Femtocells go commercial

All of a sudden, the world seems to have gone femto-crazy ... or more accurately, operators have finally decided to bite the bullet and deploy services. Disapppointingly, this seems to mean that my big brave prediction for 2009 has been shot down only six months into the year. I still maintain that LTE will be the bigger opportunity for femtocells, but nevertheless the news that Vodafone and AT&T are launching commercial services this year goes to show that there is some immediate and real opportunity as well.

However, looking deeper into the news and you get a sense of some of the underlying themes which will now start to come to the fore.

1. Quality of Service: Suffice it to say, if I used a Voda femto in my flat in London, I would struggle to get more than three words out so bad is my Tiscali broadband. The simple fact is an operator can never guarantee QoS. In a conventional network, they can guarantee it throughout the core as far as the cell site, but as soon as it hits the RAN, there are so many environmental variables (pesky things like buildings that get in the way) that the operator can only then do a best effort. Now, in theory, femtocells solve this problem - it fixes the in-building RF problem. But, if operators such as Vodafone then use the subscribers' own DSL connection to backhaul the call, they have again surrendered control over QoS. In fact, they've taken a step back. While they can optimise the RAN, they have no control over the ISP.
2. The Form Factor: At the moment, AT&T and Vodafone are planning to go to market with standalone femtocells. The marketing wizards at AT&T have branded theirs a '3G microcell, clearly expecting the US consumer to be tech-savvy, while Vodafone have gone the route of calling it an 'Access Gateway' (access to what, you can already hear consumers asking). However, AT&T has also alluded to 'integrated femtocells' coming later, and this is perhaps where it becomes a real consumer market. I sat in a briefing by Continuous Computing* with Ovum this week and this point came up. Although a lot of the details are still under wraps, Continuous Computing said that not only are about half of their femtocell design wins are with set-top box manufacturers and the like, but that we should be seeing the first integrated femtocell products shipping around late 2009 / early 2010.
3. The Pricing: Well, this really is the big one, isn't it. The pricing from Voda has that the femtocell with be free on selected tariffs (so operator subsidised like handsets) and also bundled in some phone packages. If you buy the femtocell as a standalone, you're looking at £160 or £5 per month. I won't even try and digest the different phone packages since I've always maintained their are designed solely to confuse but it's clear that the subscriber is going to have to pay extra to solve a coverage problem which you can be pretty sure they weren't warned about when they first bought their shinny 3G handset.
   

But let's not be churlish. Femtocells are going commercial with two tier 1 operators and for an industry that has invested time, money and effort in creating the market, that can only be a good thing. Well, provided they work and deliver on the subscribers' expectations that is ...

* Continuous Computing is an AxiCom client

It was only a matter of time ... the great branding machine that is Apple has been pulled up by the regulator. Only its the advertisting regulator (the ASA) not the telecoms one (OFCOM) that's done the deed.

Apple may be redefining the mobile user experience with the iPhone but it's also had to finally accept that it can't control the whole experience. It's dependent on the mobile operator and their network.

So what does this all mean? Well, Apple is taking a risk with its brand. Suddenly, the Apple experience (or is that the "i-xperience"?) isn't controlled end-to-end by Stevie J. There's a crucial link - the mobile network - which has a massive impact on the user experience and is beyond their control.

Not only that, but if you look at the stats being reported back by the likes of ATandT about the impact the iPhone is having on their network, and you realise that the mobile network is creaking under the strain. The mobile operator's getting hammered. The iPhone experience is getting hammered. And now, finally, the regulator has stepped in and pointed out to Apple that there is a real world out there, inhabited by real people who are using the iPhone to do real things.

So let's applaud Apple for doing what they do best ... creating and sharing a dream. But let's also remember that dreams can be interpreted in multiple ways. And how the subscriber interprets it will depend on the quality of service on the mobile network to which they are subscribed.