Will femtocells ever get their moment?

Airvana exec argues mobile architecture challenges make them inevitable

Although femtocells have yet to live up to the hype in terms of sales, femtocell vendor Airvana is still confident that they have a future in the mobile marketplace.

During last week's FutureNet conference, Woojune Kim, Airvana vice president of technology, outlined why his company is still bullish on femtocell prospects. The company believes carriers will come to see them as essential to offloading traffic on their mobile data networks as demand continues to grow.

Carriers flubbing femtocells

For the uninitiated, femtocells are essentially small cellular access points that route nearby wireless voice and data 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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Although femtocells have yet to live up to the hype in terms of sales, femtocell vendor Airvana is still confident that they have a future in the mobile marketplace.

During last week's FutureNet conference, Woojune Kim, Airvana vice president of technology, outlined why his company is still bullish on femtocell prospects. The company believes carriers will come to see them as essential to offloading traffic on their mobile data networks as demand continues to grow.

Carriers flubbing femtocells

For the uninitiated, femtocells are essentially small cellular access points that route nearby wireless voice and data 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.

So far, however, carriers haven't been all that successful in selling femtocells to their customers. A recent report from research firm Infonetics Research found that vendors sold approximately 17,000 femtocells in 2009, well below their expectations. Infonetics analyst Richard Webb said at the time that carriers have tried marketing femtocells to their customers by focusing on their ability to improve call quality within homes. The problem with this, Webb claimed, 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.

However, Infonetics does see the femtocell market significantly picking up over the next few years, as the firm projects femtocell sales to rise to 40,000 units this year and 2.5 million units in 2011.

For his part, Kim thinks that it's only a matter of time before carriers come up with the right pricing and sales pitch to entice more users to purchase femtocells. Noting that studies from carriers such as Japan's NTT DoCoMo have shown that 70% of mobile traffic comes from users located in buildings, he says that femtocells will become imperative for carriers looking to have fast and reliable outdoor networks. After all, if carriers can offload the majority of their indoor mobile traffic through femtocells, it will leave them considerably more bandwidth to serve customers consuming voice and data services outdoors.

"Operators are still investigating the best pricing strategies and plans for femtocells," he says. "Vodafone UK is one of the most aggressive and has had great success according to industry sources recently. AT&T is also investigating various pricing models ranging from free to monthly charges."

Eventually, Kim says that carriers may have to consider more heavily subsidizing femtocells to their users, especially as they start to face limits in the efficiency increases that additional spectrum can provide them. However, he thinks it will be up to the carriers to come up with the best pricing models in order to make the sale.