Over 300 people attended the Femtocells World Summit in London this week, and as one observer tweeted, “Holy Cow! Is there ever a lot of buzz / ink around Femtocells right now!” Here are some of the highlights from the show, and from the Femto Forum’s press briefings on Monday…
Operator news
There was one new carrier femtocell deployment announcement at the Summit. Mosaic Telecom (a US regional carrier in Wisconsin) will deploy a UMTS femtocell solution from Nokia Siemens Networks and Airvana. The vendors claim it will be the world’s first commercial deployment to use 3GPP’s Iuh standard.
AT&T announced that the 3G MicroCell is now available nationwide across the US. This should remove the number 1 customer support issue about the product which is, according to Executive Director of RAN Delivery Gordon Mansfield, “when can I get one in my area?” Gordon’s talk at the Summit highlighted that AT&T is planning enterprise femtocell deployments, but that these are unlikely to be plug-and-play (despite some vendors’ protestations to the contrary, larger femtocells for enterprises do require some cell planning.)
Vodafone revealed that it has deployed femtocells for metro coverage in Qatar, and gave further details about its femtocell experiences in the UK and Spain. Lee McDougall, Senior Product Marketing Manager at Vodafone UK, said that the Sure Signal femtocell has provided a wide range of benefits, including subscribers moving up the tariff ladder, new customers joining Vodafone from places where they get no coverage at home, uplift in usage of voice, text and data, as well as some people trying data services for the first time with their femtocell. The business case relies on all these factors – there is “no single thing that makes it pay”. According to Sure Signal Product Manager Nicola Buckley, the company is now selling in a week the same number of femtocells it used to sell in a month, following Vodafone’s decision to “go large” on promotion earlier in the year (rebranding the femtocell as Sure Signal, reducing the price and introducing some innovative marketing). 6 teams of people have been pounding the streets to educate potential customers, and Vodafone has done 8 million ‘door drops’ for Sure Signal. Femtocell trials are also underway in Egypt and Greece.
Meanwhile, SoftBank Mobile in Japan said it has received 20,000 applications for its free femtocell in the last month, and that it expects to deploy up to 200,000 in the next year. The brakes may come off in October when the Japanese law changes, allowing SoftBank to handle the licensing paperwork after the customer has already activated the femtocell, rather than before activation. Yoshihito Shimazaki said that SoftBank’s addressable femtocell market with a basic coverage proposition is the 2% of its subscribers’ homes which the operator cannot reach with 3G (that’s over 400,000 subscribers, but presumably fewer homes / femtocells because some SoftBank subscribers will live together). However, SoftBank hopes to deploy over a million femtocells once they add femto applications, trials for which are planned later this year. Shimazaki-san also clarified that SoftBank requires customers to sign a new 2 year contract in exchange for obtaining a free femtocell. Free ADSL is provided as well, but exclusively for use by the femtocell.
Several other operators gave talks at the Summit. NTT DoCoMo wants to roll out LTE femtocells from 2011, Optimus said it uses open access for its business femtocells in Portugal because closed access is too complex, and Cellcom said operators who launch femtocells early will be the winners.
Surprising findings on consumer attitudes to femtocells
The Femto Forum has commissioned Parks Associates to do independent research into consumer attitudes to femtocells in the US. Some of the results are similar to previous findings from ABI Research (e.g. 56% of consumers find femtocells appealing), but there are many new results which strongly support the femtocell business case, and some that are quite counter-intuitive:
- 35% of consumers in multi-operator households would likely consolidate their services around a single provider who offered a femtocell.
- 72% of those consumers who found femtocells appealing (i.e. 40% of the total population) were very interested in at least one advanced femtocell service, and half of these (i.e. 20% of the population) are willing to pay $5 per month for one.
- Only 43% of people are happy with the Wi-Fi feature on their phones. 84% of people who frequently use Wi-Fi on their 3G devices find femtocells appealing.
Offload, data caps, femtocells and Wi-Fi
Unsurprisingly, the media latched onto the ‘operators are charging for femtocell data’ story this week following the recent criticism over AT&T’s pricing policy. The Guardian rehashed the story with a UK twist, blaming Vodafone for having the same policy. Light Reading discovered that AT&T carries femtocell data traffic through its core network to cover regulatory requirements for lawful intercept, which adds some cost compared to Wi-Fi. But Dean Bubley points out that by offloading the Radio Access Network femtocells still save the majority of operators’ costs, unless AT&T’s core network is “weirdly expensive”. An excellent new briefing paper outlining the case for using femtocells for data offload was published by the Femto Forum on Tuesday.
Some observers have suggested that operators prefer Wi-Fi for offload, but the reality is more subtle. Firstly, its important not to confuse two issues: (1) femtocells provide a great data experience and (2) femtocells are a natural choice for data offload. There is lots of evidence that 3G data is a key feature of femtocells for operators and consumers. Vodafone report increased data usage by femtocell owners, with some people trying data services for the first time on their femtocells. AT&T also say that they chose to deploy 3G femtocells because data was an important factor. And if you count subscribers rather than megabytes, there are far more people who cannot use Wi-Fi on their 3G phones than people who can. A femtocell is the only option for improving these people’s data experience at home.
Regarding offload, Wi-Fi and femtocells are both important. Wi-Fi is very useful to operators right now because there is a large installed base of APs in homes, which provides a potential way to offload large amounts of data traffic. However, there is customer resistance to using Wi-Fi. The Parks Associates survey results show that only 43% of people are happy with their phone’s Wi-Fi capability, and suggest that battery life is an issue. SoftBank also said at the Femocells World Summit that they prefer femtocells for offload because many people don’t activate Wi-Fi on their phones. And Vodafone said at the Femto Forum press briefings that femtocells will become more important for offload as the installed base grows. Right now, many operators are focused on Wi-Fi offload, trying to make Wi-Fi as easy as to use as possible on smartphones, but in the long run there will always be consumers who don’t comply. Femtocells are ultimately a more natural offload solution because they capture all the traffic and consumers don’t need to be coerced.
What the analysts said
Informa published its latest femtocell market status report, reporting that the number of operators who have announced femtocell deployments has doubled in the last 9 months. Telecoms.com sees an industry ‘in the grip of femto fever’, but Fierce Wireless is more cautious, pointing out that only 10% of US consumers currently know what a femtocell is, and speculating that enterprise femtocells might not take off without plug and play capabilities. Ian Scales at Telecom TV predictably applies a glass-half-empty filter to the Parks Associates survey results, and finds contradictions in operators’ femtocell marketing propositions. Meanwhile other traditional femto sceptics appear to be coming round to the idea; The Register reports “all smiles” at the Femtocells World Summit, and GigaOM says femtocells are “on the rise”.
Here are some more highlights…
Vendor announcements
In related news…
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