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Femtocells to Accelerate Wireline Substitution?
01 Jul, 2008
Several blogs, including Boy Genius Report (BGR) and Engadget are reporting that Sprint intends to launch their version of femtocell service nationwide sometime this month. Sprint has been trialing femtocell technology in Denver and Indianapolis. Sprint’s femtocell product, Airave, sets up a mini cell tower in a subscriber’s home and utilizes the subscriber’s home broadband service as the transport medium into the core network. Femtocells are seen as a potentially disruptive force on the competitive landscape because in theory, they’ll provide better in home coverage for wireless calls. That better in-home coverage may provide enough ammunition for customers who saw poor in-home coverage as a reason not to cut their home wireline service, to go ahead and cut it now.
Sprint will sell the Airave for $99 and tack on an additional $15/month or $30/month depending on the existing wireless plan (individual vs. family, etc.), providing unlimited calls through the Airave. BGR reports that Sprint femtocell service may only be available to customers who subscribe to an unlimited wireless plan. Unlike similar products from T-Mobile, Sprint’s Airave does not utilize Wi-Fi. Rather it uses the CDMA technology present in all of its handsets, meaning any existing Sprint customer will be able to use an Airave, not just the ones with a Wi-Fi enabled handset.
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googleI’m surprised there
I’m surprised there hasn’t been more outcry from broadband service providers yet, as this potentially means that ILECs & cable MSOs will also lose wireless backhaul revenue and will have to shoulder the burden of carrying wireless carrier’s traffic without any compensation from the wireless carrier. Eventually, wireless carriers could expand their footprint without spending a dime on tower build-outs or backhaul circuits.
Femtocells are a cool idea, but expect a lot of litigation and attention at the FCC as broadband carriers figure out they're going to haul another carrier's traffic for free and lose a lot of revenue.
Will consumers jump on the Femtocell bandwagon? Maybe, but maybe not. Is it better to have a $30 monthly broadband bill plus a $99 all inclusive wireless plan plus a $15-$30 femtocell versus a $20 landline? Perhaps for some, but not for everyone, especially if your neighbor is footing the bill for the femtocell and you can go with the cheap wireless plan with the same wireless carrier.
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Of all the wireless developments to watch, femtocells is the most important. It combines VoIP with wireless, and may be a deadly combination for ilecs. Maybe not what Sprint is doing, but if femtocells work out, and become easy to use, low cost, the quality is there, and most wireless carriers begin to sell them, ilecs are in trouble. Imagine the prospect of a person buying wireless service and the wireless carrier saying you can cut your wireline service for an extra $10 a month? Oh, btw, we've got your in-home coverage issue fixed.