Femtocell Value Proposition - Fridge Notes or Signal Boosters?
Posted Mon, 29 Jun 2009 09:42:42 EDT by Aditya Kaul
Last weeks Femtocell World Summit in London was a unique blend of optimism and cautious skepticism.
On the one hand, you had the femtocell vendors enthusiastically showcase their fancy femtozone applications, proving that femtos could be fun devices to have within your home. The award winning application was from ip.access which acts like a fridge note - wherein you can send in a note to your friends or family over Facebook, which will then pop up on their phone once they reach home, courtesy the femtocell recognizing the presence of that person when at home.
On the other hand, you had people question the business case for femtocells, with some surveys showing that customers would like these femtocells for free. Another common reaction that I got from most people who viewed the femtocell application demos was that, ‘How many of these applications are actually worth monetizing?’
Although many of the staunch critics of femtocells were silenced on the first day of the conference, with the worlds largest mobile operator Vodafone announcing their commercial femto launch – Vodafone in some ways has disappointingly joined the ranks of Sprint and Verizon who primarily look at femtocells as signal boosters and a churn reduction tool. The Vodafone Access Gateway is being largely marketed to rural customers in the UK who have a voice coverage issue at home.
In my view, the femtocell market is at a very crucial stage now where femtocells are beginning to get deployed across consumer homes worldwide. The fact that customers have very low expectations as per the perceived value of femtocells, directly translates to how much they would be willing to pay for the device. If operators continue to rollout femtocells with the lowest common denominator as their value proposition, it might take a long time before operators start selling fridge notes over the same boxes.
Also the fact that most of the vendors showcasing the applications had no real understanding of the business case around these applications is a scary thought. It would have been really useful to see an application that had a clearly defined business case and some monetization mechanisms on offer.
It’s critical that both vendors and operators think this through very carefully. They need to begin to work out the business case for these services soon. I think it’s a lot about the expectations that consumers have - if you set the bar too low it might become difficult to continually change their expectations. If femtocells indeed have the capability to completely transform and change the way mobile services have been offered, lets act on it now.
The mobile industry has not been the most innovative so far – after all it took a computer manufacturer (Apple) to re-define the 3G experience on mobiles. I am wondering if the mobile industry needs another wake up call when it comes to femtocells?