Femtocells and the consumer proposition

Mobile operators have moved from laboratory tests and technical trials to large-scale commercial pilots of femtocells. The most public of these has been Softbank Mobile in Japan that is using around 10,000 femtocells to test the technical and commercial feasibility of the technology. Other multinational operators are also said to be conducting similar trials with the objective of launching commercial pilots during Q1/2009.

If these trials and pilots are deemed to be successful, femtocell vendors are assuming shipment volumes during 2009/2010 will quickly rise into the millions.

However, according to Andy Tiller, the VP of marketing for ip.access, a femtocell technology developer, this opportunity is reliant upon mobile operators developing and marketing a proposition that will have obvious appeal to the consumer.

"In some countries we're seeing mobile operators struggle to understand what femtocell proposition will work in their market. They understand the business case, but the key issue of how to persuade a customer to acquire and install a femtocell remains unsolved in many regions."

This could well be the case in Germany where cellphone subscribers are accustomed to using advantageous 'home-zone' tariffs that use the normal cellular network to determine when the subscriber is making calls from their home. Attempting to undermine this attractive proposition with a femtocell-based solution could be difficult. The reverse is possibly true in North America where 3G coverage is much less comprehensive, and providing the subscriber with their own femtocell, or personal 'home cell,' could prove to be particularly attractive.

"The key challenge is the consumer proposition," says Tiller, "and the future success depends on mobile operators and their ability to package their femtocell propositions appropriately for the various market segments."

But standalone femtocells are likely to be short-lived. ip.access claims it is already seeing demand for femtocell modules to be integrated into other devices, such as WiFi home hubs and set-top boxes, etc.: "We're already working with large CPE manufacturers so they can understand how to build femtocell capabilities into numerous consumer devices." -Paul

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