Market update for week of 18 Feb 2008

Further insights from O2

O2’s Head of Core Network Innovation, John Carvalho gave further insights this week into the operator’s femtocell plans. Interestingly, Carvalho sees femtocell price points stabilising at £50-80, but not before 2009 and not until mass deployments are underway. This is perhaps more realistic than Vodafone CEO Arun Sarin’s comments last July, in which he was looking for a price “substantially less than $100″ to trigger commercial launches.

Carvalho’s comments build on last week’s insights from Telefonica O2 COO Vivek Dev, who cited unheard-of levels of mobile Internet usage as a key driver for O2’s femtocell trials. When ip.access first published The Case for Femtocells white paper back in May last year, radio network planners already understood the coming need to deploy femtocells for offloading 3G data traffic from their macro networks. However, this idea raised eyebrows amongst the marketeers and industry analysts. Surely there was still plenty of capacity in the macro networks? Now the impending impact of flat rate data tariffs, multimedia handsets, high-speed networks and big brand web services going mobile has begun to sink in. Two analysts commented to me recently that “The Case for Femtocells” is looking rather conservative compared to the business case arguments they are now hearing directly from operators.

Hints that femtocells will be introduced in Korea this year

KTF says it is in discussions with femtocell makers like Samsung and Motorola with regard to equipment purchases.

Partner Communications to trial femtocells

Israeli operator, Partner Communications, plans to test 2G femtocells. 2G still looks like a relatively niche market for femto, with the major operators strongly focused on 3G.

Femtocells to kill fixed telephony companies

To continue the Israeli theme, Motorola Israel general manager Elisha Yanay says femtocells could kill off the fixed line telephony companies. (This is, or course, dependent on the availability of naked DSL – otherwise the subscriber needs to pay for the fixed phone line in order to get the DSL connection that supports the femtocell.)

But T-Mobile USA introduces landline VoIP

With the “HotSpot@Home Talk Forever Home Phone” service, you simply plug your existing home phone into the HotSpot@Home wireless router in order to get unlimited calls for $10 a month. It’s the same router used for T-Mo’s mobile HotSpot@Home dual mode service for mobile phones. The router has built-in features to prioritise voice calls over other Internet traffic and enhance troubleshooting support for the call centre.

It also appears that T-Mobile has unbundled the “cheap calls” part of its dual mode WiFi service (now called “HotSpot@Home Talk Forever Mobile”) from the basic “coverage at home” proposition.

Nokia & Ericsson also appear to prefer WiFi

“George Fry, director of technology alignment at Nokia [said] Wi-Fi would be more acceptable than femtocells in both corporate and consumer households because so much other data is transmitted via Wi-Fi. That makes offering converged services easier.” He’s not singing from the same hymn sheet as his NSN colleagues.

Further comment on the idea of rolling out 4G from the indoors out

There’s been quite a bit of speculation that LTE networks will be deployed using femtocells and picocells initially, with the outdoor network being deployed later as a fill-in. This article suggests that femtocells could deliver 120 Mbps Internet browsing (although it appears to overlook the bottleneck in the fixed broadband connection to the home).

Telco 2.0 on femtocells

They’ve spotted that femtocells are “an emerging British speciality”.

ip.access / Mavenir partnership gets some press

Maybe femto services will help the public get over the “carcinogenic whiff” of mobile base stations.

The Register asks why the %&*! would I want a femtocell?

Andrew Orlowski points out that, with femtocells, consumers are subsidising the mobile operator by paying for the running costs of the access network (power and backhaul). He wants to see more benefit for the consumer than simply improved cellphone coverage; “free calls at home should be the least we settle for,” he says.

AirWalk raises $10 m

The new VC money will be invested in EdgePoint CDMA femtocells (despite Heavy reading analyst Gabriel Brown’s prediction “you can see the end of life for CDMA now”).

Will broadband operators have a problem with femtocells?

Same old story – they won’t want to block femto traffic for fear of a net neutrality backlash, but they won’t exactly be happy to carry their competitors’ cellular traffic. The article suggests that usage based pricing for broadband could be the answer. However, femto traffic is going to be a small proportion of the household’s overall Internet traffic, and tiny compared to the P2P stuff which is causing broadband providers a headache today.

And finally, the Femto Forum issued its second newsletter. Nice one, Simon!