Here's an unhappy story -- do you want to hear about it?

That unexpected invitation was how Seizo Onoe, senior VP and managing director of R&D strategy at NTT DoCoMo Inc. (NYSE: DCM), introduced the topic of 3G femtocell services in Japan during an interview with Light Reading Mobile at the Mobile World Congress 2012 in Barcelona last week.

Onoe's story goes like this: Docomo started deploying indoor, residential 3G femtocells back in 2007. Then, in 2009, the operator introduced additional applications (such as location-based services) that ran on the femtos for a monthly fee of ¥300 (US$3.70). An example of such an offering would be an automated text message that is sent to parents when their children arrive home from school. The femtocell would detect when the youngster's mobile phone is in range and generate the text message. (See DoCoMo to Upgrade Its Femtos.)

But from September this year Docomo will no longer offer such femtocell services.

"Unfortunately that service was not successful," said Onoe. "We had to decide to stop the service in September. It's an unhappy story as a service."

That doesn't mean the Japanese operator has turned its back on femtocells completely. Docomo will continue to give femtos for free to certain customers who have 3G coverage or capacity issues.

But the extra femto services just aren't compelling for Docomo customers, at least.

"Femtocell as a service is difficult," said Onoe. "To provide additional value to the customer is very difficult."

Docomo's femto service, called MyArea, stood out among other mobile operators' offers for the tiny indoor base stations. The operator had put together a package of exclusive music and video content for MyArea subscribers and the location-aware app was called Imasuka, which means "are you in?" in Japanese. (See Who Does What: Femtocell Services.)

Why this matters
It may be more surprising to some that Docomo is still providing femtocell services at all but, nevertheless, the news that the operator has decided to halt the offering shows how difficult it is for operators to make additional revenue from new femtocell-specific services.

It also illustrates the challenge in making a business case for residential femtocells that goes beyond the device being little more than a customer retention tool for those subscribers with poor indoor coverage.

For more
Despite Docomo's experience, industry efforts are afoot to help bring applications to small cells, particularly as operators contemplate the business case for deploying the tiny base stations in public areas.

— Michelle Donegan, European Editor, Light Reading Mobile