A Picocell is wireless communication system typically covering a small area, such as in-building (offices, shopping malls, train stations, etc.), or more recently in-aircraft. A picocell is analogous to a WiFi access point.

In cellular wireless networks, such as GSM, the picocell base station is typically a low cost, small (typically A4 paper size, and about 2-3cm thick), reasonably simple unit that connects to a Base Station Controller (BSC). Multiple picocell 'heads' connect to each BSC: the BSC performs radio resource management and hand-over functions, and aggregates data to be passed to the Mobile Switching Centre (MSC) and/or the GPRS Support Node (GSN).

Connectivity between the picocell heads and the BSC typically consists of in-building wiring. Although originally deployed systems (1990s) utilised PDH links such as E1/T1 links, more recent systems utilise Ethernet cabling.

More recent work has developed the concept towards a head unit containing not only a picocell, but also many of the functions of the BSC and some of the MSC. This form of picocell is called an access point base station or femtocell. In this case, the unit contains all the capability required to connect directly to the Internet, without the need for the BSC/MSC infrastructure. This is potentially a more cost effective approach.

In cellular networks, picocells are typically used to extend coverage to indoor areas where outdoor signals do not reach well, or to add network capacity in areas with very dense phone usage, such as train stations.

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