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  3. > The Inside-out wireless networks for fixed operators: the technical and commercial challenges of HetNets

‘Inside-out’ is one way towards a converged world based on millions of small cells – fixed and cable operators have a real current cost advantage over mobile operators working ‘outside-in’.

The 'inside-out' approach to wireless network provision describes a strategy fixed and cable operators are adopting to develop low-cost, high-capacity vast national public heterogeneous networks (HetNets) and services on the back of their existing fixed broadband access infrastructure. All cells and access points operate in open-access mode, and additional capacity for areas with no coverage is provided on a wholesale basis by a mobile network operator. The approach could be successful, profitable, and
disruptive to legacy mobile operators.

This report analyses the technical and commercial challenges that operators adopting the ‘inside-out’ approach to wireless network roll-out will face.

The report:
defines the approach and investigates the business drivers and opportunities
assesses the technical challenges, including choice of spectrum, interference, cell identity management, the suitability of fixed broadband as backhaul and alternative approaches to fixed–mobile convergence (FMC)
assesses the commercial challenges around scale, distribution, wholesale contracts and pricing, and offers a top-level total cost of ownership model
provides recommendations for fixed, cable and mobile operators, as well as for network equipment providers (NEPs).


This report includes information on the strategies of the following companies.
Free Mobile
Google Fiber
Liberty Global
Republic Wireless
Scratch Wireless

Table Of Contents

The Inside-out wireless networks for fixed operators: the technical and commercial challenges of HetNets

Table of contents

6.Executive summary

7.Executive summary



10.Inside-out and other approaches to FMC

11.Inside-out: crowd-sourced HetNets for fixed operators

12.Several high-profile operators are actively considering the femtocell-based inside-out approach

13.Other fixed-mobile convergence (FMC) approaches are available

14.Business drivers and opportunities for fixed and cable operators

15.The original consumer femtocell business case was driven by poor coverage, but new business models will have more robust demand

16.The inside-out strategy is an opportunity for fixed network operators and MSOs to rejuvenate their telephony services

17.The inside-out model depends critically on a high relative volume of
at-home traffic and of traffic reachable by public small cells

18.Inside-out operators see an opportunity to undercut MNOs on the price of mobile voice and data

19.Unlimited mobile voice bundles are becoming more common, but this affects only the incremental, and not the actual, cost of voice services

20.Inside-out quadruple-play bundles make commercial sense only insofar as end users value the wired connection

21.Inside-out operators aim to capitalise on their fixed infrastructure assets to reduce the cost of mobile backhaul

22.Inside-out operators can capitalise on oversupply of mobile to force a good MVNO deal

23.Technical challenges

24.Little suitable spectrum is currently in the hands of potential inside-out operators

25.There is no shortage of suitable future spectrum, but most will be licence-exempt and the device ecosystems are immature

26.Using the installed base of fixed broadband connections for small-cell backhaul has several drawbacks

27.FMC options that are less costly than femtocells are available, but they have disadvantages

28.Radio interference management requirements increase as the number of cell sites and frequencies used increase

29.Self-organising networking (SON) reduces the operational difficulties and costs associated with small-cell networks, but it has risks

30.Interference between 2.4GHz Wi-Fi and 2.6GHz LTE can cause problems in the home router

31.Commercial challenges

32.Inside-out operators will have the scale for low customer-acquisition costs, but have credibility and brand challenges

33.Summary of additional costs and revenue

34.The cost of MVNO outfill is critical for the business case of an inside-out operator

35.An inside-out operator would have to balance the merits of per-unit or per-subscriber charges, but more-formal bitstream models may emerge

36.Inside-out models could prove both profitable and disruptive, but there are fixed start-up costs to overcome

37.Some broader implications of an inside-out approach

38.About the author and Analysys Mason

39.About the author

40.About Analysys Mason

41.Research from Analysys Mason

42.Consulting from Analysys Mason


List of figures

Figure 1: Companies covered in this report

Figure 2: The basic inside-out wireless network

Figure 3: Total and mobile consumer telecoms traffic by service type and location, 2013, Western Europe

Figure 4: Total and mobile consumer telecoms revenue by service type and location, 2013, Western Europe

Figure 5: Average retail revenue per mobile voice minute, selected markets, 2010-2013

Figure 6: Average retail revenue per minute by service type, selected markets, 2013

Figure 7: Voice minute allocations within mobile contract bundles, by country

Figure 8: Mass-market fixed and mobile revenue by network type, Western Europe, 2013

Figure 9: Average IP data traffic per month, by connection type, USA and Western Europe, and growth multiple 2013-2018

Figure 10: IP data traffic growth multiples by network type, USA and Western Europe, 2013-2018

Figure 11: Picocell roll-out costs for mobile operator, and potential savings for a fixed operator

Figure 12: MVNOs' market share of subscribers, 4Q 2013 compared with change in retail mobile revenue 2012-2013, Western Europe and Poland

Figure 13: Advantages and disadvantages of fixed-mobile convergence technologies

Figure 14: Illustrative example of cell distribution in mixed geotypes

Figure 15: 3GPP SON features grouped by functions

Figure 16: The 2.4GHz ISM band, contiguous bands, BT's spectrum holdings, and potential for interference

Figure 17: Details of selected fixed and cable operator MVNOs, Western Europe, 1Q 2014

Figure 18: Production cost of LTE networks by utilisation rate and average retail mobile broadband tariff per gigabyte, Western Europe, 4Q 2013

Figure 19: Main assumptions behind the inside-out mobile strategy model

Figure 20: Simplified model of the total cost of ownership of an inside-out mobile strategy, by cost centre, and mobile service revenue

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