A comparative study of deployment options,
capacity and cost structure
for macrocellular and femtocell networks
Jan Markendahl and Östen Mäkitalo
Wireless@KTH, Royal Institute of Technology
Stockholm, Sweden
[email protected], [email protected]
Abstract — In this paper we will compare the cost & capacity
performance of femtocell and macrocellular networks. The
motivation is the possibility to use femtocells as complement or as
replacement of wide area networks and hence to save investments
in macrocell networks. In this study the femtocells thus are used
as a tool for operators to reduce network costs for mobile
broadband. This represents another business case than the often
presented cases with focus on improved indoor coverage in
homes with focus on voice services. Our techno-economic analysis
is made as a comparative case study where capacity and cost is
analyzed for wireless broadband deployed in a newly built office
area with high user density. In addition to wall penetration losses
we take into account; the level of user demand, the density of
existing macro base station sites, the recent improvements in cost
and spectral efficiency for radio access technologies, and the use
of wider system bandwidths. The main finding of the study is that
femtocell solutions, for the considered demand levels, are more
cost efficient when new macro base station sites need to be
deployed, otherwise macrocell solutions are more cost-efficient.
Keywords –Network deployment; dimensioning; mobile broadband;
cost-capacity performance; techno-economic analysis; spectrum
allocation; wall penetration losses; off-loading; LTE; HSPA
I.
INTRODUCTION
The rapid increase of mobile broadband (MBB) services in
combination with flat fee subscriptions has resulted in a
decoupling of traffic from operator revenues. Hence, improved
cost-efficiency in network deployment and operation is getting
more important for operators. One option is to offload data
traffic from the macrocell layer to femtocells and hence reduce
the need for investments in “more costly” macrocell networks.
Offloading is thus another benefit of femtocells [2][15][18],
than improved indoor coverage for voice services that often is
discussed for use in homes or small offices. The focus of our
analysis is on public access for MBB services.
In order to compare the cost-capacity performance of macro
and femtocell networks you need to consider other aspects than
the often discussed wall attenuation and indoor coverage. In
this paper we will analyze deployment for different levels of
data usage taking into account existing base stations sites that
can be re-used. We will also include the recent development
when it comes to cost and spectral efficiency of radio access
technologies and also the impact of use of more bandwidth.
A number of papers have been published on joint macrocell
and femtocell networks, but most papers deal with mechanisms
and technical performance rather than deployment strategies
and the capacity - cost performance. Throughput for different
scenarios are presented in [1][2] and a comparison between
open and closed access is presented in [3], data rates for indoor
users served by macrocells and femtocells are compared in [4]
and capacity and coverage statistics is presented in [5].
Analysis of local and indoor networks has been presented
for WiFi hot spots and private networks [7][8][9][10][11]. The
focus in these studies is on business models for the local
operator, cost and deployment aspects are not covered. Techno
economic analysis from a mobile network operator perspective
has been performed in a number of large projects like TERA,
TONIC and Ecosys, see e.g. [11] for analysis of different
deployment strategies and business cases. Analysis of cost
structure and deployment strategies for heterogeneous access
networks is presented in [12][13]. Femtocell cases are not
discussed but a detailed analysis of complementing wide area
networks with local WLAN access points is presented in [12].
Analysis of cost structure and business cases for
deployment of MBB is presented in [14][15]and analysis of
femtocell deployment in [16][17][18]. The conclusions about
the profitability differs in these papers but they have the same
working assumptions; HSPA type of technology, use of 5 MHz
of spectrum and the estimates of cost of radio equipment. If we
compare the resulting cost to capacity ratio used in these papers
with estimates from “4G” contracts late 2009 in the Nordic
countries large differences can be identified. Now the cost for
radio equipment for a three sector site supporting 20 MHz is
well below 10k€. The cost capacity ratio is 20 - 40 times lower
than in the referenced papers [14-18].
The objective of this paper is to make a more “up to date”
comparative analysis between macrocell and femtocell
deployment taking into account the recent developments in
spectrum efficiency, lowered prices of radio equipment and the
use of system bandwidth up to 20 MHz. The focus is on public
access for MBB services and not on voice services in homes.
