2008 Year in Review: Femtocells bring unfulfilled expectations

From January of this year operators, most notably T-Mobile, began announcing trials of femtocells. By mid-year, progress would appear to have been meagre as news seeped out about unresolved technical issues and, more critically, an unclear business case.

SFR in France was the most public saying it had put its femtocell testing on hold to "give equipment suppliers time to consolidate their roadmaps." This was interpreted as the need for clarity on 3GPP status and the lack of resources being provided by the larger femtocell developers to achieve this.

A few months later, O2 declared it was looking to run another femtocell pilot early in 2009 having already conducted consumer and equipment trials in the first half of 2008. Looking to explain the situation, femtocell developer Ubiquisys said this phased approach should not be unexpected and would be typical of how operators evaluate new technology and products. "With lab trials, internal tests and commercial pilots, you would expect separate discreet stages," said the company's VP of marketing, Keith Day.

Significance: Whilst the majority of the larger mobile operators have conducted trials of femtocells, question marks remain over the business model and how consumers might react and understand the benefits. With late 2009 now being put forward as the more likely date for commercial deployments, a growing number of analysts now believe this is optimistic and believe that 2010 is a more realistic timescale.

Also, little attention would appear to have been given to how handsets will work with femtocells. Questions such as handsets being optimised to support this new "in home" activity, and their ability to be aware of the femtocell--ideally both in the radio and the application platform, have not been addressed publicly.

Related articles:
Operators delay femtocell deployments
Ericsson wins femtocell supply contract
Femtocells: O2 delays commercial launch, prepares for more trials
Femtocell success reliant on handset innovations, claims new study

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