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Permeating Walls: Operators focus on strengthening in-building coverage

October 06, 2017
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In the era of rising connectivity, ensuring any time, anywhere coverage has become crucial for operators. Therefore, all operators in India have ramped up their macrocell networks substantially to improve outdoor connectivity though investments in improving indoor coverage have been limited so far. However, the deployment of in-building solutions (IBS) is now emerging as a key focus area as 60-70 per cent of the traffic is being generated indoors. A rising trend among operators, the adoption of IBS would help them improve the quality of service (QoS) and earn additional revenues by increasing in-building minutes of usage (MoU). These solutions typically provide telecom connectivity in enclosed premises such as residential buildings, offices, shopping malls, restaurants, hotels, hospitals, airports and railway stations that have zero coverage or poor network connectivity. This results in enhanced customer experience, and ensures call continuity with better voice quality as well as steady video and data traffic flow.

In recent years, operators have moved beyond traditional distributed antenna systems (DAS)-based IBS deployments towards Wi-Fi and small cell solutions for augmenting network capacity. Meanwhile, the growing opportunities in the IBS space have attracted tower companies, which are now planning to offer small cell solutions to generate additional revenues. However, the high costs of deploying small cells as well as an underdeveloped ecosystem for next-generation technologies have been key challenges in the uptake of these solutions in India, restricting most of these deployments to trials and pilot runs. A look at the evolving IBS ecosystem in India:

Growth drivers

• Launch of 3G/4G services: The launch of 3G/4G services has increased indoor data usage. People have started consuming huge volumes of data on the premises and have become conscious of call drops and slow data speeds. The situation becomes worse when a signal drops while downloading data, in which case users need to begin all over again. This may result in a bill shock for consumers during online monetary transactions, besides putting the user information at risk.

• Increasing use of wireless devices indoors: The majority of the workforce employed by enterprises today uses smartphones and tablets indoors to exchange huge volumes of data with corporate servers and the cloud. However, macrocell networks are not capable of providing reliable coverage and capacity on the premises. Therefore, operators need to deploy IBS for providing consistent connectivity between technologies and networks when employees and their connected devices move in and out of office buildings. Besides official purposes, people have started using smartphones/tablets for accessing social media networks at airports, hotels, malls, etc., indicating a high indoor data demand in the coming years.

• Focus on subscriber retention: Subscribers today have a host of operators to choose from. Further, services such as mobile number portability have eased the process of switching operators. The increasing subscriber churn has become a key cause for concern for operators during the past few years. In such a scenario, it is crucial for operators to outperform their peers in terms of service quality and network coverage indoors as well as outdoors to ensure customer loyalty.

Solutions and strategies

There is no individual IBS that can cover all building types and meet operator and user demand in an optimal and cost-effective manner. However, there are various solutions, if used together, depending on the nature of the building and the telecom service usage, can enhance indoor coverage. The most popular amongst these are DAS and Wi-Fi networks, while small cells are also emerging as a key solution. These technologies are deployed in a building after factoring in its geographical location, device ecosystem and existing coverage. In areas with limited cellular coverage, an existing Wi-Fi network can be leveraged by operators as a low-cost alternative to offload traffic. This is best suited for residential and enterprise domains. For larger spaces such as convention centres, malls, airports and stadiums, DAS can be used. The technology involves the allocation of wireless spectrum to a network of antennas in a building for improved and uniform coverage. These antennas can also be shared by several operators.

Meanwhile, small cells such as femtocells, picocells and microcells are used to complement operators’ wireless macro network in homes, offices, public venues, etc. The technology is similar to installing miniature cell towers on building premises. When used in combination with other network management technologies such as macrocells and Wi-Fi offloading, small cells provide better wireless coverage for end users and help operators manage data traffic in a cost-effective manner. While femtocells are suitable for residential buildings and small offices, picocells can be deployed in medium/large offices and indoor public spaces. In recent times, enterprise femtocells have emerged as a promising technology to deliver high capacity coverage inside offices, while serving as a simpler, low-cost alternative to traditional IBS. These help enterprises in moving all communication services to mobile devices, which boosts mobile data ARPU for operators.