The paper is outlined as follows; section II describes the
analysis approach, the models and assumptions. Section III
contains the results and in section VI we discuss issues related
to the base station density and the over-provisioning of
femtocell capacity. A summary is found in section V.
TABLE I.
II.
CAPACITY FOR A THREE-SECTOR SITE (MBITS PER SECOND)
METHODOLOGY, MODELLING AND ASSUMPTIONS
In this section we will describe the analysis approach, the
assumptions and the scenario that is used in the analysis. We
will compare the cost-capacity characteristics of macrocellular
and femtocell deployment. The analysis includes a network
dimensioning part and a cost structure modeling and analysis
part. Additional analysis includes strategies to compensate for
wall penetration losses and to guarantee a specified data rate.
A. Scenario description
We consider construction of a new business park to be built
2010. There are 10 five floor office buildings, each with 1000
persons, in the 1 km2 area; see Fig 1.The facility owner wants
to investigate the options for provisioning of cellular wireless
data services in the buildings. We will compare the costs for
deployment and operation of networks using outdoor macro
base stations with the cost for indoor femtocell solutions.
We both consider the cases that all macro base station sites
need to be deployed from start and that there are sites that can
be re-used. Up to 20 MHz in the 2,6 GHz band will be used for
the macro-layer. In the analysis on strategies to compensate for
wall penetration losses we include both building a denser 2.6
GHz network as well as the use of the 800 MHz band.
B. User demand
Our analysis will start with the user demand described by
the number of users per area unit and the data usage (GB) per
user and month. This is converted to a required capacity per
area unit (Mbps/ km2) computed for a number of “busy hours”.
The demand is assumed to be 14,4 GB per user and month. For
the dimensioning two levels of ”wireless usage” are
considered: 10% and 50 % of the total monthly usage, this
corresponds to average user data rates of 20 and 100 kbps
respectively during the 8 busy hours.. For operators in Sweden
the MBB usage 2009 is 2 – 5 GB per user and month.
In the area in our example we have 10 000 office workers.
The assumed 14,4 GByte per month and professional user
equals 720 MB per day and 90 MB per busy hour (assuming 8
busy hours per day). The total data demand for the 10000
workers is 2,0 Gbits per second (Gbps). For network
dimensioning we need to consider the share that is assumed to
be carried over the wireless connections. The “low” and “high”
level estimates of 10% and 50 % mean 200 Mbps and 1 Gbps
for the total “wireless usage” in the area.
Spectral efficiency
(Cell average)
Allocated Bandwidth
5 MHz
10 MHz
20 MHz
0,67 bps per Hz
10 Mbps
20 Mbps
40 Mbps
1,67 bps per Hz
25 Mbps
50 Mbps
100 Mbps
C. Coverage and capacity of radio access technologies
Different number of base stations is needed in order to
satisfy the demand depending on the coverage and capacity
characteristics of different technologies. We consider two types
of radio access technology each with spectral efficiency of 0,67
and 1,67 bps/Hz respectively. These numbers can represent
current HSPA evolution and future releases of LTE [19][20].
Assuming three-sector sites these values of spectrum efficiency
implies a site capacity of 10 Mbps and 25 Mbps for each chunk
of 5 MHz bandwidth; see Table I.
In our example we need to cover 1 km2 area using a number
of base stations and we need to make sure that the coverage is
sufficient for the data rates of interest. We use the analysis in
[21] where the radio range is estimated for different frequency
bands for a 1 Mbps data service using a LTE type of system
and 10 MHz of bandwidth. With the assumptions in [21] on
antenna heights, wall propagation losses (20dB) and on
antenna diversity the ranges for indoor coverage are 1.5 km at
900 MHz and 0.7km at 2.5 GHz for urban deployment. Since a
cell area of 1 km2 corresponds to a cell radius of 0,57 km our
requirements on average user data rates during busy hours (~
0,10 Mbps) would be met even at the cell borders.
