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« Southwest Airlines Will Install Internet Service on All Planes | Main | Snow Leopard's Wi-Fi Improvements »

August 25, 2009

Femtocells Get Feedback

The WSJ writes of the low rate of adoption, interest in femtocells: I've long been a bear about femtocells, short-range indoor base stations designed to extend cellular networks to the home or small office, allowing the use of unmodified mobile handsets. Femtocells seem to be a way for carriers to bring their business into your home, instead of you gaining more control over your calling.

T-Mobile steered a different course years ago, signing on to the unlicensed mobile access (UMA) standard, which allows a handset to negotiate seamless during-a-call handoffs between a mobile network and a Wi-Fi network. T-Mobile had to introduce new handsets that include UMA software and Wi-Fi radios; the firm now has 10 such models which are priced like models without UMA.

Femtocells require no handset updates. A customer obtains the base station, plugs it into their broadband connection (just like UMA, the carrier doesn't pay for the call backhaul), and then unwinds up to 30 feet of GPS antenna. Femtocells have to have a precise location both to use the correct licensed frequencies for that area and to assist in meeting E911 call location requirements. (In fact, femtocells may help carriers meet those obligations well enough to offset worse performance elsewhere.)

But where T-Mobile paired UMA with a cheap, unmetered calling plan--now costing just $10 per month for 1 or more lines--Sprint's femtocell costs $100 and $5 per month plus a $10 per month fee for a single unmetered line. Verizon charges $250 with no monthly fee nor calling discounts. (AT&T's femtocell is still in testing in limited markets, and may have an unmetered plan associated.)

Further, T-Mobile counts all calls that originate on a Wi-Fi network under its unmetered plan, and allows you to use any qualified hotspot: any one for which you have access or a password, or that's part of its large aggregated HotSpot roaming footprint. If you receive a call or place a call over Wi-Fi, you can walk away onto the cell network and not have minutes apply. For Sprint, minutes are unmetered only when at the femtocell, and, as noted, Verizon doesn't engage in that at all.

Because T-Mobile relies on Wi-Fi for data, the speed that your handset can access the Internet is only limited by your broadband connection and the quality of the Wi-Fi network. Verizon and Sprint are shipping 2G-only femtocells, which means that handsets with 3G but no Wi-Fi would be severely cramped. AT&T will offer 3G service with its femtocell--but 3G drains a battery far faster than Wi-Fi does on a mobile device. You'll need to keep your iPhone or other phone plugged in to use it effectively in your home as a landline replacement. (AT&T's devices should be able to switch to Wi-Fi for data while making 3G calls, however.)

The cost of femtocells, where we're now a good year into real worldwide availability, is still far too high relative both to their utility and substantial deployment. Yes, that can drop via volume, but Om Malik points out that with only 20m femtocells predicted to be sold worldwide in 2012 (and 800K worldwide this year), the amount of investment in femtocell makers is far outstripped by the potential for revenue. That's a recipe for consolidation and closure.

Femtocells benefit a carrier by allowing customers to get coverage where they cannot, and offloading cell tower usage to a device that the customer has paid for or leases. Some reports have suggested that carriers should give away femtocells because the reduction in infrastructure buildout through heavy in-home use would be far cheaper than the cost of the femtocells.

Honestly, given the costs, limitations, and complexity, I'd rather simply use Skype on my iPhone over my home Wi-Fi network rather than a femtocell.


We recently added the Verizon femtocell to our home to combat the useless 1-bar, no-bar, 1-bar, no-bar shuffle. As you reference in the article, $200 is a bit much to swallow, but after having already switched from AT&T to try to get a better signal, it seemed a better option that trying yet another carrier. We're relatively happy with the result -- now get 4-bars once the phone registers with the cell, but we still need to optimize placement in the house to maximize footprint to correspond to our living pattern. VZW should probably subsidize these devices; likely saves them considerable money not just on buildout, but on support calls.

I'd challenge you on some of these assertions. Firstly, you claim that 3G drains the batteries much more than WiFi. You may not be making a straight comparison - WiFi is typically very short range whilst your 3G signal may be travelling over a much longer distance. Since RF power required is related to the square of the distance travelled (plus extra to overcome walls, buildings etc.), using 3G at high data rates outdoors does indeed require more power. I've found that using 3G femtocell uses much lower battery power compared to outdoor use. Some argue that it may be less than WiFi because cellular systems have many more features designed to save battery power compared to WiFi.

Using Skype on your iPhone over WiFi may well be a simple thing for you to setup and manage. Once installed, femtocells use existing standard phones with the same phone numbers and calling/user experience. It doesn't matter if you are at home or outside (or move outside), the way you make/receive calls, your phone number, voicemail etc. doesn't change. This is in practice much easier for most end users to understand and continue to use.

And compared to the still limited range of UMA handsets, femtocells are compatible with all 2G or 3G phones which allows customers to continue to express their personality with their phone choice.

David Chambers

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