Capture new revenue opportunities

To date, industry discussions about small cells— sometimes referred to as femtocells or femtos — have been around fixing poor indoor coverage. Offerings such as Vodafone UK’s Sure Signal femto service have focused on the ability to provide a strong mobile phone signal in homes, businesses and in black spots. However, small cells can also be leveraged to create new advanced services and additional revenue opportunities. This additional small cell benefit allows communication service providers to monetize their knowledge of end-user behavior. By exposing small cell Application Programming Interfaces (APIs) , operators can enable the development and delivery of new intelligent applications and services that are valued by end users. This makes small cells a true business platform and an integral part of a complete application enablement strategy.

The potential to generate new revenue with small cells is a direct benefit of their design and functionality. These low power, wireless access points are, essentially, tiny cell stations. They use the same licensed spectrum as large cell stations to provide 5-bar signal strength to indoor or outdoor dead zones. As a result, they allow end users to connect standard mobile devices to a mobile network from homes, enterprises and metro hot spots where they would not normally have coverage.

A recent end-user survey commissioned by the Femto Forum and conducted by Parks Associates revealed that 56% of respondents and 84% of end users who use Wi-Fi^® find small cell capabilities appealing. More importantly, 72% of respondents said they would be willing to pay for advanced services enabled by small cells.^[1] This interest is attracting the attention of communication service providers worldwide. In fact, Dell’Oro Group estimates that shipments of small cell base stations will increase at a compound annual growth rate (CAGR) of 163% over the next 4 years to reach 61.8 million units by 2014.^[2]

Engaging new applications

To truly capitalize on end-user interest in advanced services, communication service providers can work collaboratively with third-party application and content providers to harness the full power of small cells. Each cell provides unique end-user usage and positioning information such as whether the mobile device is active in a voice or data session. Access to this information enriches the small cell APIs. This can be combined with network capabilities, such as location, presence, Quality of Service (QoS) and trusted security to enable application development by in-house or external application and content providers. By exposing these capabilities as APIs, communication service providers can facilitate the development of a variety of new presence and opt-in location-based services. For example:

• The end user’s mobile device could automatically register with the small cell to identify whether the end user is at home, work or a favorite coffee shop. If the end user is at home the location and presence information could be used to push online gaming, movie and television content to the user based on pre-defined criteria. If the end user is at work, the information could be used to initiate secure backup and software updates without user intervention. And if the user is at a coffee shop, the information could be used to deliver advertising and promotion messages from retailers in the area.
• A one family phone application would allow all of a family’s phones — both mobile and fixed — to share the home telephone number when at home. In this way, each mobile phone could receive calls made to the home landline on mobile handsets that are within range of the home small cell.
• Content sharing applications could allow users to share information between their mobile devices and other home devices such as large screen TVs and entertainment systems. This enables users to share music, video and photos with other family members.
• Real-time, online gaming could be enabled on mobile devices. With the higher throughputs and lower latency available from a small cell, users could participate in online games with family members or other players on the Internet.
• Because a small cell can detect a user’s presence within its coverage, it can make this information available to others at specific times. This option would enable parents to have a Short Message Service (SMS) notice delivered to them wherever they are, when their children arrive home.

It is also important to remember that in addition to enabling the new advanced services mentioned above, small cells can also enhance today’s applications that call for presence and location information. When applications are unable to locate end users because they are in a dead zone or can’t be seen by GPS satellites the application’s value is diminished. Small cells can provide the missing location information and enhance the value of existing applications.

Services monetization for today and tomorrow

While both existing and new applications offer communication service providers the opportunity to generate new revenue from end users, access to presence and location information is also a valuable commodity for which third parties may be willing to pay — with the users’ consent, of course. In fact, many communication service providers have already started working with third-party application developers to fully exploit the presence and location APIs that provide the basic building blocks for new intelligent applications and services.

To make these and many other services possible anywhere and at anytime the Alcatel-Lucent 9360 Small Cell solution includes femto-based small cells for use in the home, enterprise and public areas. This solution includes a network gateway that simplifies the network topology by presenting the small cell access points as a single identity to the network core. The solution also includes management tools to enable a fully functional small cell network that is truly ‘plug and play’ from an end-user perspective and zero touch from a communication service provider perspective. In addition to improving coverage and capacity the solution enables communication service providers and application and content providers to insert themselves into a new part of the value chain. With the small cell solution, communication service providers can charge for presence information similar to the way voice usage is charged for today thereby capturing new revenue opportunities.

To contact the authors or request additional information, please send email to enrich.editor@alcatel-lucent.com.

Footnotes

^[1]©2010, Parks Associates, U.S. Consumer Attitudes on In-Home Mobile Services and Femtocells

^[2]2010, Dell’Oro Group, Femtocell Report Five-Year Forecast 2010–2014