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September 19, 2007

Femtocells, Finally! Sprint Rolls out Samsung Device

By Glenn Fleishman

The first commercial rollout of an in-home cell-to-broadband gateway comes from Sprint: Sprint sold its landline business, and thus they have more motivation to get cell callers to move their dollars from wire to wireless. Reports are that they’re offering a limited rollout of a Samsung femtocell, a tiny cell base station that uses licensed frequencies, with a connection to a consumer’s broadband Internet service. The markets covered are Denver and Indianapolis.

Femtocells differ from unlicensed mobile access (UMA), in that UMA uses, well, unlicensed 2.4 GHz bandwidth; femtocells using licensed frequencies can push out higher-powered signals and have no competition for the bandwidth. Further, femtocells can work with any existing handset; UMA requires new handsets that combine cell (GSM only at this point) and Wi-Fi or Bluetooth. That’s not as big a deal as it used to be, with nearly 100 handsets in production or in the  market that match Wi-Fi with cell.

The service costs $50 for the device and $15 per month for unlimited local and U.S. calling. It’s called an Airave, and won’t hit nationally until 2008. Femtocells have to account for the part of the country in which they operate as each carrier owns a specific set of spectrum licenses in each geographic area. Any Sprint handset can work with the femtocell.

The cost of femtocells is estimated to be in the hundreds of dollars, making the subsidized $50 price seem rather low. But Alan Nogee of In-State is quoted with an excellent observation in this PC World article: he notes that because most home calling falls into the free weekend/evening minute category anyway, cell carriers aren’t making additional revenue. He didn’t note, too, that if you have a large minute plan, the carriers would prefer you use fewer minutes until you run over when they’d rather you pay lots of overages.

Thus, any minute pulled from a pool that’s then not used or any minute that would have been carried for free as part of a weekend/evening plan that is now part of an additional $15/month in revenue is a savings in cell carriage and an increase in revenue from the monthly fee. I like it. It also keeps people loyal to Sprint.

With UMA, depending on the network, customers can get no-minutes-used calling at hotspots, which isn’t an option with femtocells.

I’ve been dubious about femtocells because their availability is always next year or the year after, no matter how many years back you talk about them. The cost remains high, and it’s got a fixed-location utility. T-Mobile can use UMA to give people free calls at 8,500 locations in the U.S. in addition to home. Sprint can give people…better reception at home. So we’ll see if the quality issue combined with a Vonage-like pricing plan is enough to get people to give up landlines. Since people still need broadband, which is often coupled or bundled with landline or voice service, there’s a question there about whether femtocells are thus compelling enough, too, to replace that.

Posted by Glennf at September 19, 2007 10:00 PM

Categories: Femtocells, UMA

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