Using 20 MHz of spectrum and the technology with higher
spectral efficiency the low and high demand levels (0,2 and 1,0
Gbps) can be met by deploying 2 and 10 macro base stations
respectively. With the site capacity number in table I we can
estimate the number of sites required to satisfy the user demand
with different amounts of bandwidth, see Fig 2. Use of the
technology with lower spectral efficiency and 5 – 10 MHz of
bandwidth will result in a high number of base stations sites, 50
– 100, in order to satisfy the demand in the 1 km2 office area.
In our comparison we will use the technology with high
spectral efficiency and macro base stations using 20 MHz at
2,6 GHz or 10 MHz at 800 MHz. Analysis of co-channel and
adjacent channel operation show that different types of
interference will lead to performance degradation
[1][22][23][24]. Hence, in this paper we will assume that
femtocells are deployed in a separate frequency band
Number of base station sites
120
100
Spectral eff = 1,67
(LTE type)
80
60
Spectral eff = 0,67
(HSPA type)
40
20
0
5
10
15
20
Used spectrum (MHz)
Figure 1. Office buildings in the scenario used in the cost analysis example
Figure 2. Number of base station sites as function of allocated bandwidth
For the femtocell deployment we assume access points
using 5 MHz of spectrum. In our comparison we will use the
value 10 Mbps for the femtocell capacity. However, with the
levels of user demand assumed in this study (< 0,1Mbps) the
femtocell capacity will not be the limiting factor, see also
discussion in section V.
D. Network dimensioning
The macro base station network is dimensioned to meet the
user demand in terms of average busy hour data rate over the
whole area. Users are allocated to base stations assuming
sharing of the offered capacity, e.g. 10 users can get on average
0,5Mbps when sharing a 5 Mbps base station assuming “best
effort type” of usage. For the dimensioning of the femtocell
networks we will use two other approaches:
User oriented; a number of users (2 or 8) are allocated to
each access point (no matter the demand)
Coverage oriented; a number of access points (8 or 16) are
allocated for each floor in the building
However, the average busy hour data rate per user does not
reflect any requirements of guaranteed availability or data rate.
Hence, in the discussion section we will provide examples of
dimensioning taking into account the data rate guarantees
resulting in the probability for a user to get a specified data
rate provided a specified of capacity of the base station.
E. Impact of propagation losses
1) Wall attenuation for macrocell deployment
To estimate the effect of the total wall attenuation we use
the Okumura-Hata propagation model for an urban macrocell
[24]. For a certain data rate a maximum propagation loss can
be calculated. Assuming the maximum cell range to be R (km),
the total wall attenuation = W (dB) , Kmacro a constant and a (h)
a correction for the height h of the mobile antenna, then the
propagation loss L can then be expressed as
L = Kmacro + 35,2 log(R) + W – a (h)
(1)
If we assume an antenna height of 30 m for the macro base
station and the mobile receiver to be 1,5 m above ground then
for frequencies 800 - 900 MHz the constant Kmacro = 125 – 126
and for frequencies 2,1 – 2,6 GHz Kmacro = 136 – 138. While h
is about 1,5 m for ground floor it may be about 10 m for the
third floor. In the latter case a (h) is about 5 dB.
2) Propagation and wall attenuation for femtocells
Inside a room the criteria for free space propagation are met
implying the formula for the propagation loss L dB.
L = Kfemto + 20 log D
L = 98,8 + 20 log D + n W + m F
(4)
At a distance D of 50 m L = 72 + nW + mF
This figure is much smaller (about 60-70 dB) than the
propagation loss from the macrocell when the outer wall
attenuation (15 – 25 dB) is taken into account. This implies that
very low power can be used for the femtocell.
The attenuation between two adjacent rooms is normally
only a few dB while the attenuation between floors is much
higher (up to 20 dB or more) of construction reasons. This has
advantages from interference point of view between the
femtocells. The risk of co-channel interference is reduced in
particular between femtocells on different floors.
