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Femtocells are low-power cellular base stations that operate in licensed spectrum. They are typically deployed indoors to improve coverage and provide excellent user experience, including high data rates. Cellular operators benefit from reduced infrastructure and operational expenses for capacity upgrades and coverage improvements. Femtocells also bring unique challenges, such as unplanned deployment, user installation, restricted access, and interoperability with existing handsets and network infrastructure. Although femtocells may cause some interference to other users in the network, with the use of proper interference management techniques, this can be well controlled. We present interference management techniques for both downlink and uplink of femtocells operating based on 3GPP Release 7 standards (also known as HSPA+). Femtocell carrier selection and femtocell DL Tx power self-calibration are proposed as key interference management methods for downlink. For uplink interference management, adaptive attenuation at the femtocell and limiting the Tx power of the femtocell users are proposed. Different interference models and their analysis are presented. In addition, coverage performance and capacity results are presented to quantify the benefits of femtocells. We demonstrate that in addition to coverage enhancements, significant capacity improvements are achieved on both downlink and uplink when femtocells are deployed in 3G UMTS/HSPA+ networks.