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USA Femtocell Market Review January 2009 has seen a flurry of announcements about femtocell product launches in the US. Sprint has been offering its Airave femtocell since September 2008 and now Verizon Wireless has launched its Wireless Network Extender using the same underlying product. ATT Wireless, not to be outdone, has had a flurry of press activity around its so-called 3G microcell, which is still some months away from availability. We've looked at the overall picture, compared the various offerings and drawn some conclusions.

Femtocells available to buy in the US

The chart below shows what all the major operators are doing in this space. We’re not aware of any of the smaller US networks (e.g. US Cellular, Cricket ...) offering anything today, it’s the larger networks setting the pace. The scale of US operators is considerable – Verizon Wireless has some 78 million subscribers after acquiring AllTel earlier this month. These figures from 2008 show ARPU (Average Revenue per User per month) is much higher than in many other countries at around $50-$60. A few countries match this level including Sweden and Japan, but many countries have much larger networks with much smaller ARPU, partly because this includes a large segment of prepaid users.



T-Mobile (UMA WiFi)








Comcast (WiMAX)



Sep 2008

Jan 2009

Q3 2009 (estimate)

To be announced



Sprint licensed areas only

Verizon licensed areas only

ATT licensed areas only


Initial Purchase Price

$50-100 for each UMA capable phone



To be announced

To be announced

Ongoing price




To be announced

To be announced

Call benefits

Unlimited US calls from any accessible WiFi hotspot worldwide

None, but unlimited calling from your femtocell optional extra for $15/month (or $30/month for multiple phones)


To be announced

To be announced

Barring/ Allowing other users

Yes - Based on WiFi hotspot security

Yes – based on phone number

Yes – based on phone number

Yes – based on phone number

To be announced

Barring other users

WiFi hotspot menu + each phone config menu

Customer care

Web self service (or probably customer care)

Probably using web menu

To be announced


UMA only

Any Sprint

Any Verizon

Any 3G ATT















Yes (estimated up to 1Mbit/s)




Highly likely

Recent US Femtocell Announcements

T-Mobile was arguably first to market with a product allowing you to use your mobile phone on your own wireless hub, with HotSpot@Home. This isn’t a femtocell, instead using WiFi. It requires a special dual-mode phone – not all cellphones with WiFi support UMA, so the range is restricted. But in terms of functionality and end-user experience, it’s very similar to a femtocell. You can use the service anywhere you can gain access to WiFi (so either an open/unsecured WiFi access point, or one you have configured the security to allow). The service works anywhere there is WiFi, including abroad and areas where T-Mobile has no service.

Sprint soft-launched their Airave femtocell, supplied by Samsung, in two markets and after some success then extended this nationwide. Their pricing model discounts the initial price to $99, but requires an ongoing monthly fee. Calls made or received through airave to national numbers are free. Airave is a 2G device, in that it supports voice and SMS, but not 3G EV-DO data. It’s very much focussed on solving the coverage problem in areas where Sprint’s cell towers don’t reach. With Sprint losing customers at the rate of more a million every three months , there have been reports of customers about to leave being offered these free of charge and ongoing monthly fees to stay with the network.

Verizon launched its Wireless Network Extender in January 2009. They are using the same 2G femtocell as Sprint supplied by Samsung, so again a voice/SMS service only – despite Verizon having probably the best 3G coverage in the US. They’ve gone for a one-off price of $249 + tax, with neither discounted calls nor ongoing extra charges. In this way, they are directly competing with wireless repeater products – the benefit being much easier installation (plug and play), and access control over which phones can use the service. Some commentators have suggested the price has been set relatively high in order to slow down potential takeup, but it’s still much cheaper than many comparable RF repeater systems or high end smartphones.

ATT Wireless don’t have any femtocell product currently available, but their marketing department went into overdrive when Verizon’s was launched. Their 3G Microcell will support both voice and data – up to 7Mbit/s, so will also enable iPhone and other smartphone users to take advantage of blistering speeds when at home. You can argue that this may be irrelevant because the iPhone can use WiFi anyway, but I’m sure we’ll see a whole range of innovative iPhone applications working with the 3G Microcell when it becomes widely available. ATT are said to be running trials with friendly customers during Q2 and considering a national launch sometime in the Fall. They have run a vendor selection process and are thought to be running trials with at least Cisco (providing the complete box) containing an ip.access 3G Oyster femtocell module.

