Carriers flubbing femtocell

AT&T, Sprint see femtocell benefits but customers have yet to be convinced, Infonetics analyst says

Femtocells have gotten off to a sluggish start so far because carriers have yet to sell customers on their benefits, says an analyst at Infonetics Research.

Infonetics' latest research report on the femtocell market estimates that vendors sold approximately 17,000 femtocells in 2009, well below their expectations. Infonetics analyst Richard Webb says that carriers have tried marketing femtocells to their customers by focusing on their ability to improve call quality within homes. The problem with this, he says, is that most people have strong call quality in their homes already and don't see the need to spend more than $100 on equipment to improve it.

Cell towers that blend vs. those that offend

"Most of the services we've seen so far have been launched with an emphasis on voice coverage," he says. "But if I already have good coverage in my home, I'm not going to see the need for it."

Femtocells are essentially small cellular access points that route nearby wireless voice traffic through preexisting broadband connections. In this way, femtocells can provide VoIP for wireless handsets that can both improve call quality and save money by letting users make calls without using up their cell minutes. Femtocells also have benefits for carriers, as they let wireless companies offload traffic from their own networks and onto wired IP networks.

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Femtocells have gotten off to a sluggish start so far because carriers have yet to sell customers on their benefits, says an analyst at Infonetics Research.

Infonetics' latest research report on the femtocell market estimates that vendors sold approximately 17,000 femtocells in 2009, well below their expectations. Infonetics analyst Richard Webb says that carriers have tried marketing femtocells to their customers by focusing on their ability to improve call quality within homes. The problem with this, he says, is that most people have strong call quality in their homes already and don't see the need to spend more than $100 on equipment to improve it.

Cell towers that blend vs. those that offend

"Most of the services we've seen so far have been launched with an emphasis on voice coverage," he says. "But if I already have good coverage in my home, I'm not going to see the need for it."

Femtocells are essentially small cellular access points that route nearby wireless voice traffic through preexisting broadband connections. In this way, femtocells can provide VoIP for wireless handsets that can both improve call quality and save money by letting users make calls without using up their cell minutes. Femtocells also have benefits for carriers, as they let wireless companies offload traffic from their own networks and onto wired IP networks.

Webb says that while wireless carriers such as AT&T and Sprint certainly see the incentive to deploy femtocells more broadly to relieve strains on their own 3G networks, consumers aren't yet feeling they provide enough benefit to warrant significant investment. However, he does see the femtocell market significantly picking up over the next few years, as Infonetics projects femtocell sales to rise to 40,000 units this year and 2.5 million units in 2011.

The key for mobile operators moving forward, Webb says, is to sell their customers on ways that femtocells can not only improve their voice quality but can also give them faster and more consistent wireless data coverage in their homes. He says this will be particularly important with customers projected to consume significantly more data through their mobile phones over the next few years.

"For individuals that are heavy broadband users, the case for femtocells is already there," he says. "But mobile operators need to move them more out into the mass market."

AT&T and Sprint had made significant moves on femtocell deployment in recent months. AT&T announced last month that it was offering its first-ever nationwide femtocell product, known as the MicroCell, to support both indoor voice and 3G data traffic. Sprint, meanwhile, has filed documents with the Federal Communications Commission to get approval to sell its own 3G femtocells. Sprint's current Airave brand of femtocells don't provide 3G connectivity and only offer around 150Kbps download speeds.

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