Vodafone

Femtocell deployment to test 4G pricing and ROI

Vodafone is planning to release the first European femtocell offering in about a week, using Alcatel-Lucent products. AT&T is also planning to expand its currently limited set of trials immediately, and to have a national offering in late 2009. The moves will be an important step in the evolution of femtocells, and may prove a trial balloon for the 4G deployment of femtocell technology that we’re hearing is an absolutely critical part of nearly everyone’s 4G plans.

With 4G deployment there is a need to manage total first-cost and at the same time give users a reasonable experience. Femtocells in each 4G home would give users an in-home experience with 4G as a baseline even if their own home area wasn’t yet covered by 4G cells, or was covered sparsely. If we see more with femtocells in 2009, we’ll also have a chance to see how carriers propose to price femtocell airtime: Will they discount it or make it free given that their network isn’t really being used? That will tell us a lot about whether femtocells will be a means of encouraging high-bit-rate applications at home where traffic won’t hurt the provider network, or whether providers will try to use femtocells only to get a better ROI by reducing the demand for true 4G cells.