Femtocell Opinion, comment and reviews

The reality of Dual-Mode WiFi on the street

Nokia 6301 UMA phone How easy is it to buy femtocell-like service today? I thought I'd enquire about Orange's "Unique" service which offers similar functionality using to femtocells, using WiFi in your house and a special dual-mode WiFi/Cellular phone. My experience didn't make me rush to sign up, and flags up several issues which femtocell operators will need to address in their sales and marketing operations.

The Unique service is marketed by Orange in several countries using slightly different names (e.g. Unik in France). Here in the UK, you must buy DSL broadband service from Orange and have a WiFi hub. Using a specially enabled WiFi/cellular phone - not just any old WiFi/cellphone, it must be UMA enabled - voice calls, text messages and data services are routed over your WiFi and wired broadband at a reduced price.

First stop was the Orange UK website. Plenty of attractive material on there about DSL home broadband, and on both contract (pay monthly) and pre-paid (pay as you go) mobile options. No obvious link to a page or hint about the Unique service. A search on the site found a webpage (since withdrawn) which is fairly sparse on the service capability. Further information may be available once you have revealed your home phone number and email address on their enquiry form.

Next stop was a visit to an Orange retail shop - I'll keep it anonymous to protect the employees, suffice to say it was a large shop in London. Although near to closing time, the assistant was bright, friendly and helpful. The conversation went something like this:

"Can you tell me more about the Orange Unique service which I understand allows you to use your mobile to make cheaper calls using your WiFi broadband at home?"

"Yes I can. Actually, you are the first person to come into the store and ask about this service.... it's not being strongly marketed/promoted by Orange HQ."

I understand you need a special type of phone. Can you show me what the choice is?

Walk over to large display of really nice, modern phones. "The only one you on display which has this feature is the Nokia 6301. Many of the latest smartphones do have WiFi, but don't support this service."

I look at the 6301, which in case you haven't see it, is fairly basic. It includes a 2MP camera and FM radio. Its a solid, basic phone that's great for voice calls and texting, but not much else. Nobody's going to mug you for this model.

"Have you any literature on this feature?"

Gives me a nice glossy brochure describing their home broadband DSL packages. Nowhere is mentioned anything about the Unique service. There is a facility to make VoIP calls over DSL broadband which are free to landline numbers in about 30 countries and any Orange UK mobile. Calls to other network mobile numbers, premium rate landline numbers and other countries are charged at landline market rates. The sales rep explains that when operating using Unique in WiFi mode, call charges are applied on the same basis.

"What do I need to get this service then?"

1. You must signup for DSL broadband from Orange, and cannot use any other broadband supplier. This means a minimum contract lockin of 18 months. Prices are very competitive and optionally can include transferring the voice service for your landline phone to Orange too. There service is comparable with other very large DSL broadband suppliers in the UK. It's fine when it works, but if you have a problem the customer support is outsourced to India and there have been some anecdotal reports of poor service. (The consumer association rank Orange broadband service poorly compared to other DSL broadband providers in the UK).

2. You must signup for a pay monthly contract with Orange. For this you'll get the phone free. Typical contract periods again are 18 months. Monthly plans range from a minimum of about £15 ($30) upwards.

3. You get a phone which frankly is an embarrassment. This isn't something new and cool you'll be showing off to your friends and comparing with the iPhone or Omnia. Its true that more phone options are on the way, including a new 3G version., but there are only two models to choose from today.

4. Other household users can't benefit from this service. If you have family members on pay-as-you-go, or who prefer to have a different phone from those available/supported, then they can't use it. They'd need to be on contract too. And they'd need to change their phone too.

5. Who would provide customer support for this service? I didn't ask this question, but seriously wonder whether problems would be quickly identified across the phone configuration, your WiFi hub/router configuration, the broadband service, the UMA and mobile network.

What's in it for me then?

Broadly, cheaper calls (providing I make an awful lot of them from home) and good indoor voice coverage (which currently isn't a problem in my neighbourhood).

I left the store with a clearer picture of what was on offer, and that it definitely wasn't for me. There wasn't any mention of addressing poor coverage problems, partly because I hadn't mentioned it, and partly because indoor nationwide coverage on Orange is really pretty good generally.

