For many femtocell industry participants, 2008 will be somewhat of a “block and tackle” year. A handful of carriers–Sprint most noticeably among them to date–are engaging in commercial adoption of femtocell technology, either to enhance coverage or capacity as the battle for telephony customers continues to be waged on the final frontier: the residence. Increasingly, industry participants think that 2008 is “the year” that serious carrier trials and deployments have to take place to carry forward momentum in the years ahead.

“We are seeing significant increases in the interest from equipment vendors, and there are several projects under way to build femtocells,” says Rick Pitz, Senior Product Manager and Business Development Manager at Certicom (www.certicom.com), an encryption and security tools developer that also builds UMA device software. “We take this to mean that the vendors are seeing enough interest from the carriers to warrant the investment in new developments…which is usually a sign that the market is getting ready to move.”

Rehan Jalil, President and CEO of WiChorus (www.wichorus. com), a developer of intelligent gateways for WiMAX and other mobility platforms, agrees. “There is clear evidence that there is momentum behind femtocells, especially on the 3G side in the early part of 2008…. WiMAX femtocells will probably get more traction in the later part of 2008 or in 2009.”

Femtos give a carrier the ability to service customers in their own home networks in a way that the “macro network” does not, in the opinion of Steve Shaw, Associate Vice President of Marketing at Kineto Wireless (www.kineto.com). “Femtos let you target services for the mobile phone user at home…. They make it easy for consumers to use the mobile device [at home] in ways that allow them to do other things.” Being in a “femto zone” at home, he believes, allows for mobile users to access “personal data services, social networking, and instant messaging.”

Some see inevitability; others see urgency. “There has been a lot of R&D investment, but the proof is in the pudding–real-world trials. It is critical that we see deployment in 2008,” says Michael McFarland, Senior Product Manager, CDMA, for Airvana (www.airvana.com). He sees the pressing need to get things rolling because they have to. The home is the last frontier for traditional mobile carriers, which need not only better coverage in residential markets. Some would argue that need for network coverage alone has prompted Sprint’s femto foray, but this isn’t exactly the point that a carrier wants to put across in marketing literature. As one industry pundit wisecracked, “You can’t get subscribers to pay because your coverage sucks.”

But more deployments also mean more scale, and scale means cheaper femtos, and with that, a fair chance at getting to the estimated 30 million units that some industry analysts predict will be in service by 2012. “To get WiFi router price points [under US$100] out of ‘collapsed’ femtocell base stations, they need to be sold in the volumes, and that’s going to take several generations,” notes McFarland, adding that for WiFi routers to get to their current costs, they needed roughly a half dozen generations. In other words, if the mobile industry doesn’t start deploying femtocells now, it will never get to the point where femtocells will make economic sense for carriers or the customers they are trying to reach.

But like many things in the “next-generation” industry, there is increasing evidence that this traction may be accelerated if femtocell technology can be deployed in multimedia or multi-service contexts. Using femtocells to provide support for data-hungry applications like IPTV backhaul, for instance, is seen by some as an additional “hook” into the triple/quadruple/multi-play home. “Femtocells as a cell tower replacement is not enough–there need to be additional services,” opines Aaron Sipper, Director of Product Marketing, NextPoint Networks (www.nextpointnetworks.com).

There is some debate as to whether femtocells themselves would serve as the carriage point for a lot of that traffic although most think that it will not be; rather, the femtocell will be combined with other technology to ensure that wireless traffic from the “outside world” gets routed onto a home network in the most cost- and spectrum-efficient way–but that the mobile device remains the core navigational tool for the consumer even when at home. “Adding multi-service capabilities when a subscriber is on a femtocell can be an incentive for consumers to adopt femtocells;” says Jalil, “however, femtocell [deployment] will primarily be driven by coverage requirements.”

That said, there is a little Swiss Army Knife movement in the industry. “I think putting a branded device in the home as well as creating a ‘home zone’ service offer is critical for operators going forward,” says Shaw. “Next-generation Home Zone 2.0 solutions based on WiFi or femtocells which use the public Internet to lower service delivery costs are key.”