F. Cost structure modelling and analysis
The cost structure analysis is in the form of a comparison of
capacity expansion using only femtocells or macro base station
solutions satisfying the same user demand. For the modeling of
capacity demand and the cost structure break down we use the
methodology proposed and used by Johansson [12]. We will
take into account both capital expenditure (CAPEX) and
operational expenditure (OPEX) for the two types of
deployment. The main elements in the cost structure model are:
Investments in radio equipment, base station sites and
transmission, installation and deployment costs, site leases,
costs for leased lines and costs for operation & maintenance.
We have assumed that the cost for deploying a new macro base
station site in the urban area is 100 k€ including transmission.
Cost for upgrading an existing site is estimated to 10 k€. The
cost for radio equipment supporting three sectors and 5–20
MHz is estimated to be 10 k€. Estimates of the OPEX
components are shown in table II. In the analysis we will use
the number 30 k€ per year for a new site and 10 k€ per year
when an existing site is re-used.
For the femtocell solutions we use data from a WLAN
large scale deployment project running over a couple of years
and with several hundred access points 1 . On average the
deployment of one access point is 1 000 € with roughly equal
shares (20-30%) for the following cost components: Access
point equipment, planning & installation, transmission and the
share of the AP controller and management system. For the
femtocells we estimate the annual operational cost to be 500€
per access point. This corresponds to a broadband connection
with quite a “high” yearly price. For both macro and femtocell
networks transmission costs are included assuming that a
backbone is already build out.
TABLE II.
(2)
ESTIMATES OF OPEX FOR MACRO BASE STATION SITES
OPEX component
(Kfemto is a constant; D is the distance femtocell – terminal)
Site lease
Kfemto= 32,4 + 20 log (f) (Kfemto= 98,8 for f = 2,1 GHz) (3)
Leased lines
Outside the room we have to take into account wall
attenuation W and floor attenuation F. To the free space loss
above we have to add the wall and floor losses which are
proportional to the number of walls n and floors m the signals
have to penetrate. The equation now reads:
12 k €
O&M
5 – 10 k €
Power
3–5k€
TOTAL
1
Annual cost
5 – 10 k €
Comment
Downtown/City area
1 -2 k€ per E1
5–10 % of total CAPEX
25 – 37 k €
Interview with Per Lindgren, David Lundberg, Uppsala University
III.
CHANGE OF BASE STATION DENSITY (N) REQUIRED TO
COMPENSATE FOR ADDITIONAL WALL ATTENUATION (W)
TABLE V.
RESULTS
A. Base case
With the assumed capacity and CAPEX figures for the
macrocell and femtocell solutions it is straightforward to
estimate the number of base station sites and femtocell access
points using the different approaches outlined in section II D.
These numbers together with estimated CAPEX and deployed
capacity is presented in tables III and IV. Our initial
assumption is that new macro base station sites need to be
deployed. For the low demand level the CAPEX for femtocell
and macrocell networks are equal. With the coverage approach
the femtocell solutions are cheaper for the high demand level.
Using the user oriented approach with 4 or 8 users per access
point the femtocell network is more expensive but the cost is in
the same order of magnitude as the macrocell network.
However, this situation is drastically changed if i) existing
macro sites can be re-used or if ii) the wall penetration is so
large that it need to be compensated for in some way, see next
subsection. The case with re-use of base stations sites is
included in table IV, i.e. no site costs are included which
results in lower costs than for any of the femtocell solutions.
B. Case with compensation of wall penetration losses
We will do a sensitivity analysis for the case where the wall
penetration losses exceed the assumed 20dB used in the base
case. The outer wall attenuation varies very much and can be
up to 25 dB or more for concrete or brick walls in urban areas.
The walls between rooms in a building normally have a few dB
of attenuation. So inside a building the total attenuation is the
sum of the outer wall attenuation and a number of inner walls
attenuation and possibly also from floors. Let assume that we
need to compensate for another 12 dB of attenuation.
TABLE III.
