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Femtocells or Wi-Fi? That is the Question

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Femtocell frenzy is how one paper described the Mobile World Congress Show in Barcelona last week, but at the Portable Computer and Communications Association meeting held Tuesday and Wednesday in Plano, Texas, the solution to the fixed part of fixed-to-mobile convergence seemed to be Wi-Fi.

As Tammy Wheat, director of Ericsson’s enterprise solutions division, noted, Wi-Fi is the solution of choice among enterprise vendors because it gives them the illusion of control and because it’s “free.” Of course, configuring a wireless network that’s robust enough to deliver quality voice over cell phones is expensive, but it is something the corporate IT guys can take care of. By contrast, femtocells are essentially equipment provided by the carrier that rides on the incoming broadband network.

George Fry, director of technology alignment at Nokia, echoed the idea that Wi-Fi would be more acceptable than femotocells in both corporate and consumer households because so much other data is transmitted via Wi-Fi. That makes offering converged services easier. It will also be a key to getting people to switch from the cellular network to a Wi-Fi one. Cost might be a factor, but with free mobile-to-mobile minutes and new unlimited voice plans, Fry thinks other incentives will be necessary.

Given that many of the big chip manufacturers such as Qualcomm and Texas Instruments have failed to get excited about femotocells, it begs the question of how large a market it will be.

22 Responses to “Femtocells or Wi-Fi? That is the Question”

  1. While most of the debate has been about handsets, it is worth noting that we collectively are on the edge of the adoption curve. For operators targeting the mass market, ubiquity is a beautiful thing.

    While configuring SIP mobile clients and managing multiple networks/WEP keys on a phone is not impossible, my parents will struggle with the idea (not to mention the implementation). The mobile operators could make it very straight forward.

    Finally, what’s in it for the operators? More minutes at massively reduced margins? or do it or die?

  2. Scott – T-Mobile’s UMA service really is a great fix to bad reception inside the home. Also, the battery drain really isn’t that bad… I’m on UMA probably 75% of the time and I still don’t recharge every day.

    Markus – From what I understand, WiFi-battery drainage is certainly getting better.

    I think the real hurdle before was getting the carriers to enable UMA, now they have every reason to do that so they lower network costs and make the most out of that unlimited plan (given it gets mass adoption). I think the price wars will compress margins to a point such that the unlimited plans no longer just target the high end consumers.

  3. Markus, you must have very old phones and batteries. I am running ((truphone)) all day on my NEW out of the BOX Nokia E51. It is not a particular large phone (small 6mm battery) but I get at least 2 – 3 days standy time being connected on WiFi on the home network, the office or at random places like coffee shops, trainstations, airports or hotels. I believe the first phones and firmwares or dual GSM / WiFi phones from Nokia had low battery times. I believe this is already fixed and will only get better. I am excited to benchmark the new N96 against the N95 8GB and the old N95 and then also benchmark the N95 Firmware 20.0 against N95 Firmware 1.0. Has somebody done the test?

  4. I’ve just moved over to a Blackberry Curve and UMA has nicely fixed the fact that TMobile barely works in the house. A week into UMA and a minute after reading the above, it’s now clear that the difference between a femtocell and a Wi-Fi access point is an arbitrary regulatory difference that will not persist.

  5. I’m not rooting for one over the other, but here are a few points to consider…

    How well are femtocells going to work in dense housing situations? Consider an apartment building where two neighbors each put a femtocell on opposite sides of the same wall. An RF nightmare. Is this really a good use of spectrum?

    Yes, Wifi has the battery drain problem, but I have confidence that 802.11m (or p or w or whatever) can fix that.

    Consumers have strong motivation to have wifi routers for other reasons. Their cost has already been driven down by volume.

    Femtocells can only succeed with carrier assistance. 3G-over-wifi can succeed either with or without.

    A few more points here:

  6. A. Handa is spot on – the issue with femtocells is that you require spectrum in order to operate them. Currently all of this spectrum is in the hands of the Mobile Network Operators (MNOs). WiFi has the huge advantage in that it utilizes license free spectrum – therefore any citizen can use the technology without having to pay a premium to the MNOs.

    What would really give femtocells a big boost would be the assignment of a small chunk of spectrum specifically for use by low power devices such as femtocells within buildings.

  7. Wifi drains the battery so much that it’s only for making phone calls, not to receive them. Don’t try to be connected all the time! Your call will drop when you receive one, because the battery is empty.

    A Truphone Wifi call from time to time is of course a very pleasant thing, especially when you are in a hotel abroad and can call home for free. :)

  8. The flat-rate plans makes putting WiFi on handsets an load-off instead of a liability for carriers. Without a flat-rate plan, as a carrier, its better for users to use their network so they can nickel and dime you for every bit of usage. With a flat-rate plan, they would rather you use your own broadband connection so they can keep their lower their network load. WiFi is definitely the way to go and it certainly makes FMC a lot more feasible both inside the home and at work.

  9. The main impediment to faster adoption of WiFi enabled solutions (UMA for one) has been the handsets. Their availability is still limited and the ones that are there mostly are a hog of battery time in the WiFi mode. The infrastructure gear is much further along. The ubiquity of 802.11 in the enterprise and residence cannot be argued. Femtocells on the other hand work with a larger spectrum of available handsets and provide a similar consumer experience. However, the infrastructure is still too nascent. The infrastructure is now in over 15 operator trials. Also to note that the current focus is on the femto in the home and not the enterprise. This may change over time. Does’nt the unlicensed WiFi have an edge over since Femtocells work with the licensed spectrum? Wireless 101 – who owns the spectrum calls the shots.