Upcoming business models

While there are three major types of IBSs, their deployment in buildings depends on the operator’s business model. Under the traditional carrier/operator-based business model, the operator bears the total cost of an IBS project. It is solely responsible for equipment, cabling and other installation expenses. Such a model ensures customer retention by minimising client churn and leads to a long-term relationship with clients, thus ensuring a steady flow of revenue. Under the enterprise-led model, enterprises pay for equipment, cabling and installation works while operators provide connectivity through technologies such as radio frequency (RF). Since it is the enterprise that funds the project, there is no long-term association with any service provider. In fact, for connectivity support, organisations depend on a minimum of two service providers. An emerging business model is the neutral host model, wherein a third party – the solution provider – pays for the system set-up and leases the access rights to operators. The carrier-neutral IBS providers offer end-to-end services including the acquisition of right of way (RoW) for buildings, and planning, deployment and maintenance of the IBS infrastructure. The neutral host incurs the capex for the project and bears all performance-related risks. It is also responsible for adding technical value to the project. The model promotes infrastructure sharing, which results in cost optimisation while improving on-premises connectivity. In this model, building owners have no say in the deployment of additional infrastructure. The ownership of wireless assets lies with the host who benefits from recurring revenue by leasing the assets to other service providers. Airports worldwide adopt this model to provide seamless connectivity to travellers.

Currently, Ubico Networks, a carrier-neutral IBS solution provider, is in talks with some of the telecom operators in the country to deploy on-premises solutions under the neutral-host model. Further, Quippo, Kavveri Telecom Infrastructure and GTL Infrastructure Limited are some of the companies that are active in the IBS space and provide solutions under the same model. While Kavveri has recently signed a 10-year contract with a telecom operator, GTL has connected over 30 buildings in the country with IBS under the neutral-host model.

Stakeholder initiatives

In the telecom industry, operators have been at the forefront in deploying IBS. Reliance Jio Infocomm Limited (RJIL) has been executing one of the largest small cell deployments in the world. The operator deployed over 100,000 small cells during 2016 and aims to take this count to 150,000 during 2017. As part of its deployment strategy, RJIL is planning to outsource a part of small cell deployment to local cable operators owing to their extensive coverage in residential areas. Meanwhile, Bharti Airtel has been in discussions with government bodies and the Ministry of Urban Development to install 7,000-8,000 small cells at bus stops and street poles in cities. Further, the launch of carrier aggregation technology across Airtel’s 4G network has been one of the key drivers for small cell deployment by the operator.

In addition, tower companies have forayed into the IBS space and announced plans to deploy small cells to increase their revenues. Tower companies such as the American Tower Corporation (ATC) and Bharti Infratel have started exploring avenues in this space to create additional revenue opportunities. ATC is currently testing small cell opportunities in India. However, according to industry experts, tower companies would have to spend $10 billion between 2017 and 2022 to get a strong hold in the small cell segment.

Challenges and outlook

While IBS is slowly gaining traction in India, there are many issues that impede its deployment and uptake. In-building deployments in the country are currently undertaken through commercial agreements between the mobile operator and the building owner/building developer/resident welfare association. Operators need to work out the economics of projects with the developers of new and upcoming buildings or the cooperative societies and welfare associations of existing apartments. Working out a commercially beneficial agreement with real estate developers and building (cooperative societies and associations) owners is a major challenge. Apart from this, there is a need to coordinate with multiple agencies and obtain RoW clearances.

The speed of deployment is often affected due to delays in negotiations by building owners/building developers and high rents charged by them. In some cases, only a particular operator is allowed to set up the telecom infrastructure and other operators are denied access, thus creating an artificial barrier. Such practices limit not only competition, but also consumers’ choice. Moreover, ensuring round-the-clock power supply and enough space for setting up diesel generator sets in buildings is a complicated process. Even the presence of a small number of customers in a building will require operators to invest in IBS, leading to a disproportionate spend on coverage as compared to the revenue derived from the site. Further, providing coverage in the common spaces of a building such as basements, elevators and entrance lobbies does not make economic sense for operators. Therefore, these areas are either left uncovered or are connected at a disproportionately high cost.

Challenges notwithstanding, the deployment of IBS will remain an area of interest for telecom operators and become an integral part of their strategies to sustain in an immensely competitive industry.

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