Qualcomm (NASDAQ:QCOM) recently took a stake in ip.access, a British femtocell maker. The undisclosed investment was made through Qualcomm’s European investment fund. This is a sign that Qualcomm is transitioning from its core competency – to design and develop high capacity wireless baseband technology – to eke out capacity gains through topology.
Before commenting on this latest Qualcomm move, it is important to understand femtocells. Femtocells are indoor base-stations designed to be connected to a broadband internet connection. These devices allow the same mobile device to be used for accessing voice or data through broadband. Femtocells also offer improved in-building coverage, reduced burden on the cellular network and seamless mobility to the user. While dual-mode handsets are seen as the fixed-line operators’ entry-point into wireless, femtocells are regarded as the mobile operators’ answer to it.
So, what is Qualcomm doing in this space? Talking about the investment, Frederic Rombaut, head of Qualcomm Ventures Europe said:
3G femtocells will have a very important role in future mobile network architecture…ip.access has an innovative approach to the 3G femtocell market that will enable our customers to enhance the delivery of 3G services to mobile users.
Disruptive Analysis’ Dean Bubley points out that Qualcomm has remained non-committal about femtocells so far shrugging off that it is “nothing to do with us really.” Evidently, this femtocell investment signifies a change in Qualcomm’s mindset. The company believes, and not without reason, that topology and network planning is the key to extracting more capacity. After all, there is a limit to the number of antennas that can be accommodated in handhelds.
When IS-95 was introduced in the 90’s, it offered a disruptive 10x capacity gain over the existing AMPS. The gains extracted from later standards have exponentially dropped. Most recently, the 3GPP Long-term evolution [LTE] offers incremental improvements over HSPA+. It is clear that we are getting closer to the fundamental limits possible through practical wireless systems. Indoor and edge-of-cell coverage will limit the user experience in tomorrow’s convergence device. This is where topology and microcells help.
It looks like Qualcomm, with its strategic investment in ip.access, is looking to create more capacity gains to carriers through well-designed, scalable low-cost, microcell-based networks. The company’s grounds-up approach to wireless systems design has spelt success right from its early days. I anticipate that the San Diego-based wireless giant will now look to apply theoretical notions to design optimal capacity topologies using picocells and femtocells.
In summary, the ip.access move is proof that Qualcomm is looking beyond its core competencies in wireless baseband. It is proof also that the company relentlessly continues to understand and assist service providers – the strategy that has been its biggest success factor. Finally, the company’s thinking that microcell-based networks will be the key to further capacity enhancement certainly bodes well for femtocells.
[All thoughts expressed here are those of the author's and do not necessarily reflect those of either Atheros Communications or TensorComm Inc.]