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Telstra dropkicks femtocell business model

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MWC Australia's biggest network operator has rejected the business model behind domestic femtocells, claiming the technology is already redundant, though not everyone agrees.

Speaking at Mobile World Congress, Telstra's CTO Hugh Bradlow explained that the basic premise of modern femtocells – offloading data traffic from the operator's radio network – had been rendered redundant by the wide scale adoption of Wi-Fi. With Wi-Fi providing in-home connectivity for laptops, tablets and handsets, the operator has nothing to offload. Some might argue that operators would prefer to be bothered if it means staying in touch with their customers, but not Telstra.

The primary application of femtocells – tiny base stations that piggyback on the customers' internet connection to provide mobile coverage – is still to provide connect voice calls, but as mobile becomes a data business, so femtocells are looking to offload data back haul to reduce costs for the operator rather than increase coverage for the customer. Cisco reckons that a once a customer is consuming more than 1.6GB of data in a month, it becomes economical for the operator to give them a free femtocell, to avoid having to carry that data.

But not according to Telstra, which reckons that consumers have already bought their own Wi-Fi access points and as most devices default to Wi-Fi then not much of the in-home data consumption is going to end up being carried over the femtocell anyway.

Data offload isn't the only thing femtocells can do – the femto forum is keen to promote location-based services of limited value, and some innovative ideas such as integrated Wi-Fi/femtocell functionality – taking advantage of the security of femtocells for HTTPS connections, and the increased simplicity of Wi-Fi for media-streaming and such. But those are trimmings which might be nice to have but are not going to drive adoption.

Operators are getting more interested in value added services, optimising content for mobile and/or dropping “promotional messages“ into the data stream, which becomes impossible over Wi-Fi, but that's still at the experimental stage and very dependent on customer reactions.

Femtocells are having some success with network operators, who are busy deploying them in shopping and conference centres (including one or two covering the Fira, the venue for Mobile World Congress) and even outdoors. Taking advantage of the IP back haul and self-configuring nature of the femtocell to reduce installation costs, rather than letting consumers plug them in themselves.

The killer application for the femtocell is still providing voice coverage, and that will remain the case for a long time. At one point it really looked as though femtocells could take on home Wi-Fi as the connectivity of choice, but that time may now be past – and Telstra might not be the last operator to decide its customers don't need tiny base stations in their living rooms. ®

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