Femto-Cells: Problem or Solution? A Network Cost Analysis

Next-generation wireless cellular networks are likely to be multi-tiered, consisting of a macro-cell tier based on the traditional operator-deployed macro-cell structure, and a lower tier of femto-cells that are arbitrarily deployed by end-users. The need for such architectures is driven by increasing demands for higher data rates as well as to provide capacity to serve increasing numbers of subscribers. This paradigm shift in cellular architecture may therefore imply changes in the way cellular networks are managed today. In this paper, we examine operation costs of a two-tier macro-femto-cellular network in a capacity-limited scenario. We identify the key parameters, including nomadic-to-mobile user ratio, non-linear femto-cell capacity growth, femto-cell subscription rate, and QoS provisioning costs, which will impact recurring annual management costs of these networks. We then identify a model which captures these cost components and key parameters, allowing an operator to characterize the management cost of their access networks. We also identify through evaluations key situations where adopting these femto-cells may in fact add to an operator´s overall costs, and provide key insights into the financial feasibility of femto-cells.