Softbank to offer femtocells for free
Harnesses Ubiquisys' flexible Femto-Engine model to rework business model
Published: 30 June, 2010
As femtocells hit the mainstream, debate rages over whether carriers can get away with charging end users for the devices. With many expecting the products to be fully subsidized in the near future, pioneer Ubiquisys is working with Japan's Softbank on a roll-out that will support free femtos and still deliver strong ROI to the operator.
In most phase one deployments, the main consumer proposition is improved signal quality indoors, and some argue that the operator should be delivering that anyway, not charging extra for it. The challenge is to acquire the tiny base stations sufficiently cheaply to make 100% subsidies viable, and/or to add significant value beyond indoor coverage, in the form of homezone tariffs or new applications. In addition, the Femto Forum has published studies that show that the benefits to cellcos - from offloading data and signalling traffic from the overstretched macro network, plus improved customer experience resulting in reduced churn - offset higher subsidies. In most countries where femtos are available, there is only one operator providing them, but as competition steps up, the pressure to remove upfront charges for femtos will mount (customers of AT&T's 3G MicroCell offering can already get a free device if they are also subscribers to its other services).
Softbank, operating in one of the world's most competitive mobile economies, will now offer its femtocells free, complete with ADSL connections for residential, retail and small business customers. It also plans to accelerate the offload of data from its macro network, and boost usage/ARPU, by setting the femtos to open access mode, allowing all customers to access them and improving coverage and capacity.
This approach is enabled by the Ubiquisys Femto-Engine system, which consists of 'femto intelligence' software supporting key requirements such as self-organization and remote diagnostics. This software functionality is separated from the hardware, so that it can be licensed by third parties as well as running on Ubiquisys' own femto products. This model was introduced last year by the UK-based vendor, and it claims its new approach has enabled flexible approaches like Softbank's, and is reducing the cost of hardware to the point where 100% subsidies can still deliver profit. In particular, the related 'Engine-Ready' hardware program allows third parties to produce devices at low cost and time to market, by using complete hardware reference designs running the Femto-Engine software. This resulted recently in the G3-mini from SerComm, which achieved the much vaunted target of a sub-$100 femtocell.
"Making femtocells free to consumers has long been considered critical for widespread adoption," said Ubiquisys CEO Chris Gilbert in a statement. "Softbank Mobile's groundbreaking offer redefines the small cell business model and once again illustrates its position as a pioneer within the industry. Also by using the femtocells in 'open mode', allowing any subscribers to connect, it will significantly increase the operator's network capacity, benefitting all users."