June 30, 2010
SoftBank Corp. has started offering femtocells for free in Japan as it ramps up its national service this year, a move that could spur other operators to adopt the same model for the small home base stations.
The move comes as operators, such as AT&T Inc. (NYSE: T), have come under fire from some industry pundits for their femto prices and service offerings. (See AT&T Defends Data Caps on Femtos , AT&T Enforces Data Cap on Femtos , Vodafone Femto Ads Banned , Femto Watch: Vodafone Means Business in Spain, and Femto Watch: Vodafone Expands Footprint .)
Not only are Softbank's femtocells offered for free, but so is the ADSL connection, when customers sign up to a two-year contract.
Another twist in Softbank's strategy is that the access points are configured for open access, which means that any Softbank subscriber within range of a femtocell can use it. Most femto services today are offered on a closed access basis, which allows only registered users to use the access point.
Softbank's radical femto moves could encourage other operators to adopt this kind of service model, according to Will Franks, CTO of Ubiquisys Ltd. , which supplies the femto access points to Softbank through its system integrator partner, NEC Corp. (Tokyo: 6701). (See NEC, Ubiquisys Win Softbank Femto Deal.)
"[Softbank] can give femtos away for free and others can, too," he says. "If others can, then they will."
Franks says that operators' ability to embrace the free femtocell model will depend on their cost structure. For Softbank, he explains, two of the factors that enable the free femto model are the low cost of the femto access points (which use Percello Ltd. chipsets) and the operator's IP Multimedia Subsystem (IMS)-based femtocell network architecture. (See Ubiquisys Busts $100 Femto Barrier and Ubiquisys Femtos Go Soft.)
"Softbank has a very scalable model; they chose an IMS architecture, which is very cost-efficient," Franks says. "As others start to move to the next stages, they'll be able to bring their costs down."
Softbank started taking orders for the free femtocells in May and expects to ship 200,000 access points to users this year.
Other operators offering femto services in Japan include NTT DoCoMo Inc. (NYSE: DCM) and KDDI Corp. (See DoCoMo to Upgrade Its Femtos and KDDI Tests Airvana's 3G Femtos.)
— Michelle Donegan, European Editor, Light Reading Mobile
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