T-Mobile USA has no plans to offer a femtocell and will continue to focus on its dual-mode WiFi fixed mobile convergence strategyat least that’s what we’re hearing from T-Mobile. A story from earlier this week reported that T-Mobile was launching a 3G femtocell later this year, joining the other three nationwide operators on the femto train. But a T-Mobile spokeswoman told Connected Planet that although the operator is always weighing alternate in-home coverage solutions, it has not made any decision to pursue femtocells and certainly has no plans to sell one in 2011.
T-Mobile is actually in an interesting position when it comes to femtocells. By choosing WiFi as its home coverage extension technology, it at first appeared to have missed out on the big femto boom. But the in-home base stations haven’t exactly been a resounding success in the U.S. None of the Big 3 report numbers on how many femtocells are in service. In fact, none of those operators have said much at all about femtos since they’ve launched their initial programs.
Studies from ABI Research and the Femto Forum show there is latent demand for femtocells in the U.S.though awareness of the technology is still low. Part of the issue is marketing, which the operators have done little of, but another big factor is pricing. Operators are either charging high prices for femtocells or monthly service plans to use themsometimes bothwhich discourages many customers from using them. What’s more, there have been numerous reports of operators simply giving femtocells to their most valuable customers to dissuade them from fleeing to their competitors.
From T-Mobile’s perspective, femtocell might not be worth the bother, at least until the fundamental business model behind them changes (Here’s our take on how that business model needs to evolve).
In comparison, T-Mobile’s actually got a pretty good thing going with WiFi, which targets the same customer segments as femtocells with a lot less hassle over equipment and provisioning. That wasn’t true a few years ago, but we weren’t in the midst of a smartphone revolution a few years ago. The customers most likely to shell out the investment or monthly service plan for a femtocell are the same customers who are willing to pay more on their monthly bills, and those customers are more likely than not to have smartphones. Those smartphones, almost without exception have WiFi, and customers who own smartphones are more likely than most to have home WiFi networks. Since T-Mobile has moved away from its strategy of shipping dedicated WiFi routers with its FMC software to tapping into off-the-shelf WiFi routers, provisioning FMC services has become all the more easier (at least easier than explaining to customers what a femtocell is, shipping it and installing it).
I’m not saying T-Mobile can ignore femtocells forever, but I don’t imagine, the way things stand now, that it is in any hurry to offer them.