I see that Ericsson has jumped into the fray with a femto product. I haven't yet been offered a full briefing on this, but will most more as I find out.
This line in the release is intriguing: "it offers full integration with the radio macro layer. The same radio frequencies can be used both by the Home 3G Access Point frequency and the outdoor radio macro network allowing maximum usage of the scarce and expensive radio spectrum". I guess this means that some of the RF planning is simplified - although to what density of femto's is unclear, or whether the operator's existing macro network needs to be from Ericsson. Given that many of the femto's will also live "inside" a firewall embedded in a DSL/cable gateway, I'm also unclear as to how the management of this might work - unless it's the same operator's customised gateway box rather than a retail Linksys/D-Link/Brand-X one.
It also appears that O2 made encouraging noises about femto's last week at a press event. A couple of articles cover this - Peter Judge at Techworld mentioning an Ericsson device in his piece, but with a confusingly contradictory mention of an ip.access box in this one.
Separately, I notice that Ericsson announced an update to its IP-PBX range, including a "corporate telephony client" for smartphones. Unfortunately, it appears to only support devices from the company's part-owned SonyEricsson range. This is a huge mistake, and one which indicates how far out of touch Ericsson is on the realities of fixed-mobile convergence in the enterprise. Device choice is extremely unlikely to be made with PBX interoperability as the sole criterion, especially from such a small range of suitable products. It is notable that its IP-PBX peer Siemens now has generic support for Windows Mobile devices, while clearly Cisco and Avaya support Symbian S60, Windows and increasingly even Java/BREW.
Dean Bubley's Disruptive Wireless: Thought-leading wireless industry analysis
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As a shareholder in a major mobile operator I will be disappointed if the operators decide to basically more than double subscriber acquisition cost - say €70 phone subsidy and €70 femto subsidy (if you believe the CTO's €100 figure and an example €29.99 sales price) - plus commission for a connection ( €20+). I don't see how paying a for SIM and then having to buy and pay for coverage that *they* should be providing as part of my pre-pay premium or monthly subscription is a great value proposition. Exactly what are these new services ....?
So what is the business case for femtocells anyway?
I can certainly see the benefits from an operator's perspective (get someone else to pay for your indoor coverage problems), but what's really in it for the end-user?
There's got to be more than just better indoor coverage for there to be end-user pull for this type of technology.
At home, 3G femtocells compete against Wi-Fi APs. Why would end-users choose broadband access on their mobile phone using 3G femto over plain old Wi-Fi access on a device with a much larger screen?
Enquiring minds want to know...
As far as I know, nobody is suggesting that people will have a home femtocell and not have WiFi as well, either in an integrated gateway or a standalone AP.
You'd use WiFi for your "IT" and "consumer electronics" needs, eg connecting up laptop to desktop, maybe media streaming round the house etc. No change there. Nobody sensible expects there to be many broadband homes without PCs.
You'd use the femto for extension of your mobile service indoors at better signal strength / higher speed / lower price, specifically to non-WiFi handsets (ie 98%+ of today's and 90%+ of future handsets which will be mobile-only)
Conceivably, there will be certain instances where operators might suggest indoor 3G-based "services" that could compete with WiFi/Internet-based "applications", but initially it'll just be focused on cheap indoor voice & better coverage. I guess that ultimately some operators might want to suggest using indoor 3G as an access to their IMS, for new walled-garden multimedia services, but I suspect that's a very long way off in terms of both time and commercial plausbility.
Dean,
You said it yourself its about cheap indoor coverage for voice and text.
So is this a recipe for burning serious amounts of cash = subsidizing a lower income with a difficult business case, very hard technical and customer service challenges and no real new services/revenue streams?
My question is simple ... whats driving this and why - vendor hype? or the operators marketing departments? Who is smoking who's fumes?
All views gratefully received!
Who said anything about the operator having to subsidise the cost of the Femto? These will be wholesale sub-$100 boxes. No keypad, no battery, no display, no memory card slot. 3G System-on-a-chip + a status LED and a dirt-cheap 5V PSU, in a plastic box.
If I could have good quality indoor coverage today by purchasing a £100 box, I'd be there in a shot. I know a lot of others who would too. And I don't live in the wilds - I'm an hour from Waterloo on the main line.
Femto for me = no more sitting on the window sill to make a call. I have great coverage outside, but indoors, downstairs, behind double-bricked walls, it's no good.
Whoever gets a Femto service working well will have uber-sticky customers.
