Femtocells Are Coming
A home base station – or femtocell – is a low-cost, low-power radio system that can be used to boost bandwidth and coverage and enable new applications such as fixed/mobile convergence (FMC) in a subscriber's dwelling. Vendors have been pushing the idea for a while, but it appears that mobile operators are now starting to take them seriously.
For instance, Sprint Corp. (NYSE: S) is examining many options to ensure that indoor coverage on its new WiMax network is up to scratch. Unstrung Insider analyst Gabriel Brown expects that at least one major carrier will announce a femtocell rollout this year. (See Sprint Goes Femto With WiMax.) ABI Research is predicting that there will be 102 million users on 32 million femtocells worldwide by 2011. I'd say that it's hard to call those kinds of numbers at the moment, as the market is barely born yet. I do agree with ABI, however, that the bulk of femtocells will support two or more radio types.
Multimode is definitely the way to go with femtocells, since people frequently use more than one type of wireless device in the home. Sprint is already said to be looking at products using WiMax and a couple of flavors of CDMA.
What will get really interesting is when carriers start to look at putting WiFi into these boxes. It will open up an opportunity for the major service providers to get into the SOHO market and offer users an all-in-one box to replace their old WiFi access points with a more managed and layered service.
In fact, femtocells represent the first real threat to the dominance of WiFi in the home. Initially, carriers will be able to offer services like Internet connectivity and voice-over-WiFi calls in the home that can move to the cellular network when the user goes out of range. BT Group plc (NYSE: BT; London: BTA) and T-Mobile US Inc. have already started on this path with dedicated FMC services. I suspect that T-Mobile USA will continue to be a pioneer in this space and be among the first North American operators to deploy femtocells. This will allow it to extend both its cellular and WiFi hotspot services further into people's homes.
Even though users thanks to WiFi access points, are much more used to the idea of wireless connectivity in the home, there is no sure-fire guarantee that subscribers will buy into the femtocell idea. I suspect that pricing, security, management, and – yes – health questions will all come to the fore when these appliances are more common on the market. (See HBS: Issues of Management and Wireless Illin'.)
And oh yeah – the marketing folks are going to have to come up with a snappier name than the somewhat hygienic-sounding "femtocell," which seems to be the favored industry term right now. I think most people would expect to hide a femtocell at the back of their bathroom cabinet rather than sticking it in their kitchen window.
— Dan Jones, Site Editor, Unstrung