Analysts Pin Future on Femtocells

By Eric Griffith

June 15, 2007

UPDATED: Wi-Fi/cellular combos for extending networks are popular now, but femtocells may take the lead.

If you don’t have mobile phone service that reaches your home or office, and you can’t stand those old-fashioned, standard POTS phones, carriers will soon be offering you a couple of choices. One option is to put a femtocell in the dead-spot location -- it basically extends the cellular signal to your personal locations for “in-home mobility” and makes it powerful enough for data transmission, too. The other is to support a fixed/mobile convergence of Wi-Fi and cellular on one handset, so when it's out of tower range, you can talk on it using VoIP through a Wi-Fi router.

ABI Research says that of the two choices, FMC has an early lead, but that’s not likely to continue. ABI anticipates that the subscriber level for femtocells -- A.K.A. "access point/mini/home base stations" -- will hit the same numbers as FMC by mid-2010, after which femtocells will skyrocket. [Corrected 6/15/2007.] Even a company heavy in the FMC world, Kineto Wireless, developer of the UMA technology used by some carriers for FMC, says UMA is a perfect backhaul technology to power femtocells.

Right now, FMC in the consumer market is limited in the U.S. to T-Mobile; there’s more competition in Europe, where Orange, BT and others are giving it a try. But right now, ABI says Vodafone, SFR, Softbank and Sprint are all exploring their femtocell options. “With their ability to work with any handset, and their potential for encouraging high data use, femtocells are very attractive when compared to VCC (Voice Call Continuity) and UMA-based Wi-Fi services,” says ABI research director Stuart Carlaw.

In-Stat recently did a survey and found that half of the early adopters they talked to want Wi-Fi in their next cell phone. The Wi-Fi Alliance will have 100 models of FMC phones certified by the end of 2007. Of course, not all of those phones will work in the same way. Consumers will likely need phones supporting the UMA, and probably the majority of the phones will support technology like SIP, which allows for Wi-Fi calls over a digital IP PBX -- in other words, a more controlled environment, like a carpeted enterprise. In-Stat thinks issues like battery life in dual-mode handsets will be fixed in many of the models coming out this year.

What's lurking in the distance? WiMax, of course. Parks Associates said last month that the mobile version of the tech will be responsible for 8% of all mobile broadband in the world by 2012, about 88 million users, and you can bet by then that “4G” tech will be found in many a phone.

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