Femtocells Finding Acceptance, but Obstacles Remain

Carl Weinschenk

With apologies to poor Norma Desmond, femtocell technology may be ready for its close up.


At the CTI Wireless show in Las Vegas, Verizon Wireless said it planned to deploy femtocells this year. This Associated Press report doesn't provide many details. But even a conditional seal of approval from the influential company is important.


Most technologies evolve in fits and starts, and femtocells are no exception. Last month's Unstrung Insider does a good job of establishing precisely where these devices -- which are tiny base stations that extend a network into a premise -- are today. The technology is not completely set. There still are issues such as interference between the device and the carrier's main network as well as billing and operational integration challenges.


Those questions notwithstanding, the category is on the precipice of sinking or swimming in the marketplace. During the next year, service providers will seek answers to a lot of intimidating issues. These are more threatening than the technical and management issues -- people would know by now if any of them are deal breakers. The report says that the sweet spot for femtocells hasn't yet been determined. Are they revenue-generators or money savers? That seems like a fundamental question to be asking at this stage of the game.


The piece says that these questions are why 2008 will be a year of tests and trials, with serious roll outs starting in 2009 and 2010. The year ahead will also provide some time for costs to come down. Indeed, Fierce Wireless says that pricing is a main obstacle. Sprint -- which offers limited commercial services -- is picking up $150 of the $200 for its devices. History says, however, that equipment costs go in one direction: down. If cost is the biggest issue, femtocells are on their way.


This summary, which highlights findings by Pyramid Research, seems to be even more upbeat about femtocells than the other reports. It says that the markets have "exploded" with trial announcements and other news. It specifically points to trials by Vodafone with at least eight vendors and Softbank with at least five as emblematic of the increased interest and the breathe of the developing ecosystems. Another bit of good news is the formation of the Femto Forum and a femtocell introduction by Nokia Siemens Networks product. The piece suggests that femtocells will be able to target 30 percent of the 3G subscriber base by 2010. A deal last month between Motorola and Airvana was not mentioned in the report.


The year ahead will be pivotal for femtocells. Perhaps the comparison to the iconic character in Sunset Boulevard is unfair, after all. Norma Desmond was a faded star grasping for one last moment in the limelight. Femtocells may just be approaching their prime.

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