Femtocells Not on the Christmas Wish List this Year
Back in September, I chatted with the Femto Forum to get their outlook on femtocells — the little cell sites for homes with poor network coverage. “Anticipated optimism” was the general feeling I walked away with, but questions lingered as to how consumers would take to personal cell stations in the home. You can read my full report (subscription required), but suffice it to say that Unlicensed Mobile Access, which uses Wi-Fi, and pass-on costs to the consumer could be femtocell roadblocks.
There’s also the issue of slow adoption rates by carriers to get femtocells in front of potential consumers, and that may have hurt sales this year. Geek.com caught an ABI Research note that suggests sales aren’t as good as expected this year. How bad are the numbers? ABI is slashing its femtocell forecast in 2009 by 55% of what it was. Earlier forecasts predicted 790,000 femto deployments, but new expectations peg that number around 350,000. And it doesn’t take a crystal ball to forsee 2009 sales when we’re already halfway through November, so I gather that these numbers are spot-on. 2010 doesn’t look much better — ABI is cutting sales estimates for next year by 40% as well. What reasons do they give?
“[t]he general economic malaise, which makes the $150 pricetag of an unsubsidized femtocell harder to swallow; the time operators need to get their systems and networks ready for a femtocell deployment and to devise innovative pricing plans; a fear in some quarters that a rapid increase in femtocell numbers would cause interference in the macro network.”
In my chat with the Femto Forum, I specifically called out the price challenge, but not because of the economy. Instead, my thought is a reluctance for consumers to pay the carrier when the femtocell decreases demand for the carrier’s network by producing supply using the customer’s backhaul — the extra network coverage gained requires traffic to be routed over the home broadband network you’re already paying for. I suppose that folks who can’t get cellular service in the home, the price will be well worth it, but are there enough of those consumers out there?
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AT&T and Verizon should offer discounts to femtocell customers that also subscribe to their fixed broadband services.
It may make more sense for carriers to offer these free to institutions with hard-to-penetrate buildings, offices, etc. If a carrier installed them free in universities, for example, guess carrier the students, faculty, and staff would choose? The carrier they can use indoors.
Paying a cell operator for a femtocell is rewarding them for providing crappy network coverage, then bootstraping it on your dime monthly.