The Business Case for Picocells and Femtocells in the Enterprise Market

• 0. Summary
• 1. Deploying picocells and femtocells in the enterprise market will be challenging
• 2. Indoor base stations could help MNOs to attract enterprises
  • 2.1 MNOs must not neglect the enterprise market
  • 2.2 The provision of indoor services is an area of weakness for MNOs
  • 2.3 Indoor base stations could enable MNOs to counter the threat of alternative solutions
  • 2.4 MNOs should strive to meet the challenging indoor service requirements of the business market
  • 2.5 MNOs should apply commerical logic to the deployment of indoor base stations
• 3. Early movers are seizing opportunities with 2G picocells
  • 3.1 2G picocells are already commercially available and deployed
  • 3.2 Low-power GSM licences have been awarded in the UK and are suitable for picocell services
  • 3.3 Spring Mobil targets Swedish enterprises with picocell services
• 4. ARPU and transmission costs underpin picocell service viability
  • 4.1 Current standalone picocell services require 30 users or more to achieve financial viability
  • 4.2 The most sensitive aspects of the business case are ARPU and transmission
  • 4.2 There is substantial value in targeting smaller businesses
• 5. 3G femtocells have potential in very small businesses
  • 5.1 Opportunities for 3G femtocells exist beyond the consumer market
  • 5.2 3G femtocells could support non-voice services, but with possible transmission and capacity bottlenecks
  • 5.3 The potential for 3G femtocells to support greater user densities needs thorough investigation
• 6. Enterprise solutions require a number of factors to succeed
  • 6.1 Indoor base station equipment is just one component of an enterprise solution
  • 6.2 MNOs must target the weaknesses of WLAN services

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• Figure 0.1: Major revenue and cost elements of an MNO' s business case for indoor base station deployment in enterprises
• Figure 2.1: The scope of enterprise mobility
• Figure 2.2: Major revenue and cost elements of an MNO' s business case for indoor base station deployment in enterprises
• Figure 4.1: Breakdown of cost to MNOs per user per month for an enterprise picocell solution, for different numbers of users
• Figure 4.2: ARPU generated by an enterprise picocell service in three scenarios
• Figure 4.3: Number of service users required by a picocell operator to achieve a 10% revenue margin, given three different transmission solutions
• Figure 5.1: Incremental ARPU per month in two enterprise femtocell service scenarios
• Figure 5.2: Cost per user per month in two enterprise femtocell service scenarios
• Figure 6.1: Estimated up-front investment cost per user for a WLAN VoIP solution

• Table 2.1: The scope of enterprise mobility
• Table 3.1: Bids for low-power GSM licences in the UK
• Table 5.1: Typical average downlink throughput of GSM and W-CDMA family of cellular technologies in different environments
• Table 5.2: Two enterprise femtocell scenarios that achieve satisfactory financial return