So everyone went gaga about femtocell at the Mobile World Congress held in Barcelona couple of weeks back. It appeared everyone almost overwhelmingly accepted femtocell to be the next big thing in mobile communication. So first, what is a femtocell?
Femtocells are tiny 3G base stations that could allow cheaper calls in homes and businesses over mobiles by routing that signal over the fixed line broadband network. Hooked up to a home’s broadband-internet connection, femtocells provide solid indoor coverage and allow residents to make cheap calls using their existing handsets. Leave the house while chatting, and your call is automatically handed over to the wider mobile-phone network. The competing feature of femtocell is that it doesn’t need a dualmode handset that can take voice over wireless network as well as over wifi data network. A regular cell phone can take advantage of the 3G just like a regular cell call inside the home. The cheap conversion takes place past the miniature base station that routes the call through a data network originating from a cable or a DSL/ADSL modem.
Now, my question is, ‘Is Femtocell that disruptive a technology – or rather a disruptive innovation with a potential of changing the format of the industry?’ Well, this is definitely a convergence technology that just takes one step ahead of VOIP – a disruptive innovation that shook the conventional wisdom around voice communication. But what is Femtocell delivering? And to who? What is the WOW factor here? Well, the marketing engines of big cellular networks and other similar providers figured out that majority of voice calls are made from inside the building/house. So, if the voice traffic can be bypassed through the data route, that will significantly save cost and traffic bottleneck over the cellular networks during prime hours – thereby freeing up bandwidth for more data/media etc. Well, obviously something gotta give and that would be the data pipes. So high speed data channel is the key element for a successful FMC (Fixed Mobile Convergence). However, with WIMAX on the horizon, this convergence to fixed line may again end up a not-so-great innovation since the entire communication traffic will go over the WIMAX channel (wireless). Read some discussions below:
My final concern is the pricing structure of the FMC service along with Femtocell devices. For 2-4 phones accessing the base station, how will the service feature drive profit margin from the usage/hour/primetime aspect? Next, if the base station costs $100 a piece, will there be a model similar to VOIP service with free routers for a limited time contract? One other thing – if you have cell phone through VOIP technology, why need a home phone at all? BUT – ubiquity of the system will depend on the penetration of broadband service from the cable/telco/and other data connection providers.
The whole convergence concept is indeed very challenging and exciting!
Picture: Barcelona, Mobile Congress