At around this time last year we published an article about how femtocell technology was finally moving forward. Although there has been some progress in the development of this mobile technology since that time, most companies are still drawing out the process of femtocell trials rather than making this technology available to the public. This is in spite of the fact that there has been a significant increase in demand for the technology. Customers today not only want access to femtocell technology but also want it to be 3G femtocell technology which is only just beginning to be released. Experts are pegging 2010 as the year that this technology really takes off but we’ll have to just wait and see what the market reveals.

What is Femtocell Technology?

In brief, a femtocell is a small base station that can be installed in the home or office. Its main purpose is to improve call quality during indoor calls. It connects to your broadband network which reduces the drain that mobile broadband services place on carriers (and therefore increases the carrier’s network capacity so that you can get better call service). A major change to the technology that is taking place right now is an emphasis on 3G femtocell technology which boosts indoor call quality for 3G phones.

Demand for 3G Femtocell Technology

There is a high demand for femtocell technology in the market today. There is a specific demand for 3G femtocell technology. This demand comes from both individuals and businesses but is specifically driven by 3G phone customers who want to be able to utilized their advanced smartphones to full capacity in their homes and who are having trouble doing so because of limited coverage and capacity in their network areas. Juniper Research reports that this demand is driving the growth of femtocell deployment and predicts that there will be 15 million subscribers to the technology as early as 2012. These subscribers will be based primarily in North America, Western Europe and China.

Femtocells in the Market Today

We keep hearing rumors about femtocell trials and technology but there are very few femtocells that are actively selling in the market yet today. Those carriers that do offer this solution stand out as leaders in this emerging area of mobile technology. Examples of these few carriers include:

- Vodafone. This UK carrier launched a 3G femtocell solution in July of this year called Access Gateway. The launch comes after only six months of testing. Their solution requires an existing broadband connection and allows for up to 4 3G calls to be placed at once through the connection. The phones that are allowed to use the solution must be registered with Vodafone in advance. The price is a £160 one time payment or a smaller monthly fee.
- Sprint. In the United States, the company that has been most successful in deploying femtocell technology to date has been Sprint which rolled out a nationwide option called Airave in fall 2008.
- Verizon. Also in the United States, this company created a femtocell model mirroring that of Sprint’s and released it later in 2008. The problem with both Verizon and Sprint is that the technology is primarily used in areas that are already known for poor call coverage quality and therefore aren’t consistent solutions for everyone in the network. In fact, it is notable that neither company overtly advertises this solution and tends instead to only offer it to customers who are threatening to switch carriers because of poor coverage.

Trials and Plans for 3G Femtocells

The solutions that are offered by Sprint and Verizon in the US are 2G femtocell solutions. Only Vodafone has successfully launched a 3G femtocell device intended for residential customers. But there are plans in the works from several companies:

- AT&T. Many people love their iPhones but hate the fact that they get terrible indoor call quality on their devices. AT&T has been promising a 3G femtocell solution to be released sometime in 2009. However, as of the writing of this article, there is still no set date for when this will be released.
- Samsung. This company is working on making a new 3G-compatible femtocell device that would be compatible with several carriers. Rumors indicate it should be available in early 2010.
- Ubiquisys. In terms of femtocell vendors, the company to watch right now seems to be Ubiquisys. They’ve recently received $11 million in new funding to assist in deploying 3G femtocell solutions both residentially and commercially. The CEO of the company believes that rapid deployments of the technology will be possible due to current market demands.

What’s Taking So Long?

One question that people who are familiar with femtocells keep asking is “why is this all taking so long?” The carriers that are testing out femtocell technology seem to be engaged in lengthy trials that don’t result in any clear cut answers as to when the technology will be deployed nationally / globally. There are a few reasons for this:

- A hesitant market. Although all research indicates that customers will buy femtocells, many carriers are concerned that this new technology will flop. They are taking their time putting out the devices because they want to reduce their risk of profit losses.
- Unsure about pricing. This is a new market so carriers aren’t quite sure how to price the new devices. In Europe vendors are quoting a suggested price of euro 150 for stand-alone femtocell devices but this excludes added features like interference management which can boost the price to euro 275. Multi-functional devices are even pricier. Carriers aren’t sure quite how to introduce these pricey devices to their customers.
- Changing technology. The shift that has taken place from 2G to 3G requires changes in the technology that has been created in femtocell development to date.
- Waiting for applications. Telstra in Australia reports that its customers already get good indoor coverage so there’s no need to deploy femtocell technology yet but agrees that it would “get in the game” once additional applications for the technology became clear to them.
- Troubleshooting legal issues. Finally, this technology is new enough that there remain some legal issues to be worked out. How do we prevent other people from jumping on to the customer’s device? What options do we have for making sure emergency calls can go through the device in case of a power outage? How do we comply with spectrum requirements in deploying these devices? These are all questions that carriers have to answer as they start to release femtocells to the market which explains some of the delay in the process.

The Future of Femtocell Technology

Research by Juniper suggests that the future of femtocell technology is going to proceed in a rather interesting manner. It is believed that femtocells will first take off in the market as standalone devices. Sales of these devices will begin in 2010 and will rapidly increase throughout 2011 and 2012. However, it is believed that there will then be increased attention to incorporating femtocell technology into multi-functional devices. For example, the technology might be incorporated into your home’s wireless router. Juniper predicts that by 2014 it is these integrated multi-purpose femtocell units that will really be receiving attention in the market. 5 years from now we should all be familiar with how femtocells work in the home.