Why femtocells won’t fade out

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Jasper Jackson reports on the latest push by the femtocells community to prove the technology’s worth. These little boxes can provide better mobile coverage and precise location data – so why are so few buying?

Femtocells have been ‘the next big thing’ for the last two years – but so far failed to live up to expectations.

The small cell units deliver mobile signals from a box in a home, business or public space. They were supposed to fill in the gaps in network coverage that led to poor signal and low data speeds, and revolutionise how networks functioned. With so much promised for femtocells, why have they still not taken off?

The annual Femto Forum Femtocell Summit in London hailed a new report commissioned from Informa Telecoms as evidence that (once again) femtocells were about to have their day.

According to Informa, the number of 3G femtocells deployed worldwide reached 2.3 million early this year. This is more than the 1.6 million conventional 3G base. Informa predicts there will be 48 million femtocells deployed by 2014.

Thirty-one operators were offering femtocells in the first quarter of this year, up 60 per cent over just one quarter.

Yet the significance of the figures is easily overstated. Femtocells are a fraction of the cost of conventional base stations. While many operators are rollingout the technology, that does not mean customers are rushing to buy it.

Operator dilemma

There are two main reasons why the introduction of a femtocell network is appealing for operators. One is mounting demand for mobile data, which femtocells offload onto the fixed-line broadband network. The other is the difficulty of providing coverage indoors.

Poor in-building coverage has so far provided the main spur to femtocell deployment. Good coverage is seen as important for reducing churn. Getting one customer to sign up to a femtocell can also persuade others in a household to switch networks.

Some operators have decided to tackle the problem of incomplete coverage by promoting femtocells. AT&T gives the devices away free to some customers and now has the largest network of femtocells in the world. All the major operators in the US o er femtocells, because the US suffers significantly from coverage black-spots.

In Japan, SoftBank has been giving away femtocells for free to customers who enter a two-year contract, as part of attempts to differentiate itself by providing superior coverage. SoftBank ensures all its femtocells are open, so anyone on the network, not just the femtocell customer, can use the additional mobile signal.

Not yet mainstream

In the UK, Vodafone promotes its Sure Signal femtocell as a guarantee of a good signal at home. Vodafone Sure Signal product manager Jo Gilfoy claims the device has been a huge success, and says some customers have described it as “lifechanging”, though the operator is not providing them for free.

However, neither giving away nor selling femtocells has resulted in them going mainstream. In the UK, Vodafone is the only operator to offer a consumer femtocell at all.

This is because all operators trying to sell femtocells as a coverage solution face a major dilemma. How do they market a product designed to fix a problem they would rather not admit exists?

Dr Andy Tiller, SVP of product management at ip.access, provides the technology behind AT&T’s MicroCell. He says that operators are merely being pragmatic.

“If you were to do a big national marketing campaign, you would effectively be saying that you need this device because your coverage isn’t good enough.”

The target audience for Sure Signal is not merely a niche market. Vodafone says up to 12 per cent of mobile subscribers have problems with mobile signal at home. But it’s not quite a mass market either.

Tiller says that femtocell technology is being improved to o er better mobile phone service for all users, not just those with poor coverage. This, he says, will enable operators to begin marketing femtocells more aggressively as a consumer’s “own personal lane on the highway”.

“If operators were sure that they could market it as a way to guarantee much better service it could market the thing in a very different way.

That is when we will see the breakthrough and operators will pitch it as a customer’s own personal cell, rather than the solution to the problem the network should solve anyway.”

Full article in Mobile News issue 495 (August 15, 2011).

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