You have introduced CDMA Femtocells. What is the addressable market given that it only works on CDMA networks?
CDMA operators control some 15% of the mobile handset market. But in the US, 60% of all users are CDMA. So the majority uses CDMA. Moving forward, most operators will evolve towards LTE standard. The next Femtocell that we will launch will certainly be an LTE base station.
Among the CDMA operator customers you have, what level of interest have you seen in Femtocell?
Tremendous interest. RFPs are coming out from all the major tier 1s and tier 2s. We have been responding to RFIs on a regular basis over the last one year.
What is happening with Sprint’s femtocell trials?
Sprint began trialing the technology last year, and now offers femtocells in Denver, Indianapolis and Nashville. The company announced when it began the trials that it planned to make the offering nationwide during 2008, but hasn’t yet announced specifics.
Several operators are also reportedly moving away from the softswitch architecture. How do femtocells fit into that move?
From AirWalk’s standpoint, it makes sense for operators to move from a softswitch type core network to an IMS core network. A softswitch setup is expensive and not economically scalable to millions of femtocells. IMS-based deployments are less expensive and more scalable; and the economics scale well with both femto and macro types of deployments.
What in your opinion are the reasons for the failure of dual mode WiFi-GSM services?
There are a number of reasons why the dual mode phone based FMC services have failed. First of all dual mode phones have never been successful in any sphere of mobile services. Operators are also not willing to promote wifi if there is no revenue for them. They would rather go with dual mode technology like 1xRTT and EVDO – one being voice the other for data - and promote phones which supports both technologies. Cell operators stand to lose revenue with wifi. And the WiFi-GSM handover has not been seamless. Wifi is also unlicensed. That is another issue. The operators are now replacing that with all-licensed frequency.
But WiFi is ubiquitous. Femtocell does not even exist.
For full service involving continuity I think femto is going to replace wifi because it is capable of a better handover just like other macro base stations. There are other advantages as well. There have been certain shortcomings related to handin (versus handout) and physically moving a femto from one location to the other. But we have solved a lot of them. We have filed in several patent applications that address these issues.
And lastly, what sort of price range would be acceptable to consumers?
We are looking at a retail price of up to $200 per femtocell unit as being acceptable to most consumers. However, if operators want to win the mass market, the final cost to consumers will certainly be an issue. I believe that operators will target their marketing to those customers who do not have good coverage at home.