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Feature: Cellular base stations for the home

Can 'femtocells' revolutionise home phone calls?

Paying for an entirely new device will be a tricky issue in the price-sensitive cellular business, according to In-Stat analyst Allen Nogee. Mobile operators already subsidise handsets and will be reluctant to take on the additional cost, he said. It may be hard to persuade subscribers to pay for something that essentially saves the carrier from having to build a better network and deliver the performance it promised in the first place, Nogee said.

There are also technical challenges to solve. One is interference: because femtocells use the same frequency as the macro cells that make up the ordinary cell network, they basically are competing networks, possibly numbering in the hundreds, surrounding one cell tower. That could hurt reception for callers both indoors and outdoors. And like other radio problems, it's still theoretical, Carlaw said.

"No one's ever going to know what it's like" until the femtocells are in place, he said.

Femtocells also need to have clocks precisely synchronised with the main cell towers, particularly for CDMA (Code-Division Multiple Access) networks, Nortel's Tong said. There is more work to be done on that problem, he said.

Standards could simplify matters and help femtocells proliferate, but they appear to be far off. The industry hasn't even settled on the basic method of making the femtocell talk to the operator's core network, InStat's Nogee said.

Nokia Siemens Networks last month announced it would make a network gateway to aggregate traffic from many femtocells but would leave the home-based devices to other vendors. Ultimately, the company wants to make its gateway work with almost any femtocell and take the technology to a standards body, said Timo Hyppola, head of indoor radio solutions at the network infrastructure maker. But for now, each vendor has to sit down with Nokia Siemens to make its own device work with the gateway, he said. Thomson SA has agreed to work with Nokia Siemens.

As long as carriers are the ones supplying femtocells to their subscribers, standardisation will be tough, InStat's Nogee believes. A carrier by itself has no incentive to make its femtocells work with any other mobile operator's system. But if equipment makers can get the technology integrated into broadband modems, which are sold at retail or provided by wireline carriers, that could change. With high volume and low cost, femtocells will proliferate until most households can afford one, he said. In-Stat expects 40.6 million femtocells to be in use worldwide by 2011, with 101.5 million individual users, a majority of them in Europe and Asia. Among US operators, Verizon Wireless and Sprint Nextel are exploring femtocells, he said. Neither carrier responded to requests for comment on the subject.

ABI's Carlaw also sees rapid growth, though not just around the corner. In 2012, vendors will ship 36 million femtocells and there will be an installed base of nearly 70 million of the devices, serving more than 150 million users, he predicted.


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