4- What is the right Business Model for Telecom Service Providers to profit from Femtocells?

First to clarify, a Femtocell is, a wireless access point, a small device attached to a home broadband network router (DSL or cable) in order to increase significantly quality and coverage of your wireless/cellular network for your mobile devices around your home (or small business).  

Femtocell for your Home !

 

Femtocell technology is proven and has been on the market for some time, with high expectations and little success until now, and not much better short term forecast. It seems Service Providers are not convinced on the value of using and selling it, and Users are not willing to pay for it, so demand is low.  

However, in my view Femtocell adoption should be a win-win:  

–          Better coverage & performance, improved customer experience for the consumer, and eventually new services and affordable pricing options  

–          Incremental revenue, improved customer service & experience, reduced churn, reduced cost to deliver mobile data & traffic, competitive advantage, increased profitability for the Service Provider.  

So why are we not there yet? It really is  a question of finding the right business model and marketing messaging.  

It seems the best option is for the Service Provider to give them away to their customers.  

AT&T MicroCell femtocell business model is not working, with the MicroCell device being offered at $150 one time fee, femtocell traffic being billed against broadband caps, and customers complaining to have to pay for leak of AT&T’s network coverage and service.  

But times are changing, and East is moving faster it seems, as Softbank Mobile and Ubiquisys just announced July 1st, they will provide in Japan the Femtocell Hub and its required broadband service access (DSL) for FREE to the consumers, residential, retails or small businesses. And in return, the user will have to share the link with others users of the mobile service.  

“The SOFTBANK MOBILE femtocells will be set to open access mode, meaning all customers will be able to access the devices, increasing coverage for all, offloading traffic from the macro network and adding network capacity.”  

I believe this is the right move and Business Model, and I expect others Service Providers to embrace it, sooner or later, all or in part, for everyone’s benefit.  

If you believe in a better business model, now is the time to share it with us !

2 Responses

  1. Additional information: watch the first part of this video discussion on TelecomTV offering an interesting & innovative solution to market femtocells : “Femtos and the possible solution of network collaboration”
    http://bit.ly/dqlTZa

  2. Additional information: “What are Femtocells?” (video)..

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