Shayan Sanyal Shayan Sanyal Chief Marketing Officer - Bluwan

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The Age of Femtocells, or how Consumers Should get Revenue Sharing for In-house Roaming

  • Let me preface this post by saying that my wife and I 'cut the cord' a few years ago. We haven’t had a POTS (plain old telephony service) line since 2005, around the time we moved to the Silicon Valley. Instead, I was very happy using a pretty fast cable broadband connection (Comcast straight up, no triple play bundle), and my Verizon Wireless service for all telephony needs (using VZW’s EVDO service at the time).

    When I moved to London last year, we took the same approach: a 50 Mbps best effort connection with Virgin Media, with Vodafone as our wireless provider. At the time, we had relatively no issues, apart from spotty 3G coverage at the back of the flat, which we were ok with, as we were offloading the data to Wifi anyway.

    I recently moved to a flat in Shoreditch, and much to my dismay, I discovered that Vodafone's coverage in our area is pretty shoddy, to say the least. No 3G or even EDGE data coverage, and mostly no coverage at all (2G or 3G).


    Indeed, as you can see, there’s very little macro-cell presence from VF in my area (although it does look like I should switch to T-Mobile). The nearest is about 800m away.


    Vodafone's SureSignal solution is a femtocell designed to provide coverage using your home broadband connection

     In any case, I decided to call up Vodafone to see what could be done. I explained the situation to the customer care rep, who basically explained to me that Vodafone had a new product, Vodafone SureSignal, that costs 50£, which would help me ensure I get proper coverage inside my new home. The SureSignal product is essentially a consumer femtocell. For those of you who don’t know what this, a femtocell, or ‘femto’ (pronounced femtō) is a mini cellular base station, designed for in-home or SoHo use, which connects to your home broadband connection and typically supports 3-4 customers in residential mode. These types of products are increasingly showing up on operator product roadmaps, as a key component of their ‘data offloading’ strategy (increasing usage of WiFi hotspots is another). It’s also a sure fire way of using a customer’s fixed broadband service as a way to backhaul voice/data traffic locally, ensuring optimal coverage. Sounds awesome, right? On the surface, yes, especially if like me, you’re struggling with mobile coverage. However, I have some issues with the commercial aspects of all of this.


    The first is that when I sign a mobile contract, I expect coverage. We’re in 2011, and it’s not like I live in the sticks. What an unpleasant surprise to realise I actually live in a ‘not spot’ area! And the irony is excruciating, especially given that my day job at Bluwan is all about making sure that mobile operators have enough backhaul capacity to provide stellar and high bandwidth mobile broadband coverage in metro, suburban and rural areas. If I don’t have bandwidth and coverage where I live, why should I continue paying for my subscription? I should be able to legitimately churn and migrate to the service provider with the best coverage in my area, in this case, T-Mobile. However, in the UK, I’d have to pay an early termination clause (in my case, 160£!!!). I’m seriously sympathising with the folks at #finalthirdfirst

    Second, if you’re going to pitch me a “femto” to improve coverage in my area, for heaven’s sake, look at my ARPU, my customer lifetime spend projections, and apply some basic customer experience management to provide the femto for free. Heck, it should be free for all! The worst is telling me that it’s going to cost me 50 quid straight up to fix a problem that really should be fixed by you, the service provider, using more cell sites, better site planning, and more importantly, higher bandwidth backhaul. [update: Vodafone gave me a £20 discount after I complained that this was terrible customer service]

    Some will say that maybe I’m being too harsh. When I first tweeted about this, I was told that I should be grateful that at least, my provider had a solution to my coverage problem. Apparently, 3 doesn’t have a femtocell offer. I guess that I have a different take on what the word ‘service’ means in ‘service provider’. At the end of the day, I fully understand the total cost of ownership implications involved in providing high bandwidth coverage to 100% of a given area. The cost of increasing network capacity is rising; fibre is not being deployed to every base station for financial reasons; traditional point to point microwave links, faced with increase cell site density, are suffering from spectrum congestion on the one hand, and increasing OPEX costs on the other... and to top it off, the demand for mobile data capacity is shooting through the roof. 

    However, I’m not sure that offloading the cost of coverage to the consumer is the right way to go; and I’m not the only one who thinks this way. Nick Broughall, from Gizmodo Australia, states that it does seem ‘a bit rich’ to pay $120 AUD on top of your monthly plan to fix a defect in the network. Adam Frucci, from Gizmodo US, goes a step further, asking himself “How little regard for your customers do you have to have to offer a product that fixes your own product for an additional fee every month?”, which leads me to point number 3:

    Why should I pay Vodafone to offload their network using my own fixed broadband service, for which I pay a steep £38.50 / month with Virgin Media? Should I not be receiving money from Vodafone instead for the privilege of leveraging my “in-house backhaul infrastructure”, thereby reducing the stress on their network, and helping to postpone their decision to add another cell site, saving them a ton of CAPEX budget? This is not much different than roaming agreements, except on a much smaller and individualised scale. Essentially, when I enter my home, I’m ‘roaming’ on my fixed broadband network. Should I not be receiving some form of compensation for this? 

    To conclude, I’m really glad that Vodafone doesn’t charge a monthly service fee for the usage of their SureSignal product. I’m also pretty happy with the results, in that I now have full coverage inside my home for voice and data (I’m still using Wifi for data... as I don’t want to hit my daily bandwidth cap on 3G... oooooh the irony!). I’m not happy that service providers believe they can get away with the double whammy of charging customers for fixing their network issues, and ‘offloading’ the heavy lifting to their customer’s ISP. Rather, they should maybe look at providing usage ‘credits’ on the monthly bill, much like the solar panels / electricity provider energy credit deals that we see in California, for example.

    Ultimately, it’s clear to me that service providers should seriously start looking at scalable, multi-gigabit backhaul solutions with very low CAPEX and OPEX footprints. This is especially true considering the increase in cell site density we are going to see over the next few years with the advent of Long Term Evolution. What’s the point of having a great radio access technology, and all these cool devices, if at the end of the day, adoption is slowed down by nickel and diming customers using chargeable femtocells ?


    Food for thought, no ?

    Shayan Sanyal
    About Shayan Sanyal Shayan Sanyal works as Chief Marketing Officer at Bluwan
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  • Tony Poulos
    Tony Poulos I was involved in trials for Starhub's femtocells in Singapore three years ago and I have to say that it was a pretty positive experience. There were some early handoff issues when one left the femtocell range during a call but these were addressed pretty...  more
    19 April 2011
  • Shayan Sanyal
    Shayan Sanyal Hi Keith - I understand that economies of scale can affect initial pricing. I'm also really glad to see that some operators,e.g. Softbank are making the right moves to increase adoption. Let's hope other operators in the US, UK, the rest of Europe start m...  more
    20 April 2011
  • Shayan Sanyal
    Shayan Sanyal Tony - spot on... that's what I'm hoping will be the strategy moving forward.
    20 April 2011
  • Ambika Pajjuri
    Ambika Pajjuri The technology works but due to the licensed spectrum, operators have taken their time to test the technology and the femto to macro handoff before rolling it out.

    I was managing the Femto product line for a company in the bay area and firmly beli...  more
    28 April 2011