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Interview - Nigel Toon, president and CEO, picoChip.

1. What are the growth areas in wireless?

Wireless technology is reaching a turning point. The industry has done such a great job of improving spectral efficiency with HSPA and LTE that we are now reaching the theoretical limits. At the same time, the amount of data traffic that is being carried over mobile networks is expanding more rapidly than ever. This convergence will create a serious challenge for the mobile industry over the next five years.

Adding wireless spectrum is one option but is restricted by regulatory control and is very expensive. Another option, and the one that carriers are rapidly adopting, is to re-use their existing spectrum by adding more cells. The challenge is that the major costs of a cell site are the real-estate and backhaul costs. Enter the femtocell, a very low power indoor cell that is located in houses, offices, or public areas and connects to the core mobile network over existing consumer broadband connection. Femtocells are going to be big.

2. Can you comment on the state of the emerging Femtocell market?

We can expect the Plain Old Telephone Service (POTS) to disappear in the next five years or so as people switch to a mobile service delivered in their home and office by femtocells.

We are now at the tipping point and in the key transition year from engineering to deployment: 2007 was a year of invention; 2008 a year of standardisation; 2009 is a year of operator trials. From 2010 on we will start seeing a time of deployment. The world's first femtocell standard was officially published by 3GPP last month, making the femtocell a reality and easing the transition from operator trials into mass-market commercial deployments around the globe.

3.What is the significance of femtocells for LTE?

It is interesting to note that even femtocell advocates sometimes underestimate the closeness of the symbiosis between the two. They assume that the deployment of LTE femtocells will follow the model established with 3G, filling in for poor indoor coverage. But it is just as likely that femtocells will lead, not lag, the roll-out of LTE.

There are several reasons for this. From the operators' point of view, while LTE does provide higher data rates than 3G, it doesn't represent the same type of "quantum leap" that we saw between 2G and 3G, where we moved from purely voice services to integrated voice and multimedia. So for operators, the whole point of LTE is that it can be profitably used to target premium services at users who need and can afford them, and to relieve capacity problems in areas where existing networks are congested. This immediately suggests a small-cell type architecture.

The reality is that as we use data services on our mobiles, more and more of the mobile traffic is originating and terminating in buildings. On a technical level, 64QAM modulation at gigahertz frequencies does not travel well through walls. So indoor LTE coverage from traditional macro basestations will be even worse than what we see with 3G. But the system relies in great part for its performance gains on achieving that high modulation density.

Putting basestations inside buildings is one obvious way of achieving those gains. Doing that provides another technical benefit, because LTE is designed to exploit MIMO techniques, which are effective in strong multipath environments such as those found indoors.

4. Is there still talk of skill shortages in the UK or has the downturn made it more viable for semiconductor companies in the UK?

We are lucky to be based in the southwest of England, traditionally a hot-bed of ideas in signal processing and multiprocessor technology. We certainly don't find it difficult to recruit the right skills here, but I think it would be entirely wrong to connect that fact with the global downturn - it is more to do with the heritage of the area, and the strengths of the educational and academic community here.

5. What impact has the current downturn had on the industry?

The downturn has undoubtedly made people think twice before committing to major new silicon design projects. That sounds bad for us as a company but the silver lining is that in addition to our SoC solutions, we have a programmable platform that customers can use to develop products for pretty much any wireless standard.

This is how our customers are getting their LTE projects under way today. The other necessity during hard times is to make use of cross-platform technologies and developments wherever possible.

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