INVESTMENTS AND DEPLOYED FEMTOCELL CAPACITY
Number of
femtocells
CAPEX
Wall Attenuation (dB)
N
0
5
10
15
20
1
2
3,7
7
14
We will look into two compensation strategies
• Deployment using the 800 MHz band
• To build a denser network in the 2.6 GHz band
The difference in path loss between operation in the 800
and the 2.6 GHz band is around 12 dB. Hence, the same
number of sites as in the 2.6 GHz base case could be used, i.e.
2 and 10 for the different demand levels. According to our
assumptions only 10 MHz is available in the 800 MHz band
and using table I we can conclude that we need 4 and 20 base
stations sites for the low and high demand levels respectively.
If no 800 MHz band is available the operator needs to
decrease the cell size for the 2.6 GHz network. By using the
formula (1) for different values of the wall penetration loss W
the corresponding values for cell ranges R that compensates for
the loss W can be calculated. This can be used to calculate the
number N of base stations to cover the 1 square km area. In
table V we can see that W ~ 12 dB corresponds to N = 5.
In the summary in table VI we can see that all of the
strategies that lead to deployment of a large number of new
sites are very costly. Use of the 800 MHz band is comparable
to femtocell deployment cost for the low demand level but
higher for the high demand level. However, re-use of existing
sites is very cost-efficient even when many sites need to be
equipped with new radio transceivers.
Total capacity
Coverage approach
TABLE VI.
4 femtocells per floor
200
0,20 M€
2000 Mbps
8 femtocells per floor
400
0,40 M€
4000 Mbps
INVESTMENTS AND DEPLOYED MACROCELL CAPACITY IN
ORDER TO COMPENSATE FOR WALL PENETRATION LOSSES
Number of
sites
CAPEX
Total
capacity
Deploying new 800 MHz sites
User oriented approach
8 users per femtocell
1250
1,25 M€
12 500 Mbps
4 users per femtocell
2500
2,50 M€
25 000 Mbps
TABLE IV.
INVESTMENTS AND DEPLOYED MACRCELL CAPACITY
Number of
sites
CAPEX
Total capacity
Low level demand
4
0,48 M€
200 Mbps
High level demand
20
2,40 M€
1000 Mbps
Low level demand
4
0,08 M€
200 Mbps
High level demand
20
0,40 M€
1000 Mbps
Reusing sites for 800 MHz
5 times more new 2.6 GHz sites
Deploying new sites
Low level demand
2
0,24 M€
200 Mbps
Low level demand
10
1,20 M€
1000 Mbps
High level demand
10
1,20 M€
1000 Mbps
High level demand
50
6,00 M€
5000 Mbps
5 times more re-use 2.6 GHz sites
Reusing existing sites
Low level demand
2
0,04 M€
200 Mbps
Low level demand
10
0,20 M€
1000 Mbps
High level demand
10
0,20 M€
1000 Mbps
High level demand
50
1,00 M€
5000 Mbps
TABLE VII.
CAPEX, OPEX AND NET PRESENT VALUE (HIGH
DEMAND)
Deployment type
CAPEX (M€) OPEX (M€) NPV (M€)
Femtocells
"8 AP per floor"
0,4
0,2
1,31
" 8 users per AP"
1,5
0,625
4,34
Macro 2,6 GHz
Base case - new sites
1,2
0,3
2,77
Base case - re-used sites
0,2
0,1
0,65
5 times denser - new sites
6
1,5
12,82
5 times denser - re-used sites
1
0,5
3,27
Macro 800 MHz
New sites
2,4
0,6
5,13
Re-used sites
0,4
0,2
1,31
EXAMPLES OF BASE STATION DENSITIES
(URBAN AREAS IN SWEDEN )
TABLE VIII.
Name and type of area
Total density
of sites
Typical densities
for operators
Residential area in Uppsala
~6 per km2
1 3 per km2
Residential area Akalla
~ 14 per km2
3 5 per km2
Central part of Uppsala
~ 20 per km2
3 8 per km2
Industry area Kista
~ 50 per km2
7 20 per km2
Central part of Stockholm
~ 130 per km2
20 40 per km2
a.
