Vodafone revs up UK femtocell program

by Caroline Gabriel, Rethink Wireless

Last June, Vodafone UK became the first European operator to go live with femtocells, though the indoor base stations remained somewhat shadowy in the carrier’s portfolio. Now it is bringing them out into the marketing daylight with a rebranding and a price cut.

The device, originally called the Vodafone Access Gateway, is now more snappily named the Sure Signal. This reflects the initial focus of the cellco’s marketing of the product, the promise of improved indoor 3G coverage and signal quality. Mobile operators are looking for many benefits from their femtocell investments – some consumer driven, such as new apps and homezone tariffs; some geared to their own economics, such as offload of traffic from the macro networks to devices backhauled by the user’ own broadband lines.

But in the first stage, as successfully demonstrated by the US carriers, the most readily understood, and urgently needed, benefit is indoor penetration. In October, a survey of UK mobile users by ADC found that 27.6% of respondents believed their work had suffered because of weak cellphone reception indoors at home or the office.

The Sure Signal will now be promoted and sold more aggressively, said one Vodafone insider, and the pricing has been made keener to match. It will now cost just £50 ($81), down from £160. Consumers can also opt to pay £5 a month for a year to get the femtocell, if they are on contracts of more than £25 a month; or for two years if their deals are worth less than that. One of the dilemmas for carriers is whether they can charge for femtocells, or need to offer them 100% subsidized in order to boost uptake and gain the benefits of data offload. So far Vodafone is pursuing something of a middle road, despite complaints from some consumers that they should not have to pay to compensate for an operator’s poor coverage.

Various reasons can be deduced for the timing of the stepped-up push behind the femtocell. Vodafone has managed to convert its back office system to allow for automatic provisioning of the devices – seen by other early adopters, such as AT&T, as an essential condition for volume adoption. Its supplier SFR is understood to have ramped up its manufacturing output considerably this quarter. And of course, Vodafone UK will launch the iPhone this week – the handset has famously put strain on the network of its previously exclusive UK carrier, O2, and femtocells will be one way to ensure data-centric smartphone customers get a high quality experience, indoors at least.
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