With just one commercial 3G femto service in play, most Asian operators are content to stay on the sidelines
With the launch of Vodafone UK's service on July 1, femtocells have caught the industry's attention.
In Asia, while StarHub launched the world's first 3G femtocell service in Singapore last December, most carriers remain on the sidelines. NTT DoCoMo plans to launch a service in the fourth quarter, while Telecom NZ has trialed femtos.
At this early stage, and in the absence of any information from StarHub, it is difficult to measure progress.
But European analyst firm Berg Insight estimates femtocell shipments will grow at a compound annual growth rate (CAGR) of 127% to 12 million units worldwide in 2014.
Definition & business model
Femto cells are 3G/3.5G base stations installed in customers' homes either to improve in-home coverage, reduce network load and/or enable low-priced or value services via backhaul access through a broadband modem.
The attraction for consumers is the potential improved coverage and lower prices and the ability to use increasingly-clever mobile devices for fresh services in the home environment at little extra cost.
For operators, femtos offer competitive advantage and churn protection as well as the ability to offer richer services at competitive prices to home users.
Commercial rollout
Deploying: StarHub, NTT DoCoMo (Q4), Vodafone UK, Verizon Wireless, Sprint
Trialing: Telecom NZ, Chunghwa Telecom
Considering: Vodafone Australia, Vodafone NZ, Hutchison HK, SingTel, Optus, Telstra
Going its own way: SK Telecom (with WiBro femtos)
Pricing
StarHub: S$30 ($21) for Home Zone service, with free outgoing local SMS, voice and video calls.
Vodafone: Plans priced from ?5 ($25) a month. Also offering as a one-off purchase for ?60.
The vendor view
Shao Yang, vice president of wireless marketing, Huawei: "Huawei has deployed 38 commercial femtocell networks worldwide - more than any other telecom vendor - including StarHub's ground-breaking service in Singapore. It has also supplied PCCW and China Unicom.
"Femtocell products and solutions reached maturity in 2008 and will be commercialized on a large-scale throughout 2009 and 2010."
David Swift, a senior marketing manager, wireless networks, Alcatel-Lucent:
"Femtocell solutions benefit operators by enabling them to offload their mobile network by routing the data traffic directly to the internet. It benefits users with features like 'live collective intelligence' enabling them to access attractive in-home mobile services, such as media sharing.
"Alcatel-Lucent is the supplier to Vodafone UK, Europe's first commercial network. In Asia we are the supplier to Chunghwa Telecom in Taiwan. We have now two commercial femtocell network on-going deployments and more than 15 trials with other major operators."
The analyst view
On Vodafone's femto gateway service
Analysys
"We are not convinced that there is an upsurge in the number of customers who feel that their mobile reception is so bad that they are prepared to pay a one-off price of ?60, or an inclusive pricing plan of ?5 per month, for a femtocell... If the 'improved-voice' argument was the only advantage of the femtocell, then maybe Vodafone, like T-Mobile, would think very carefully before offering it to its customers.
"We believe that this announcement from Vodafone is not only about improving the quality of mobile voice, but also about gaining an advantage over the competition by preparing the path for mobile data."
Ovum
"Selling coverage that customers believe that they are already paying for comes with its own risks of a backlash if it is pushed too hard.
"Vodafone has also achieved something that both Sprint and Verizon Wireless failed to do: to give customers options. For the majority of users below the threshold, there is the option to pay a monthly fee of ?, ? or ?0 on top of their post-paid plan over 24, 18 or 12 months respectively.
"Finally, there is the opportunity for Vodafone to increase mobile usage while at the same time offloading traffic. We have said in the past that this looks the most likely model to succeed in the long term as, with sufficient penetration, the opex savings are considerable. However, femtocells are clearly not there yet."