Numbers derived from PTS “Transmitter map” web page, December 2009
V.
IV.
COST ANALYSIS
In order to fully compare different deployment options we
also need to include the operational expenditure (OPEX) in the
analysis. Table VII presents the resulting CAPEX, OPEX and
Net Present Value (NPV) for different types of deployment.
The NPV analysis is done for 5 years assuming that all
investments are made year 1, with a discount rate of 5 % and
assuming that the OPEX is increasing 10% each year.
From a cost perspective the choice between solutions based
on femtocells or macrocells is not primarily about the cost of
the radio equipment. The key issue is if new macro base station
sites need to be deployed or not. This drives the CAPEX but
also result in higher OPEX compared to the case where sites
can be re-used and the OPEX can be shared between the
existing (voice) services and the mobile broadband services.
It is also shown that a dense deployment of femtocells is
less cost efficient. Even if the femtocells were for free, the
installation, cabling and operation results in high overall costs
due to the large number of femtocells. We believe that the most
important characteristic of the femtocell deployment is that it
provides “usable” resources. Compared to the macrocellular
case there is no need to deploy additional capacity in order to
compensate for propagation loss, see also section IV B.
Figure 3. Base station sites in Kista area (circles = GSM, squares = 3G)
DISCUSSION
A. Density of macro base station sites
In the analysis of our example cases we have seen both low
numbers of base station densities, 2 – 4 per km2, as well as
large numbers, 20 – 50 per km2. The latter figure is for the high
demand level in combination with denser deployment in order
to compensate for additional wall penetration losses. Are these
numbers realistic compared to real deployment scenarios?
A small survey of the locations of existing base station sites
in the Stockholm area results in the base station densities
shown in table VIII. These results indicate high densities in
industry and downtown areas. In total 50 – 100 sites per km2
and 10 – 40 sites per km2 for each operator. Hence, in areas
with existing sites the strategy to meet the demand for mobile
broadband services should be based on site re-use and
deployment of macro base stations using as much bandwidth as
possible in the bands available for the operator. However, in
areas without any existing infrastructure the situation is
different.
The high density of base station sites, see also Figures 3
and 4, implies small cells with cell radiuses in the order of 100
– 200 m. Hence, the link budget would be “good enough” in
order to ensure reasonable high data rates even at indoor
locations at the cell borders.
Figure 4. Base station sites in Stockholm (circles = GSM, squares = 3G)
TABLE IX.
NUMBER OF SERVED FEMTOCELL USERS USING THE TWO
APPROACHES “AVERAGE THROUGHOUT “AND “GUARAANTEED BIT RATE”
No served users with
average throughput
0,10 Mbps
No users with 95 %
probability of being
served with 1,0 Mbps
2 Mbps
20
4
3 Mbps
30
9
7 Mbps
70
37
Cell capacity
B. About over-provisioning of femtocell capacity
In all the femtocell deployment examples above the
resulting capacity is well above the user “demand levels”. The
reason for this is the used dimensioning approach based on
limited number of users per femtocell base station or the
number of base stations per floor. This over-provisioning of
capacity can be exploited in two ways: i) to provide
“guaranteed” data rates, ii) to offer a “future proof” solution for
higher demand levels. The real office traffic may be of a
different nature with a number of transmissions of varying
length at a higher data rate suitable for the actual service. Many
applications require 1 Mbps or more. Using tele-traffic theory
(and the Erlang B loss formula.) we can estimate the
probability of the users getting service when guaranteeing a
certain data rate (e.g. 1 Mbps) for various cell capacities. For
the case of an average data rate of 0,1 Mbps the usage would
be 10% of the time corresponding to a traffic load of 0,10 E
(Erlang). In table IX we show the difference in number of
served users between the two approaches “average throughout
“and “guaranteed bit rate”. It illustrates how the “non –used”
femtocell capacity can be exploited when only few users are
connected to a femtocell base station. Femtocells that can serve
more users (16 – 32) have recently been announced.
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VI.
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We have compared the cost-capacity performance for
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