(Original posted at http://www.von.com/blogs/guest/2009/05/femtos-consumer-subsidized-network-buildout.aspx )
Recently, it was reported that the 3GPP, the Femto Forum and the Broadband Forum have reached agreement on standardization issues.
So what is a femto?
Wikipedia defines a femto as: “a small cellular base station, typically designed for use in residential or small business environments. It connects to the service provider’s network via broadband (such as DSL or cable).”
Femtocells are the carriers’ implicit admission that they can’t deliver either the coverage or capacity required for an optimal experience to consumers or enterprises. So, the “answer,” is to shift the network build-out and backhaul costs to consumer.
But aren’t femtos already ubiquitous today? What is an 802.11 AP, if not a femto? T-Mobile “gets it” today, with its UMA service T-Mobile@Home, which allows customers to use Wi-Fi instead of cellular, for calls made from home. It shifts capacity from T-Mobile cell towers to indoor Wi-Fi APs, and the benefit to the consumer is that that they’re not paying for cellular minutes.
Wi-Fi APs deliver wireless capacity throughout homes, enterprises, hotels, venues, retailers, restaurants, airports and Main Streets around the world. Devices of all kind are able to connect seamlessly, and they leverage the existence of wired broadband backhaul.
So another way of looking at it may be that a “femto” is a cellular AP. But if I’ve got a Wi-Fi AP, why would I want or need a femto, especially if it’s something for which I have to pay?
Do you think wireless operators will subsidize femtos? Not a chance. Look at the PVR or modem/gateway model for your answer. Even if you don’t have to fork out the upfront capex, consumers will pay a monthly rental fee to cover the cost of the cellular base station. Once again, the cost burden is shifted to the consumer, but in this case it’s the costs of a network buildout and backhaul.
As a mentor of mine once said, “I can see how that’s good for you, but how’s that good for me?”
That’s my .02!
Martin Suter
Martin Suter is vice president of business development at BelAir Networks, the global market share leader in service provider Wi-Fi, enabling 3G data offload for wireless carriers, quad-play for cable operators, and managed WLAN business services. Previously, Martin was the CEO at Cohda Wireless, where he raised the company’s profile and negotiated a licensing deal with a Fortune 100 vendor in its core franchise. Prior to Cohda, he was vice president of business development at MeshNetworks Inc., a classic tech transfer/disruptive technology success story that achieved a major liquidity event for its investors in Q4/2004 with its acquisition by Motorola. Martin also was responsible for building several high profile alliances with and for leading technology companies, including Fujitsu, Microsoft, Netscape, Sun Microsystems, and Teradata. Additionally, Martin has successfully negotiated technology transfer, distribution and/or licensing deals with companies like 3Com, BioChem Pharma, Dow Chemical, Exodus, Fujitsu, IBM, Microsoft, Motorola, Netscape and Sun.
