Femtocells Are Great, but the Payment Model is Backwards

att-femtocellSorry for the mini-rant here, but I still don’t get the appeal of femtocells. These are the “mini cell tower” devices offered by carriers in order to provide good signal coverage at home for your cellular phone. Today, AT&T became the last of the big four U.S. carriers to offer such a device (at least in a limited trial) and Engadget Mobile says customers will pay $19.95 a month for unlimited calling through the femtocell. Sounds great, right? Let’s dig a little deeper into what a femtocell actually does before you sign up for a monthly commitment.

The hardware does indeed blanket your home with better coverage on your handset. But that’s just for the network traffic between your handset and the femtocell — it doesn’t magically alter the wireless cellular signal from the femtocell to the nearest cell tower. So how then, does the femtocell enhance your phone coverage? It does it over broadband, which you have to provide and pay for. The femtocell routes traffic through your home Internet connection to give you better voice, and potentially, data coverage at home. I’m not questioning the value or need of such a device, especially since we cut our landline cord a few months ago. Ultimately, we need solid cellphone coverage in our house. The problem is that the business model is skewed far more towards the carrier. How so?

Essentially, you need a femtocell in the home because the carrier that provides you service simply can’t cover that service in your house. Instead of the expense to add another cellular tower nearby, they’re offering you a mini-tower, which takes network traffic off of their network. Put another way – you’re paying the carrier extra money each month because they can’t provide you service that you’re already paying for. They benefit from the decreased traffic on the rest of their network. I’ve said it before and I’ll say it again — instead of charging consumers $5, $10 or $20 a month for femtocell use, they should instead be crediting customers that amount to help with their coverage and network issues.

Update: I see Gizmodo agrees with my rant, although they use slightly more colorful language. ;)


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