Femtocells Get Out of Our Homes and Into Our Cities

Picochip today said it has released a chip that will enable mobile operators to place small base stations known as femtocells anywhere, bringing them out of the home environment and into public areas like parking garages surrounding a busy shopping area or on an enterprise campus. Femtocells help ensure better cell phone coverage in hard-to-cover areas, such as indoors or in hilly or urban terrain, so they could mean a better iPhone (s aapl) connection, but they may also mean that the era of widespread Wi-Fi supplied by carriers could end.

We at GigaOM have long argued that femtocells, which act as a mini cell tower and connect through a home’s existing broadband connection, are expensive for the carrier to deploy and currently expensive for consumers to pay for in their homes. With more phones coming with Wi-Fi, which many homes already have, femtocells won’t improve mobile Internet access, but could improve voice calls. However, femtocells are compelling, because they could help carriers serve more mobile phones in an area without needing more spectrum. From an earlier story I wrote on these chips:

However, if Picochip’s beefed-up chips can help femtocells support more users, they could become an attractive solution for larger campuses, and perhaps public places such as Times Square or a train station. They might also help improve the overall network for operators by taking signaling traffic off congested towers in urban areas. Chetan Sharma, a wireless analyst, issued a report this week noting that network congestion is generally caused by two big issues: (1) signaling traffic caused by smartphones and superphones and (2) peak data traffic caused by data cards and embedded laptops. He writes that signaling traffic is growing faster than raw data traffic because smartphones are not very efficient with applications.

The danger here is that with more capable femtocells, and an ability to reuse their spectrum in congested areas, carriers lose their incentive for deploying Wi-Fi networks to offload data and will shunt customers back over to 3G networks (right now, these Picochip radios are for HSPA networks, not the coming Long Term Evolution networks), which generate more money and provide carriers with more control over the applications that run over the network. For users, it would mean higher data costs and, depending on how the net neutrality debate pans out, a different version of the Internet.

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