The hard (femto) sell

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Vodafone’s move to launch a femtocell ‘Gateway’ device at the start of this month marks the first launch of the technology in the European market.

A perceived reluctance by customers to pay extra for coverage that the network should already be providing means there are barriers to take up, and analysts have branded it a “niche offering” and an irrelevant technology.

But Vodafone and device manufacturers maintain the technology will revolutionise mobile, paving the way for new applications and services, and playing a part in network rollout.

Vodafone’s offering is based purely on coverage – there is no other incentive for customers, such as extra minutes, texts or data, besides this.

The Gateway costs £160 up front, or £5 extra on top of standard 24-month contracts for devices such as the Sony Ericsson C510 and W595, Nokia 5800, HTC Magic, Samsung Tocco Ultra and Nokia N97, via the Vodafone website.

This way, the Gateway costs £120 over the life of the contract. It’s free on contracts of £60 and up; and according to some analysts, an incentive for customers to move up a tariff level, or even churn from another network, thereby earning the network more revenue.

A Vodafone spokesman agrees it is basing the proposition purely on coverage, and says it is too early to say what benefits femtocells will bring to the network, although trials are being done by Vodafone Spain with enterprise customers.

“There is an element of customer education that needs to take place but hopefully the benefits speak for themselves,” says the spokesman. “We will further develop the service following the feedback we get from the launch.”

Most rival networks are expected to release their own femtocell products later this year, with O2 said to be conducting trials. 3 has conducted trials in its Australian division but a spokesperson says it has no current plans to deploy femtocells in the UK – this could perhaps be linked to the merger of 3 Australia and Vodafone Australia in February.

T-Mobile has said it is “not in a position to comment on our marketing plans for femtos”, which would indicate that there is a plan of some sort.

Orange says it already offers “in-building” coverage solutions, such as its Unique service which uses UMA technology so a handset can move from making calls over the mobile network to Wi-Fi, theoretically saving money. Compatible handsets listed on Orange’s website include the HTC Touch and BlackBerry Pearl and Curve.

Full article in Mobile News issue 443 (July 13, 2009).

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