Thursday, June 5, 2008

Femtocells poised to boost cell phone performance at the home level

By Jay Rizoli

For many users, a cellular phone is truly a mobile device — reliable on the road but considerably less so at home. In transit, your call can bounce from cell station to cell station, but elsewhere you may be at the mercy of the building you’re in or the location of the nearest cell tower, unless that cell site is in your home.

No, we’re not talking about the collection of antennas, transmitters, receivers and processors clustered on an unsightly hilltop tower. The home version, the femtocell, is a small, low-power cellular base station that connects to a customer’s broadband Internet service to enhance cellular coverage and high-data speeds to mobile phones in the home. While there aren’t many of the router-sized devices in the United States today, industry experts say femtocells ultimately will be an integral part of the broadband infrastructure for the home — experts say that market will gain momentum by the end of 2008 — and, eventually in office buildings where cell coverage is poor.

“Every major vendor worldwide has some stake in this, whether it’s in manufacturing or strategic agreements with other companies,” said David Donovan, vice president of business development at radio-frequency integrated circuits manufacturer BitWave Semiconductor Inc. in Lowell.

Locally, those companies involved in the femtocell market include BitWave, convergence server maker Tatara Systems Inc. of Acton, femtocell manufacturer Airvana Inc. of Chelmsford, mobile semiconductor maker Skyworks Solutions Inc. of Woburn, IP infrastructure provider Sonus Networks Inc. of Westford and software radio maker Vanu Inc. of Cambridge.

“The cost to put in macrostations is expensive. There are environmental issues and other concerns,” Donovan said. “Femtocells came into the picture to address both issues. As soon as you walk into the house the call transfers and moves to the base station, so the connection is very short.”

“More and more, we are seeing the cell phone used as the primary phone,  because it is a personal device for both voice and data that is always with the user,” said Sanjeev Verma, co-founder and vice president, femtocell business and corporate development, at Airvana. “More than 50 percent of mobile phone calls are made in a building, and many would say that number is actually significantly higher.”

For cellular network operators, femtocells — and their larger cousins micro- and picocells — offer the opportunity to reduce churn and increase coverage where their macrostation presence is lean as well as a means to reduce traffic on the existing macros. For femtocell users, it’s five bars and better connections using Internet backhaul, power and real estate that the consumer already paying for.

But deployment faces a handful of hurdles, including regulatory issues, interference with other devices, differing cellular standards, costs to be absorbed by the consumer, and selling the technology to those consumers who don’t have connection problems. The Femto Forum, an industry group working toward adoption of the technology, has working groups addressing those challenges, said Steve Collins , vice president of marketing and development at Tatara and a Femto Forum board member.

Regulatory issues, Collins said, include necessary licensing — the device is, after all, a radio — as well as the inclusion of 911 emergency service and tracking capabilities for law enforcement. Interfering frequencies also pose a problem going forward, but Collins points out that early adopters are likely to be users whose poor service stems from a lack of macrostations, “so there’s nothing to interfere with.”

“There are a lot of barriers that need to be overcome including consolidation,  standardization, and interference,” said Stuart Carlaw, vice president, mobile wireless, at analyst firm ABI Research. But the real crux of the matter is getting products down to sub-$100 wholesale and also finding a strategy and business model that will support the solution —  how is it marketed and sold, what are the services and how will you make money out of it?”

Collins added, “The question is, if I’m the customer and I get one, am I going to have to pay? Will I pay $50 and (the operator) would pay the rest? It’s highly likely this functionality will be packaged in other things. Like any consumer market there will be a range of price points. There will be high-end, snazzy options that people will go out and buy like high-end audio.”

Donovan said that while the vendor-subsidized model is likely, “They’re not going to want to subsidize at a high dollar number forever.”

But Verma pointed out that reduced operator cost for macrostations and expanded capacities could translate to a financially-attractive flat-rate model for consumers. That could help lure those users who don’t have coverage problems.

The jury is still out on where femto will make the biggest splash. Most observers see consumer markets as a more-ready place, with enterprise deployments rolling out more slowly.

“Personally, I think it will be deployed where people like to use their cell phones,” Collins said. “It’s no more complicated than that. People move around and use their phones, and then find that they can’t use it at home. Also, I think small business will be very viable. Larger enterprises, not so much. There’s equal viability there, but the wheels turn slower.”

Bitwave’s Donovan added, “The business cases haven’t been really nailed down yet. The market isn’t quite ready to deliver that yet.”
 

Jay Rizoli is a freelance writer based in Franklin.