Femtos held back by standards hurdles

There is still a frenzy of activity taking place in the femtocell space, and a lot of debate too. Research released this week suggests that femto technology may carve itself a niche in the long term, but in the short term, analysts remain sceptical.

Japanese operator Softbank recently came forward to claim first mover advantage as the first carrier to deploy 3G femtocells. Softbank joins US carrier Sprint, which was the first company to deploy commercial voice only femtos. But analysts say the time is not yet right for operators to consider deploying femtocell technology on a wide scale.

“In general we would advise operators to hold back on deploying femtocells until standards-based equipment becomes available, unless the need to be particularly disruptive in the market is their overarching market strategy,” said Steven Hartley, senior analyst with research firm Ovum.

Hartley believes that until standards-based kit is available, Softbank and Sprint’s end user devices will be saddled with uncompetitive pricing without heavy subsidy. There is also a greater risk of technical implementation issues, and resulting customer problems.

Ovum notes that the time needed to iron out the standardisation process is already causing operators to hold back on their plans until the situation is clarified, which may not be until next year. And most operators will refuse to move on femtocells until they have cheap equipment that is easily integrated into their existing network, which Ovum forecasts as being available at the end of 2009 at the earliest.

But standards are not the only issues causing delays. Hartley notes that both quality of service guarantees over broadband and the regulatory situation remain unclear and the devices themselves are currently the victim of a ‘chicken and egg’ situation.

“The technology and costs are not where they need to be to make them attractive mass-market consumer propositions, but until volume orders are placed the costs cannot fall to make them a mass-market proposition. Until that cycle is broken, femtocells will remain a niche solution,” he said.