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T-Mobile sinks money into femtocells

Tiny cell vendor finds room for operator cash

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T-Mobile Ventures, the investment arm of the network operator, has announced a strategic investment in Ubiquisys, the femtocell manufacturer that already counts Google among its backers.

Neither company is saying how much is being invested, but they are saying "strategic" rather than "significant", and as Ubiquisys raised $25m only seven months ago it seems unlikely it's in desperate need of the cash. So this is more about T-Mobile's endorsement of the company and its technology.

Not that femtocells need endorsing at this point. Just about every operator is trialling the technology, and the first commercial deployments are slipping out. There is still work to be done integrating the IP infrastructure - used for the VoIP backhaul over ADSL lines - with the telecommunications network, which is what the trials are trying to hammer down.

Part of the attraction of femtocells is the way they transition mobile customers into broadband customers. No one in the UK is seriously planning to supply femtocells for use on someone else's broadband, though that will happen in some countries.

In the USA, the killer application has been coverage, for customers who don't get cellular at home. In Europe that's unlikely to interest punters who already enjoy ubiquitous coverage. The operators will save money on backhaul, but that's not going to sell femtocells to the customers, and it's hard to offer voice calls much cheaper than they are.

So in Europe femtocells are going to have to be sold as a data-enabling technology, which is why none of the European trials is bothering with 2G femtos (unlike the US deployment).

Operators are hoping free data at home will encourage users to take up all those services they've been trying to punt over the last decade or so - WAP browsing, etc - and those punters will then want the same services when they're out and about.

It could also see a lot of laptops switching off their Wi-Fi, when the inhouse femtocell provides all the functionality without having to change networks when travelling, which would please many operators. ®

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