Broadband customer premises equipment (CPE) leader Thomson S.A. (NYSE: TMS; Euronext Paris: 18453) has revealed that it does not plan to use ip.access Ltd. 3G femtocell technology in its home gateways but it will continue to have a relationship with the femtocell provider. Thomson has instead integrated a UMTS femto module from Airvana Inc. into its home gateways. "We do not have a product on our roadmap with the ip.access module," says Stan Claes, director of the IPS femtocell group at Thomson.

The development is not great news for ip.access because Thomson is the dominant broadband residential gateway supplier and these integrated devices are seen as the most cost effective way for operators to deploy femtocells in the long run on a mass market scale. (See Who Makes What: Telco Home Gateways and PicoChip Unveils Low-Cost Femto Chip.)

According to Infonetics Research Inc. , Thomson is the world leader in broadband CPE equipment by revenue, which includes set-top boxes and gateways. Thomson is followed by Motorola Inc. (NYSE: MOT) in second, Arris Group Inc. (Nasdaq: ARRS) in third, and Cisco Systems Inc. (Nasdaq: CSCO) in fourth, according to Infonetics.

The general consensus among speakers and delegates at the Avren Events Femtocells Europe 2008 show is that operators will roll out standalone femtocells to get the market started, but integrated home gateways will eventually be deployed more widely. (See Femto Players Gun for Gateways, Netgear Gateway Goes Femto, Netgear, Ubiquisys Team, Netgear Feels Out Femto, and AlcaLu Goes Femto.)

Thomson explains that its choice of Airvana over ip.access had to do with its partnership with Nokia Networks . (See Thomson, NSN Team and NSN, Airvana Team.)

"Nine months ago, we signed a co-marketing and co-development agreement with Nokia Siemens," says Claes. "We were looking for a technology supplier that would offer support for that ecosystem. Given ip.access wasn’t willing to support that at that time, we went looking for a technology supplier that would support that ecosystem."

That supplier was Airvana. (See Airvana, Thomson Team.)

But Thomson’s decision to sideline ip.access does not leave the U.K.-based femto vendor without a residential gateway partner, according to Andy Tiller, vice president of marketing at ip.access.

"We're more actively engaged with another partner because we have a more active opportunity," says Tiller. "But we're not exclusive. Our relationship with Thomson is still alive and well."

Tiller would not name the partner, but it is understood to be Cisco Systems Inc. (Nasdaq: CSCO), one of ip.access’s strategic investors. Unstrung has reported that the joint development between Cisco and ip.access has bagged a win at AT&T Inc. (NYSE: T). (See Cisco, ip.access Prep Femto Combo, Cisco Invests in ip.access, and Cisco to Acquire Scientific-Atlanta.)

Gateways are hot -- literally
Airvana says it is seeing strong demand for its WCDMA femto module. "We think that’s where the business is going," says Paul Callahan, VP of business development at Airvana.

But the early integrated gateway products are not without problems. For one, they’re too hot.

Home gateway suppliers already have cooling systems and they don’t want to add anything else to heat up the box, he explains.

"The way you win with an [OEM] deal... is you come in with the lowest power consumption, which usually translates into the lowest heat," he says. "We have the lowest power consumption product on the market bar none."— Michelle Donegan, European Editor, Unstrung