Disclosed are system and method for classifying location of a mobile device in a femtocell. In an aspect, the system and method are configured to receive, by a femtocell, location measurement information and performance measurement reports from a mobile device; classify location of the mobile device as indoors or outdoors based on the received location measurement information; and adjust a coverage area, transmit power, and/or radio frequency (RF) channel/band of the femtocell based on the location classification of the mobile device and performance measurements reports.