Femtocells for the masses: Carrier support for devices bolstering space

With three of the four largest wireless providers in the United States selling femtocells to boost indoor coverage, and the fourth expected to join the party, a Massachusetts company is banking millions that the technology will take off.
Verizon Wireless was the most recent to announce its Network Extender base station for $250. Verizon Wireless customers can buy the units online, by phone or at select stores. Verizon Wireless joins Sprint Nextel Corp., which launched its Airave device last year and T-Mobile USA Inc., which offers an in-home Wi-Fi router that allows customers to place calls using its broadband network over select T-Mobile USA devices. Sprint and Verizon use Samsung femtocells.
AT&T Mobility is expected to follow suit this year with its 3G MicroCell. The company would not say whose base station will be used for its service. The carriers are offering the technology to boost coverage inside homes where location or structures may interfere with wireless signals.
With the major carriers offering the technology to their subscribers, officials with Airvana Inc. see the development as a positive step in the femtocell market. However, millions of mass deployments may not happen anytime soon until pricing for chipsets decrease and distribution and regulatory issues are dealt with.
“All of our new products are focused on the femtocell market,” said Paul Callahan, VP of corporate development at Airvana. “It’s a big bet.”
Last year, Airvana teamed up with Hitachi Communications Technologies Ltd. to supply base stations. The company has also partnered with infrastructure companies by signing agreements with Alcatel-Lucent, Nokia Siemens Networks and Motorola Inc.
The company also has different strategies for the two network technologies.
For CDMA, the company is relying on its relationships with Hitachi, Motorola and Alcatel-Lucent to get its femtocell out to the market. Callahan said its relationship with Hitachi is geared toward deploying a Japanese carrier deploying a femtocell base station.
On the GSM/UMTS side, the company is planning to enter the market on the technological side with NSN, which has developed a Femto Gateway. The company plans to provide the femtocell to NSN’s gateway.
For the GSM/UMTS market, Airvana faces stiff competition from Ericsson AB and RadioFrame Networks, which has the financial backing of Clearwire Corp., founder Craig McCaw. RadioFrame has developed a base station with its own chip.
According to ABI Research, the femtocell market will gain traction this year and millions of deployments have been forecast for 2010.
However, officials with Aricent are not so sure widespread deployment is as close as forecast.
Sudhir Tangri, assistant VP of strategic marketing for the California company, said there are many questions that need to be answered before millions of femtocells are deployed.
“Is the industry ready for large-scale deployment? Not yet,” Tangri said. “Before any operator decides to do millions of deployments, there are regulatory and distribution issues that need to be sorted out.”
Another obstacle is price. Verizon Wireless’ price may attract early adopters who will pay the $250 for the base station, but the price is too high for mass deployment, Tangri said.
Base-station chipsets need to decrease from between $80 and $100 to between $30 and $50. If chipsets fall to that range, base stations could then sell at $100 or less, he noted.
Tangri said another issue that needs to be addressed is what happens to the femtocell base stations, which are geared for 3G networks, when carriers launch next-generation networks?
Tangri said mass deployments of femtocell base stations may coincide with carriers deploying LTE networks. Tangri said there is not a base station on the market that can migrate from 3G to LTE.