“We are seeing a fair amount of interest in combining more and more functions into a single solution, [such as] a WiFi access point combined with a femtocell and a home router,” says Pitz. However, this is more driven by the desire of home network appliance vendors looking for an entry point by leveraging a “relationship” with femtocell connectivity than carriers looking to proactively extend their footprint into consumer’s gear. “The challenge right now is getting the price points down” for femtocells, as mentioned, to make economic sense for both consumers and carriers. “This is somewhat of a dichotomy…. Added services support makes products more attractive to consumers and generates more revenue [potentially] for the carrier–but that added functionality increases cost” when the industry is looking for femtocells to, above all, be a capacity-and-coverage enhancement that comes without cost. There is no denying, however, that multimedia services and multimode devices are accelerating the proliferation of connectivity- enabled devices in the consumer’s home, and this is only likely to increase. Samsung’s UBcell technology has “a data component and a means to control your TV and recorders,” observes Sipper. If femtocells do take off as an extension strategy, they will also be a more integral part of these multimode ecosystems, whether through carrier push or home network vendor pull. Could they then help carriers manage the multiple devices that their users are using to access services? For many in the industry, the answer is not really. Jalil sees a carrier’s femtocell strategy as being akin to any other access technology deployment. “The model of managing consumer’s personal devices is not widespread in other broadband data segments like cable and DSL with WiFi embedded gateways,” he says. ‘Femtocells don’t change anything significant.”

There is also the question of business strategy. “I’m not sure that carriers really want to manage the consumers’ products, nor do I believe that consumers want the carrier to have control over their equipment–until something breaks, that is,” believes Pitz, who acknowledges that this, however, is a challenge for the industry.

There may even be some more pragmatic reasons for this. “Operators are very protective of their licensed spectrum,” says Shaw. He doesn’t envision 3G spectrum as being the transmission medium for home networking, and indeed, “it’s hard to see it as anything other than mobile service…. Using femtocellenabled spectrum for home network management, you’d need UMTS between your TV and your DSLAM,” which he believes is unlikely. That said, he doesn’t doubt that carriers (and the vendors who love them) won’t be grouping all these various access channels into, in his words, “a ‘god-box’ to the home…but the frequency [for home networking] will be WiFi. You won’t be able to control your TiVo with UMTS” although your mobile phone could talk to the rest of the network when it gets home to make that switch.

“As more and more device types get deployed, users have a bigger task managing them,” and most consumers do not want to be their “own IT department…. One could make a good argument for buying everything from one vendor if that vendor had a good management infrastructure.” All in all, Pitz, like many in the industry, doesn’t see femtocells as being a definitive step into the carrier-managed home network. “Clearly, having a device in the home opens a potential portal, but the femtocell in and of itself doesn’t seem to be the solution.”

Others, such as McFarland, disagree. “Operators are concerned about the proliferation of devices that they have to manage…. Integrating femtocells [into home-access solutions] makes management sense.”

Beyond management of devices, there is also some debate as to what the platform will be that these multitudinous devices will share that will allow them to switch seamlessly over from the mobile network to the home network. UMA is seen by many (though not all) to be the key to the device-centered future of femtocells; the technology obviously originally got its start as the enabling fabric for a WiFi-centric path from the home to the core. In FMC’s second life, where the mobile network reaches all the way to the home, says Sipper, “UMA had to latch onto femtocell technology, even though it was built to deliver over WiFi…. Vendors say they can do femto as well as leveraging hotspots.”

At the end of the day, whether femtos are being used as a means for mobile-centric carriers to appropriate the home network space or simply as an enabler of a more seamless mobile-to-fixed transition experience, “the right strategy is flexibility. WiFi/cell dualmode base stations allow operators to converge the core,” according to Sipper. “They need to have a migration strategy which will allow them to first capture the base, then build a gateway model, and then offer service over a pure IP layer.” The end game in femtos, it appears, is one commonly recognized by everyone in the VON-osphere. V

Ross O’Brien, our Asia/Pacific Editor, is a long-time telecom analyst, consultant, writer, and speaker who regularly appears on CNBC and CNN. He is headquartered in Hong Kong. You can reach him at robrien@vonmag.com.