Monday, October 27, 2008

Verizon preps femtocell service

According to reports from Engadget and, Verizon Wireless plans a launch of its own femtocell service based on Samsung’s Ubicell. We all know this is the same product used in Sprint’s Airave service.

For those following the Home Zone/FMC market, this amounts to an ‘I told you so’ moment. T-Mobile kicked things off. Next was Sprint, now Verizon. It looks like the FMC market in the US is really heating up. We told you home zones were hot.

This all stems from T-Mobile’s “Unlimited HotSpot Calling” (formerly known as ‘HotSpot@Home’), the Wi-Fi based Home Zone service T-Mobile launched about a year ago.

At the time, the UHC service provided something totally different than any of the other mobile operators in the US could deliver: a location specific ‘service zone’. T-Mobile could identify that subscribers were in their homes, and offer an unlimited, flat rate calling plan only when on Wi-Fi.

T-Mobile also got the added benefit of improving coverage in the home or office by using the Wi-Fi that already exists in those locations.

In response, