Analysts: Femtocells, not F/MC, are the Future

Updated: Wi-Fi/cellular dual-mode phones are appearing, but likely will be eclipsed by mini home base stations.

By Eric Griffith | Posted Jun 14, 2007
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If you don't have mobile phone service that reaches your home or office, and you can't stand those old-fashioned, standard POTS phones, carriers will soon be offering you a couple of choices.

One option is to support fixed/mobile convergence, where the handset is equipped to connect both as circuit-switched cellular and as VoIP, by means of Wi-Fi (wireless LAN). Dual-mode have started appearing and are expected to be arriving in large numbers later this year.

The other is to put a gizmo called a femtocell in the dead-spot location. Femtocells are like Wi-Fi access points that communicate with the phone using cellular protocols instead of Wi-Fi, but convert the voice stream to IP and transmit it over your broadband connection.

ABI Research says that of the two choices, F/MC has an early lead, but that’s not likely to continue. ABI anticipates that the subscriber level for femtocells—A.K.A. "access point/mini home base stations"—will catch up to F/MC by mid-2010, after which deployment of femtocells will skyrocket. [Corrected 6/15/2007] Even a company prominent in the F/MC world, Kineto Wireless, developer of the UMA technology used by some carriers for F/MC, says UMA is a perfect backhaul technology to power femtocells.

Right now, F/MC in the consumer market is limited in the U.S. to T-Mobile; there's more competition in Europe, where Orange, BT and others are giving it a try. But right now, ABI says Vodafone, SFR, Softbank and Sprint are all exploring their femtocell options. "With their ability to work with any handset, and their potential for encouraging high data use, femtocells are very attractive when compared to VCC (Voice Call Continuity) and UMA-based Wi-Fi services," says ABI research director Stuart Carlaw.

In-Stat recently did a survey and found that half of the early adopters they talked to want Wi-Fi in their next cell phone. The Wi-Fi Alliance will have 100 models of F/MC phones certified by the end of 2007. Of course, not all of those phones will work in the same way. Consumers will likely need phones supporting the UMA technology used by many carriers, and probably the majority of the phones will support technology like SIP, which allows for Wi-Fi calls over a digital IP PBX—in other words, a more controlled environment, like a carpeted enterprise. In-Stat thinks issues like battery life in dual-mode handsets will be fixed in many of the models coming out this year.

What's lurking in the distance? WiMAX, of course. Parks Associates said last month that the mobile version of the tech will be responsible for 8 percent of all mobile broadband in the world by 2012, about 88 million users, and you can bet by then that "4G" tech will be found in many a phone.

Adapted from Wi-Fi Planet.com.

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