- Cheap Voice: Inexpensive voice services are not an inherent feature of femtocells. Instead, femtocells allow operators to incent adoption by offering cheaper voice--unlimited calling from home, for example, for a minimal up-charge. With or without femtos, however, voice services have already become relatively inexpensive. Take the U.S. as an example. Putting aside the plethora of plans with free mobile-to-mobile, night and weekend minutes, there is a wide array of unlimited voice plans at, or under, $50 a month.
- Enterprise Confusion: Last year, the concept of femtocells in the enterprise began to heat up. This year, it's still hot--evidenced by news out of Airvana, Percello and picoChip... not to mention the emergence of SpiderCloud out of stealth mode. For vendors, the enterprise femtocell opportunity may look particularly attractive given the relative price insensitivity (compared to consumers) and the ability of an enterprise to spell out a femtocell's ROI. Yet, pushing femtocells into the enterprise will require two things that generally haven't happened. First, more operators will need to follow Orange's lead and develop plans for penetrating the enterprise with femtos... not just wait for the enterprise to come to them. Second, vendors and operators will need to agree on (discover?) the right architecture for enterprise femtocell launches, whittling down today's array that runs from standalone high-capacity devices (think picocell) to proprietary femtocell grids or meshes to WiFi-like enterprise gateway models.
- Marketing: In the last bullet, one phrase was more important than any other: "not just wait for the enterprise to come to them." Marketing is critical to the success of any new service or technology. In some cases marketing is viral. In others it's led by the operator or vendor. In the femtocell space, it is largely absent--particularly when compared against the $100 million budgets for marketing a new mobile device. If I weren't in the telecom industry, I wouldn't likely know about the femtocell offers available to me. Stories of U.K. colleagues complaining to Vodafone about less than stellar coverage but not being "sold" a femtocell suggest that limited marketing isn't an isolated problem.
- Paying Twice: If femtocell marketing has been stunted, there is a good reason. The value proposition is a difficult one to explain to end-users. Operators routinely advertise the speed and reach of their networks--knowing that speed and reach (and devices) sell services. Explaining, then, that a femtocell can help deliver on the promises the operator has already been making gives an impression that the user is paying extra for something they already thought they were getting.
Okay, at this point, it might be easy to see why the audience of femtocell suppliers and service providers came away from the presentation a little dejected.
The larger message, however, was that against this backdrop of end-user thinking, operators and vendors need to begin thinking about femtocells differently. I have no doubt that femtocells are in an operator's best interest as a strategy for keeping radio access network CapEx and OpEx in check from both a coverage and capacity perspective. I have no doubt that subscribers in tough-to-reach locations may find femtocells of immediate value today--I have friends that fall into this camp. Operator interests alone, however, will not sell femtocells to end-users and the number of users who are coverage-constrained and tech-savvy enough to seek out a femtocell isn't big enough to support a thriving industry.
Peter Jarich is an analyst with Current Analysis.