Business Case Evaluations for LTE Network Offloading with Cognitive Femtocells

Mobile networks are increasingly becoming capacity limited such that more base stations and smaller cells or more spectrum are required to serve the subscribers’ increasing data usage. Among several challenges, the establishment of new base station sites becomes challenging and expensive. This study proposes and analyzes critical aspects of a business case where a mobile operator offloads its mobile LTE network by deploying cognitive femtocells. When aided by a sensor network the cognitive femtocell will be able to use frequencies other than the mobile network and hence increase its power to cover outdoor areas and neighbour buildings. This cognitive femtocell strategy will be compared with an alternative strategy where an operator deploys conventional femtocells and has to build additional base stations to meet the traffic demands. The business case analysis illustrates that there is a potential for cost savings when offloading the mobile network with cognitive femtocells when compared to the alternative strategy. It must be emphasized that the studied concept is innovative and that the business case period starts Email addresses: [email protected] (P̊al Grønsund), [email protected] (Ole Grøndalen), [email protected] (Markku Lähteenoja) NOTICE: this is the author’s version of a work that was accepted for publication in Telecommunications Policy. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in: P̊al Grønsund, Ole Grøndalen, Markku Lähteenoja, Business case evaluations for LTE network offloading with cognitive femtocells, Telecommunications Policy, October 2012, ISSN 0308-5961, 10.1016/j.telpol.2012.07.006. Preprint submitted to Telecommunications Policy November 10, 2012 in 2017, hence parameter assumptions are uncertain. Therefore, as the most important message of this work, sensitivity analysis are used to reveal the most critical aspects of the cognitive femtocell business case. It is found that that the most critical parameters regarding the cognitive femtocell are the price for backhauling, the number of users supported and the coverage. Furthermore, an optimal coverage radius for the cognitive femtocell for lowest possible costs is found. Costs related to the fixed sensor network are found to be less critical since sensors are embedded in the cognitive femtocells. Sensitivity analysis is also presented for spectral efficiency, cognitive and conventional femtocell offloading gain, sensor density and price, customer density and price for base station site establishment.