And they will likely be living in suburban/rural areas with poor or no 3G coverage. Probably a good demographic earnings-wise.
As the gummint pushes working from home, reliable 3G coverage for voice and data will become increasingly important.
Not to mention all the SME's and corporates who like the idea of extending their 3G network coverage to other workplaces.
People who don't see a market for Femtocells should remember Henry Ford: 'If I asked my customers what they wanted, I'd have given them a faster horse'.
Mike
As the earlier blogger suggested subsidy is likely going to be a fact of life. Today, even a mega-mass produced Asian manufacturered white-labelled $25 WiFi DSL router is subsidised to get the user onto broadband and these are less complicated than a femtocell.
The end-user pull has to be the value for $whatever outlay has to be much greater than the inconvenience/cost of moving to a different provider (with number portability) and/or forwarding the call to a landline or skype-in #.
To a previous poster - whats the contents for the sub $100 bill of materials - 3G SOC sounds fantastic. Does it include all of the 3G/HSPA/WiFi/DSL/Ethernet/IP routing processing and RF front-end and include the IPR fees to patent holders?
do you have a link you can post?
NB
If I already have Wi-Fi at home and I want to get online, I use my laptop and the Wi-Fi connection.
Why would I want to use 3G when I am at home? Why would I spend the money to buy a 3G femto when I've already got Wi-Fi?
What is inside the walled garden that's so compelling that will make me tolerate the small screen of my phone vs. the visual extravaganza I can get on my MacBook via Wi-Fi while I am at home?
The main use case for "3G at home" is simple - it's the same as the killer app for 3G anywhere else - it's voice. Yes, 2G indoor coverage is often better, but operators may want to push everyone to 3G anyway for cost reasons.
The second category is "things you're too lazy/busy to go to the PC to do" - checking your email from the sofa, watching mobile TV in the bathroom and so on. ie stuff that is demonstrably better on your PC or main TV, but which for whatever reason you choose your phone as an easier option. There's a significant addressable market for lazy / stupid / wasteful / impulsive access to content & services (eg ringtones), so why not exploit it?
The third category is "clever new stuff that operators might deploy over 3G". Clearly this is both speculative and in many cases implausible. However, while I regularly decry the lack of innovative talent among the world's mobile providers, there are occasional flashes of inspiration. It could be that you've got a 3/Helio-style flatrate tariff, so using the phone instead of PC indoors incurs no extra fees. It could be that there's a cool walled-garden-only community app (yes, unlikely I know). Or maybe you want access to one of the 3G-only IMS applications that might finally get deployed in 2013.....
"...watching mobile TV in the bathroom..."
OK now I am sold.
Where can I buy 3G femtos again? :)
So to satisfy the target market of poorly covered bathrooms .... lets examine the complete supply chain!
1. Silicon vendors - start the arms war now - if you haven't got a 3G SOC with all the bells and whistles, you'd better have, and get it designed before you've sold 10,000 of what is you have today ...
2. Femto OEMs - its a commodity before you've sold 1 box ... your Release 2 product better be on the drawing board as Release 1 won't cut it .... at least 5 vendors have product and its going to be horrible (10-20% gross margin) before the fast followers move in and go for a land-grab selling below cost. Everyone will have access to the same 3G SOC silicon vendor who will be scaled to deliver 100MM units (of course).
3. Distributers ... get ready for a mountain of boxes. Business case - hey don't worry, business model don't worry (someone else is picking up the tab). My advice sell a couple of towels with each femto as your value-add!
4. Operators. Turn your business model on its head - remember you were set up to deploy/manage ~10,000 basestations its only 3 orders of magnitude more ... you can explain 3 to anyone! The need for new mass market, wireline IP networking and broadband access/delivery know-how is #20 on the list whilst you train the customer service team. Ohhh yeah don't forget RF planning .....
6. Regulators. Yes, you need a new class of radiating device in the home that relaxes those nasty stringent specifications that hordes of engineers have spent years figuring out to manage interference. Legislative time won't be a problem (trust me the bathroom lobby is very strong & vocal).
8. Banks/VC firms/Management teams ... cheque-books at dawn! The supply chain is convinced and no-one will want "cash on order" - you'll just have to take my word on this.
7. End users .... pop down to "Femto's R Us" wait in the queue (and don't be taken in by the impulse towel or bath salts purchase at the point of sale) and start running the bath .... its coming, honest, everyone is completely aligned!!!! You can wait at home sitting on your window sill.
Is there a better way???? Is all of this going to happen in the next 12 months???
NB
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