Femtocell market update for week of 22 June 2009 – part 1

Operator news from the Femtocells World Summit

It’s been a big week for femto news on the back of the Femtocells World Summit in London.

Vodafone announces UK consumer femto launch

Vodafone opened the Femtocells World Summit by announcing that the Vodafone Access Gateway will be available in the UK from 1^st July.  The device is a standalone 3G femtocell access point from Alcatel-Lucent and Sagem, which has already been tested over multiple ISPs’ broadband connections in trials with over 1000 users.

The Vodafone Access Gateway will initially be pitched as a simple solution for 3G coverage issues at home, and will be available on a variety of tariffs (including to pre-paid users):

Femto AP price	Monthly fee	Included
£0	£15	Femto AP Ericsson C510 3G phone 100 minutes & 500 SMS
£0	£30	Femto AP HTC Magic (Android) handset 600 minutes & unlimited SMS
£160	-	Femto AP only
-	£5, £7, £10	Femto AP only (24, 18, 12 month contracts)
Free of charge to subscribers on £60 per month tariffs

Mobile Europe has an exclusive video interview with Lee McDougall, senior product marketing manager at Vodafone UK, who says femtocells will serve a small market (but he could hardly say otherwise without implying that Vodafone’s network offers poor coverage).

Here’s how the analysts have reacted to the news:

Mike Roberts (Informa): “This is huge for the femtocell industry.  A launch by a major operator in tough economic times shows they’re convinced there’s a strong business case for femtocells.”

Matt Hatton (Analysys Mason): “Vodafone is pitching the initial price high to skim those subscribers desperate for better in-building coverage…I’m sceptical about the level of demand in Europe though, where in-building coverage tends to be good.”

Bill Ray (The Register): “This is very much the first step for Femtocells…but Vodafone’s announcement marks the start of wide scale deployments that could see a base station in every home with remarkable speed.”

Steven Hartley (Ovum): “…a femtocell offer that is an improvement on what has gone before, but still a relatively niche offering.”

Peter Jarich (Current Analysis): “The industry-at-large may be disappointed by this service’s failure to reflect the full potential of femtocells for lower-cost, homezone services and innovative applications, but this launch does a wonderful job of identifying a real consumer problem (poor indoor 3G coverage) and fixing it with a highly strategic Trojan horse of a product.”

Steve Shaw (on UMA today): “Of course, Orange has offered its Unique service, based on Wi-Fi, in the UK for some time now…Looks like it’s Game On! for FMC in the UK.”

Even the long-time femto sceptics at Total Telecom now believe that “the tide may be turning” (although, as in the past, their opinion is based on a rather slim survey – this time one person in the office.)

There has been a sense that femtocells were going to be slow to arrive in Europe, and Vodafone’s announcement should provide real impetus.  It will be interesting to see whether it drives a competitive response from other European operators.

ATT on track for 2009 femtocell launch

AT&T’s executive director for radio access network delivery, Gordon Mansfield, told Unstrung “We’re on track for a full national launch by the end of 2009.”  In the coming weeks, he said AT&T “will expand [their consumer trials] into a marketing trial of the 3G Microcell, which will be open to customers through our AT&T stores…in a handful of cities”.  Mansfield confirmed that AT&T will launch with a standalone 3G femtocell, but is also looking at options for integrating femtocells into residential gateways.

T-Mobile International won’t be pushed into femto launch

T-Mobile International’s senior VP of radio networks engineering Klaus-Jürgen Krath told Unstrung, “We won’t be pushed by [Vodafone’s] announcement…There is not any firm launch plan that I can disclose now.”  T-Mobile recently extended its femtocell trial in Germany and is using Huawei and Ubiquisys access points in some of its own retail shops.

Third time lucky for Orange?

Presenting at the Femtocells World Summit, Orange’s head of voice marketing Robert Swift said femtocells were Orange’s third attempt at an in-building solution for business customers.  Following failures with UMA and 2G picocells from now-defunct vendor RadioFrame Networks (unfortunate choice), 3G femtocells are next up.  Swift said Orange plans to launch femtocells in up to three key markets with two vendors involved.

“Femtocells are like crack…trial customers don’t want to give them back,” he commented.  But despite this enthusiasm, Swift was cautious about the opportunity for femtocells, arguing that the business case works well for volume deployments but that technical challenges mean operators want to begin by “dipping a toe in”.  He was also keen to point out that UMA, rather than residential femtocells, remains Orange’s strategic choice for the consumer market.

SFR worried about public health concerns

SFR’s director of network marketing Guillaume de Lavallade (another speaker at the Femtocells World Summit) said French consumers are concerned about potential health risks from cellular antennas and handsets.  “You can explain that the emitted power of femtos is 10 times less than that of WiFi, comparable to a DECT phone, and that 3G handsets emit less power when connecting to the femto than on the macro network,” he says, but “it’s difficult for an operator to take those facts and figures to the consumer.”

Following common practice across the pond, CNET immediately labelled the Vodafone Access Gateway a “mini mobile phone tower”, which apparently goes down quite well with US consumers.  However, this is unlikely to please European operators, who are generally much more concerned about media scare-mongers playing on the health issue.

The Femto Forum, GSMA and MMF have published a paper explaining the facts about femtocells and public health.