Femtocell deployment delays not surprising

Deploying any new technology that could potentially interfere with the cellular network has to be approached with enormous care and attention to detail. This has the inevitable effect of imposing lengthy delays as this new equipment is trialled and tested to absolutely ensure there is no degradation or interference to the macro network; which is, after all, fundamental to ongoing revenues.

Given the potential for femtocells to cause network disruption, it is perhaps not surprising mobile operators have contracted a series of lab tests, employee trials and consumer pilots to understand better the interference issues, consumer reaction and the business model. All this seems to have delayed the introduction of femtocells by the majority of operators with the exception of a notable few in the U.S. and Asia.

Interestingly, operators in the U.S., Asia and Europe seem to be positioning femtocells differently depending upon their region. In the U.S., Sprint and Verizon Wireless are using 2G femtocells primarily to improve their CDMA coverage, which will also be copied by AT&T Mobility (when it launches its service using W-CDMA), but with the added benefit of providing better high-speed data services for its fast-growing iPhone subscriber base.

Starhub in Singapore and Softbank Mobile in Japan--with Starhub having launched and Softbank only weeks away--have positioned their femtocell-based service to add value to their consumer proposition in the highly competitive markets in which they both operate.

European operators, which have conducted numerous trials and only launched so-called ‘commercial pilots' to date, appear to be aiming to use femtocells to boost network capacity while improving indoor high-speed data rates.

One possible reason for the delay in European deployments is the idea of using femtocells within the enterprise space. While this has always been envisioned, operators are reporting high levels of interest in femtocells sooner than expected from medium to large businesses. Orange France, which is still promoting its WiFi/UMA solution for improving residential coverage, has focused on testing femtocells for enterprise users in France and the UK,  and has no plans for consumer services in either country.

The second largest operator in France, SFR, has also conducted femtocell trials aimed at the business sector and was expected to have 'soft launched' a service late last year using equipment supplied by Ubiquisys. However, no more has been made public as to when this is likely to commence.

Meanwhile, little has been heard from O2. The operator conducted lab tests and consumer trials nearly a year ago, with the promise it would launch a service during the first quarter of 2009. The company made a brief statement in October stating it planned to conduct another femtocell pilot early this year. And its  supplier, Ubiquisys, said this phased approach is not unexpected and is typical of the way operators evaluate new technologies and products.

T-Mobile International, meanwhile, has also conducted numerous trials and has not revised its scheduled launch of a consumer-focused femtocell service during the second half of 2009. However, the company's CTO recently expressed doubts about the viability of a femtocell business model, claiming it was still emerging. The latest news would indicate that Cologne and Bonn are the two German cities T-Mobile has selected to test the commercial feasibility of 3G femtocells.

Click here for a chart on the status of European femtocell deployment