi-Fi , DECT replacement, and as virtually no latency in SMS , pager replacement. The other area has been true M2M situations where the low number of SIM’s deployed has not justified the Marco networks deploying indoor infrastructure to provide an adequate signal.
So fully agree this is a niche offering but one ( glad to say) we are seeing increasing interest in.

Paul Wade said...

Interesting thread, as a company that has actually deployed Private GSM schemes here in the UK ( yes we do have national roaming as well) we are surprised to find that our original thinking that the sweet spot was the lower end of the SME sector it in fact turned out to be a sub set of enterprise ( hospitals etc) who were looking at Private GSM not onyx on cost grounds but more interestingly around coverage and what benefits having a private GSM “platform” can bring i.e. using it for backhaul in place of Wi-Fi , DECT replacement, and as virtually no latency in SMS , pager replacement. The other area has been true M2M situations where the low number of SIM’s deployed has not justified the Marco networks deploying indoor infrastructure to provide an adequate signal.
So fully agree this is a niche offering but one ( glad to say) we are seeing increasing interest in.

Steve Kennedy said...

Mundio Mobile (formerly Mapesbury Communications) have launched a GSM hotzone in Newham with plans to roll-out in other areas. They have a roaming agreement with T-Mobile in the UK and other countries.

They are looking at offering some interesting services, unfortunately the MNOs are the biggest hurdle to new services as they make life as difficult as possible.

Anonymous said...

..On the one hand you can imagine the twitching that must go on in MNO boardrooms around the country when private GSM companies threaten to totally overthrow them and churn overnight their biggest enterprise customers...(cough)..

Seriously though I do find it a little odd that an MNO hasn't taken the bull by the horns and adopted the services of one of the LPGSM licence holders even if its primary use is to attempt to churn its enterprise competition. Why not try to grab some of the business that you do not already have? Also, some of the LPGSM holders, such as Teleware for instance, do offer additional proven services above and beyond LPGSM that do have very definite business benefits that would, if wrapped up in a MNO bundle, be very attractive to the potentialy swaying enterprise customer.