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Is there a business case for femtocells?
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CHICAGO--At the 4G World conference this week there seems to be a growing divide between those who believe femtocells and picocells are necessary in 4G coverage and those that don't--or at least aren't so bullish on the concept.
The disparity was clear in the keynote addresses. On Tuesday Kris Rinne, AT&T's senior vice president of architecture and planning, said that the carrier is still evaluating femtocells, but provided no update on a commercial deployment. Meanwhile, on Wednesday, Clearwire CEO Bill Morrow urged infrastructure makers to look beyond the macro network and work on picocells and femtocells because those are going to be very necessary going forward.
Of course, many of the vendors I have talked to agree with Morrow. And that's because they have a business built around selling a lot of picocells and femtocells to carriers. Newcomer Intelibs, which officially launched at 4G World, currently has picocells that support up to 20 simultaneous users and femtocells that support five simultaneous customers. The company says it is current bidding on several RFPs for LTE inbuilding solutions.
Continuous Computing (also a big femtocell provider) says that femtocells are necessary for capacity and coverage but acknowledged that there are issues with the business model. Manish Singh, vice president of product line management at Continuous Computing, said that he thinks carriers have spent so much time touting their network coverage superiority to consumers that they will have a hard time getting customers to pay $100 or more for a device that is supposed to make their coverage better.
I agree with Singh. It's clear from the feedback that FierceWireless receives from our readers that there is a disconnect when it comes to the advantages femtocells offer customers. Many customers write that they don't understand why they should pay for a device to improve coverage--something they think the carrier should already be providing.
Perhaps the cable companies will strike the right note when it comes to femtocells. I've heard that some are considering delivering content via the femtocell or combining inbuilding coverage with their cable boxes. If they can sell it as a content delivery tool rather than a coverage enhancement, I think customers might be more amenable to the idea. --Sue
Comments
Posted by Anonymous | September 17, 2009 - 8:45am
I agree that the coverage aspect will be a hard sell for most customers. However, if explained properly, I think that customers will understand the capacity advantage.
Posted by Anonymous | September 17, 2009 - 12:30pm
do not agree with previous anonymous. operator is supposed to have enough capacity in his network too. if you mean speed then user will go with wlan which he already has. this brings me to my main point - what is femto solving? voice coverage or data speeds/coverage/capacity. the latter is already addressed by wlan in most homes.
Posted by Anonymous | September 17, 2009 - 12:53pm
Depends on the frequency. 2.5GHz networks will have a stronger need for pico/femtocells, while 700MHz will have less of a need for pico/femtocells because of the RF propation of the lower frequency.
Posted by Anonymous | September 17, 2009 - 10:11pm
I am about to bolt (5 mobile phone connections) from AT&T for lack of basic voice coverage let alone lack of 3G. I have been begging AT&T for Femto support and they are not responding.
Posted by Anonymous | September 18, 2009 - 8:21am
You should register yourself at www.femtonow.com maybe they can get the femtocell to you...
Posted by Xian | September 18, 2009 - 3:21pm
Wife and I opted for a femtocell from Verizon after switching carriers several times trying to find one that could get an acceptable signal to our house in Los Angeles' San Fernando Valley. Hated to spend $200 to solve Verizon's problem, but I understand that homeowners in the neighborhood won't allow a tower anywhere nearby, so there isn't much else they could do (besides discount the device a lot more than they do).
Posted by Unwired Insight | September 18, 2009 - 4:11pm
According to Unwired Insight's new report, some 3G networks will run out of capacity next year. So, femtocells will be needed to take traffic away from 3G networks before it's too late.
More info http://www.unwiredinsight.com/press.aspx
Posted by Anonymous | September 19, 2009 - 2:52am
Even if that's true Unwired, this is a problem that the carriers need to provide for. It's not the consumers job to buy bandwidth to supplement the cell companies coverage, and then the additional hardware as well? That's like the electric company telling you they'll sell you electricity, you just have to run the cabling from the station, and oh yeah, did I mention that you need to build a station and fuel it and run it. What would I be getting from them at that point? I bought the phone, the mini tower the bandwidth and the transmission lines. They likely couldn't even provide customer service since there are so many permutations of hardware just to transmit the call. I need a business model where people give me money for a "service" like that!
Posted by Anonymous | September 19, 2009 - 2:58am
I also forgot, that brings up all sorts of sticky issues such as if you're on one of these points on your private phone over your companies network do they have the right to record your "network traffic" like any other terminal connected to their networks? Worse yet, you're at a client site and your phone switches automagically to one of these points where you are unknowingly divulging corporate secrets... Seems like it's just too much work coming out of that....
Posted by Anonymous | September 19, 2009 - 2:12pm
Your analogy is not accurate. You only pay for the electricity that you use at your house. With wireless service, you pay for the service everywhere you are able to use it.
Posted by Anonymous | September 22, 2009 - 8:38am
I'm another AT$T customer that will abandon them because of poor coverage at my home. If economical, I'd buy a femtocell.
Posted by beauxflocons | September 22, 2009 - 9:11am
Is it me or are these Femtocells/picocells microwave toaster ovens without the toaster oven?? I am not sure, even for free, I would want one of these in my home. How safe are these super routers?
Posted by Anonymous | September 22, 2009 - 1:51pm
I am not too concerned about radio waves in your house - if that is what you are worried about. There is enough already in and around the house (WiFi, TV waves etc.) and the power of these cells is very small compared to being served by a cell tower.
Posted by Anonymous | December 24, 2009 - 9:28pm
Well perhaps this is a little late, but just in case you are reading this Sue, I'd like to comment. Aside from the obvious, femtocells provide the carrier and the user with benefits not discussed here. How about no-cost air time? Or a reduced rate when you are connected to your own femtocell? That offloads traffic from the system which benefits the carrier, and it provides an incentive to the user to connect and pay for a femtocell box. For many of us users, just getting reliable coverage while at home would be a huge benefit!
Posted by RyanG | January 8, 2010 - 4:37pm
If you're concerned, then let me ask you: how safe is your wireless access point? I'd wager that these femtocells will actually reduce your RF exposure since it's not the transmission from the tower to your phone that is high power (once it gets to you), but rather from your phone to your tower. By only needing to transmit to a cell located within your house, your phone can transmit at a vastly lower power level than if it had to transmit to a distant tower. If you're concerned about RF exposure, you should probably be all femtocells.
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The better question is if they make economic sense compared to VoIP over WiFi. I'd rather buy a $100 VoIP phone for use in my house and use Google Voice to call all my numbers simultaneously. Then I even dodge carrier subscription fees!
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