Typically, the operators become spectrum deficient in dense urban areas where there may be more subscribers and hence traffic than can be handled with the available spectrum. The operators need to shrink the cell size in these areas to have more cells per sq km; and thus more capacity per sq km for a given capacity per cell. In a network with nomadic users, this approach inevitably involves deploying more infrastructure (such as cell towers and Base Transceiver Stations) thus increasing the capital expenditure (capex) and operational expenditure (opex) of the operators. The above are particularly acute in countries such as India. For example, in India each operator is allotted, on the average, about 2×7 MHz of 2G spectrum, while the international average is about 2×15 MHz. In the soon to be held 3G auction, spectrum planned for allocation is 2×5 MHz for each operator while the international average is 2×15 MHz. Due to this the spectrum starved operators are forced to use an inter-site distance of less than 150 meters in dense urban areas such as Connaught Place in New Delhi and Nariman Point in Mumbai.

A less expensive alternative to increase the capacity of the Radio Access Network is the recent concept of Femtocell - also called as home base stations.

Femtocell Architecture

Femtocells are low power access points providing wireless access to subscribers, primarily at home. The user-installed device communicates with the voice or data network over a broadband connection such as DSL or a cable modem. Femtocell uses standard mobile cellular network protocols such as GSM, CDMA, WCDMA, LTE, or Mobile WiMax to communicate with the mobile handset. Though Wi-Fi at home resembles Femtocell, it requires dual-mode handsets and is mainly meant for data services. Femtocell can deliver both in-house and mobile voice and data services with existing handsets.

The architecture of a typical 3G Femtocell approved by Third Generation Partnership Project (3GPP) is given below: