Reality Check | Ephraim Schwartz » Femtocells: the latest grab for your wallet from the carriers

February 29, 2008 | Comments: (0)

Femtocells: the latest grab for your wallet from the carriers

TAGS: None

I never stop being amazed at how unquestioning consumers and business buyers are, of course I include myself. It wouldn’t look good if I didn’t.

In high tech it is Microsoft or Oracle or SAP telling us that their platforms and applications are compatible with everyone else’s platforms and applications, with the caveat "but if you want really good compatibility and interoperability then you should buy our entire stack."

Okay, we say, "that sounds logical."

Or tell me what in a nutshell is the premise of cable TV other than some broadcast executive telling you, "oh you want good programming? You’ll have to pay for that." And then, "oh you want really good programming, you’ll have to pay more."

Yeah, we say, "well how else would I get to watch first run movies?"

Ggrrrrrr!

Now we have femtocells.

Sprint is the first carrier in the States to offer this new technology, basically a home cellular base station that plugs into a user’s broadband connection.

It promises great reliability and performance at home for cellular phones, voice and data, with no new phones required.

The femtocell comes preconfigured by your carrier. It will not, at present, work for two separate networks if you have cell phone subscribers at home subscribing to different carriers.

Sprint’s reasoning for why you need a femtocell sounds pretty familiar to me by now.

"Oh you want good service where you can hear a pin drop, become a Sprint subscriber." And now, "Oh you want really good service at home, too? Why didn’t you say so, then buy a femtocell for $50 and subscribe for $15 per month or $30 per month for the entire family."

Don’t believe me? Here’s a few choice lines from their own press release announcing the service.

Sprint customers can "get enhanced coverage in their homes."

Enhanced actually means decent service. The kind of service you should expect for all the money you are paying them.

Customers can also "talk all they want while in their homes, without worrying about using their wireless minutes."

Well yeah, you’re paying $15 to $30 per month plus $50 for the femtocell, why would they charge for additional minutes?

So if you’re willing to remain unquestioning, and or you hold your nose and open your wallet a femtocell may indeed be a good solution for having decent indoor cell phone service.

The business case for femtocells is that it offloads traffic from the carriers core network and reduces the necessity for the carriers to upgrade their infrastructure to increase capacity for their entire network.

After all, why should they pay for that when with a good marketing campaign they can make you, the consumer, pay for it.

If Sprint and the other carriers are savvy enough in marketing these units consumers without a femtocell will be considered losers and femtocell users will walk around with their nose up in the air because they are part of the "techno cognoscenti."

But big companies aren’t always as unquestioning as the public.

If the telcos are upset about Google increasing traffic on their network wait till they look at this service, says Peter Jarich , research director at Current Analysis.

So what has yet to rear its ugly head is the backhaul service providers like Comcast, AT&T, and Verizon questioning why Sprint should be able to increase its traffic by plugging into their network for nothing?

Now to be fair there are benefits to be had from femtocell technology. But who says I have to be fair?

Actually, rather than risk boring readers to death I’ll cut this blog off at this point and save the benefits of femtocell for my next blog.

In the meantime, femtocell users--Sprint is partially rolling it out in two cities under the name Airave, in Denver and Indianapolis -- can send in their comments on their experience with the technology or if those who think I’m not being fair care to write in, be my guest.

Posted by Ephraim Schwartz on February 29, 2008 01:31 PM

RATE THIS ARTICLE: