A femto cell is a radio access network element that supports one or more of the GSM/WCDMA family of radio interfaces, operates in a limited geographic area in licensed spectrum, may operate over the public internet, and supports a limited number of simultaneous users in a home environment.

Its principal functions are for coverage extension and for offloading users from the cellular network.

Femto cell offers advantage to both subscribers & opertaors. It will reduce network infrastructure cost and reduce traffic on traditional radio network. And subscribers will get better indoor coverage.
 3GPP Release 8 describes the femto architecture. 3G femto access point is called Home NodeB(HNB). LTE femto access point is called HeNB.

3GPP Iu-Based HNB Architecture

A low power transmitting device is installed indoors (home or office), and connected to the Internet via cable, DSL, on-premise fiber optic link, or a similar IP backhaul technology.  This connection is used to integrate the femto cell with the wireless operator’s core network.

3GPP femto architecture consists off Home NodeB (HNB), Security gateway (SeGW), HNB management system(HMS) and HNB gateway (HNB-GW)
 

There is a single HNB-GW per HNB Access Network whereas the SeGW could be implemented on a separate device (i.e. not integrated in HNB-GW) and for capacity reasons may be able to support all the HNBs connected to a number of HNB-GWs, or conversely a number of SeGWs may be required to support all the HNBs connected to a single HNB-GW

3GPP E-UTRAN HeNB Logical Architecture

Figure bellow shows a 3GPP logical architecture for the HeNB that has a set of S1 interfaces to connect the HeNB to the EPC.

The E-UTRAN architecture may deploy a Home eNB Gateway (HeNB GW) to allow the S1 interface between the HeNB and the EPC to scale to support a large number of HeNBs. The HeNB GW serves as a concentrator for the C-Plane, specifically the S1-MME interface. The S1-U interface from the HeNB may be terminated at the HeNB GW, or a direct logical U-Plane connection between HeNB and S-GW may be used.

The HeNB GW appears to the MME as an eNB. The HeNB GW appears to the HeNB as an MME. The S1 interface between the HeNB and the EPC is the same whether the HeNB is connected to the EPC via a HeNB GW or not.