Comcast don’t own a wireless network, but have made substantial investment into Clearwire, the new WiMAX operator. They have been trialling WiMAX femtocells with a view to offering a package combining indoor and outdoor service. There has been little reported news of progress on this. Comcast wrote down $1 Billion of its Clearwire investment last year – not a good sign. Without good nationwide wireless coverage and a reasonable range of voice handsets, this service would be limited/focussed on laptops. You’d then have to ask, why would anyone NOT use their own existing WiFi when at home? A WiMAX femtocell makes little sense for data only. Recent announcements from Nokia and Nortel to halt their own WiMAX product investment hasn’t helped. This may help explain why mainstream femtocell vendors have shied away from spending much time and money on this technology until a worthwhile market size has developed.

Overall US femtocell market status

With indoor coverage solutions available from three of the four large network operators (Sprint, Verizon, T-Mobile), ATT has clearly indicated its intentions to launch later in 2009. There’s little doubt these products will be around for some time. The focus to date has been on addressing poor indoor coverage, with T-Mobile and Sprint offering unlimited calling packages as a bonus.

The US is ideal territory for a poor coverage solution – it has relatively high broadband penetration but poorer wireless coverage due to urban sprawl where there is generally a lower density of housing in many suburban areas than in other countries.

The solutions offered to date focus on 2G – voice and text only. ATT’s 3G Microcell may change this emphasis later in the year. Verizon/Sprint may respond with a 3G CDMA femtocell capable of EV-DO, which is reputed to be on Samsung’s femtocell roadmap.

Amongst the comment and reaction about femtocells from customers is that they should be getting this level of service for the current charges paid – either femtocells should be free or more cell towers should be installed to provide similar indoor coverage. I believe we’ll see rapid take-up by those who recognise these solve the specific coverage problem and that the extra benefit justifies the price. I've compared this to the value of the HDTV market . Mass takeup would of course reduce the cost in the longer term.

All US femtocells incorporate a GPS device which serves two or three purposes:

  • It identifies the location and is used to determine the licenced frequencies allowed in that area. This includes not transmitting at all, if outside a licenced area (e.g. a so-called “extended coverage” area, where service is provided through a local cellular company)
  • It can report the accurate location for Emergency 911 calls
  • Timing and clock synchronisation can be derived from the extremely accurate GPS clock signal, particularly important for CDMA and WiMAX systems

All the above solutions can be used with any wireline broadband supplier. Minimum rates of 300kbit/s are suggested (exceeded in almost all cases), with few reports of poor operation due to broadband internet quality.

Femtocells in the US Enterprise Market

All of the above offers have been targeted at domestic customers. There are no larger 8 or 16 channel femtocells publicly trialled or commercially available.  Femtocells may be of interest to smaller SOHO/SME businesses where they can be easily installed and fitted. Medium to large sized companies may have IT issues around security such as firewall, potential intrusion etc. which may add to the cost of installation. (For example, some businesses have a separate “open access” WiFi/Ethernet network specifically for visitors and casual WiFi use)

Will 3G femtocells make a difference in the US?

The iPhone and Google Android have certainly shaken up the data usage profile – some operators report iPhone data usage being up to 40 times that of other smartphones.

Once femtocells are in place, and the handset knows when you are  at home in your “femtozone”, many new applications are likely to appear.

Many other developed countries already have excellent coverage and so the simple coverage solution for a blackspot at home is less compelling. European and other operators will be watching the US market carefully to see if ATT’s 3G femtocell is perceived differently. They are looking for additional value to enhance the business case. A recent ThinkFemtocell poll reported that whilst 20% thought the business case for femtocells was satisfied for poor coverage only, 40% thought there is no single business case for femtocells. Instead a mix of different opportunities will combine to justify their introduction.

The US is certainly ahead with commercial launch of femtocells at the moment - we should see other countries follow suit during 2009, having learnt from the experience gained.



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