In order for Unique to be attractive to me and satisfy my needs, I would need to:
a) Be making a lot of outbound mobile calls to landline, international and Orange UK mobiles
b) Not mind having a fairly basic phone
c) Not looking to make savings from any other (non-contract) family user

I've heard it suggested that Orange use this service as a customer retention tool. If customers phone up threatening to leave because of poor coverage/reception in their home, it's one way of fixing their coverage problem and potentially locking them in with a wider range of services rather than losing them.

Lessons to learn for femtocell adoption

I've heard it said that when signing up for mobile phone service, the customer typically takes 10 times longer to choose the mobile phone than the service provider. Femtocells have a great advantage from the outset because they support all standard 3G phones.

1. Operators need to market the femtocell service, giving clear benefits to the customer. It seems Orange (in the UK at least) is choosing not to actively promote their Unique service, either because they are still waiting for a wider range of mobile handsets (they claim up to 30 will be on offer by the end of 2008), or because the business case isn't that good for them - they'll lose revenues on mobile phone calls made on their network today.

2. All household members should get the benefits of the femtocell (although they would need to switch to the network of the femtocell operator). This can be done easily through changing the SIM card. It shouldn't be restricted to pay-monthly contract customers.

3. Support all 3G phones. Whilst femtocells will give a better user experience when using a femto-aware handset, backward compatibility provides a much wider choice and reduces the cost (and pain involved in changing handset) to adopt the new service.

4. Think hard about whether to mandate that the wired broadband service must be provided by the femtocell operator too. There's a balance between insisting on providing this or not. Operators will want to capture the additional revenue, reducing the likelihood of churn and therefore increasing the long term value of the customer. They'll also expect fewer support issues and technical incompatibilities if they provide the end-to-end solution. On the other hand, requiring transfer increases the commitment required up-front to take the service, especially when long (18 month) contract periods are involved. The customer may well have a contract lock-in period with their existing broadband supplier, making it expensive to switch. Perhaps some financial benefits might entice customers to switch at a later date.

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Comments   

#1 Steve Shaw said: 
David,

Good information. There were two key lessons for operators preparing for a femtocell launch that I picked up in this post.

First, don’t restrict your service to your own ISP/broadband network. Consumers don’t want to change broadband providers to get a new/different mobile service. This means less control for your service, but a wider addressable market.

Second, the value proposition of ‘cheap calling’ and ‘improved coverage’ applies to a certain segment of the market. Highlighting those benefits is a start, but quickly the service needs to move beyond it.

Otherwise, until Orange decides they are ready to actually launch the Unique service in the UK, it’s going to be difficult to gauge its success. In France, Unik has sold more than 1.2m devices and Orange has a strong lineup of handsets from Nokia, Samsung, RIM and Sony Ericsson. Presumably those devices will be coming to the UK in the near future.

steve
0 Quote 2008-09-25 02:09
 
#2 Thinkfemtocell said: 
Steve,

Fair points - I'd agree there are lessons to be learnt from UMA services today and the article was intended to highlight these.

Orange clearly isn't marketing their Unique service in the UK yet - perhaps their recent press announcement of some 3G phones supporting UMA will be linked with a relaunch in the UK.
0 Quote 2008-09-25 18:35
 
#3 Dean Bubley said: 
One of the things that this highlights is that both dual-mode and femtocell offers don't fit well with the 70% of worldwide mobile users who are on prepay tariffs.

It's pretty unlikely (outside the US & Japan) that *all* members of a household would want to be on a single combined monthly subscription, and especially if it *has* to be with the fixed-broadband provider. There needs to be a way to accommodate a mix of post- and prepay subs in the same femtocell household, ideally across multiple operators as it's highly unlikely to get everyone on the same network (given exclusive handsets, specific content, work phones etc).

There's also an issue in most instances with legacy 2G handsets being owned by at least some members of a 4-person household, which parallels the UMA experience. Ultimately most people will have 3G phones, but it'll take a few years more to get there, especially for people on low-end unsubsidised prepay.

Dean
0 Quote 2008-09-29 09:14
 
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