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Optical/IP

The Femto Sell?

3:35 PM -- Plenty of large carriers and wireless vendors are now starting to buy into the home base station concept. What is less clear, however, is whether their cellular customers will be so keen to buy the wonder boxes.

On the face of it, these appliances sound like a panacea for cellular coverage issues in the home. The main application of a home base station – or femtocell – is to function as a low-cost, low-power radio system that can be used to boost bandwidth and coverage in a subscriber's dwelling. I do wonder, however, how much carriers will have to subsidise these boxes. After all, do users really want to pay more to fix what they are likely to see as a problem for the operator rather than a limitation of wireless technology itself?

Think about how outraged people got when they realized that WiFi metropolitan networks couldn't sustain an Internet connection into the home, and muni is a new and largely unknown technology. Now imagine the reactions to being told to pay $50 or more for a box to improve cellphone coverage in the home. (See EarthLink's Cheap WiFi Vision.)

No, I think that it will be far better for operators to offer cheaper call-rates and push the bandwidth aspect. Of course, there will be a cost-versus-volume issue. It will only be worth it to drop call rates if people use their cellphones much more in the home.

It seems inevitable,however, that the advent of femtocells and WiFi-based fixed/mobile convergence (FMC) units will lead to lower call rates in the home and over local connections. T-Mobile US Inc. has already started the trend with its [email protected] pricing.

So the opportunity is there for the cellular carriers to deliver a serious blow to the dwindling wireline phone market and possibly take on the low-cost Internet VOIP market as well – although, of course, most of the major carriers in the U.S. also have wireline margins to consider as well.

Nonetheless, the femtocell could prove to be another way into the home for the cellular operators. I would expect them to incorporate WiFi into the cellular boxes pretty quickly as well. Vendors are already looking at femtocells as part of a home gateway strategy, so why not build and manage via a single box? (See Femto Players Gun for Gateways.) — Dan Jones, Site Editor, Unstrung

betapsi 12/5/2012 | 3:05:18 PM
re: The Femto Sell? Dan,

My point is simple. Take advantage of wifi where you find it. Smart devises is one answer to easily justify an inexpensive home wifi set.

Once frustrated with the quality of a cheap wifi devise to have an open or secure local wireless network, then one can see the value of a more expensive one as a home improvement.

Customer acceptance will come along with time and technology will change to meet the needs of those who wait.

Thanks for your time and thoughts.
lrmobile_atiller 12/5/2012 | 3:05:15 PM
re: The Femto Sell? Re: "It will only be worth it to drop call rates if people use their cellphones much more in the home"

Homezone tariffs have been used successfully in Germany to encourage fixed-mobile substitution, but there are a couple of big problems.

Firstly, the homezone tariff discounts the call without making it any cheaper for the carrier to deliver, so the discount comes straight off the carrier's profit. Femtocells solve this by using the subscriber's internet connection for backhaul, making femtozone calls cheaper for the carrier.

Secondly, homezone tariffs based on the macro cell ID leak a long way outside the home. The femtozone has a much more restricted area.
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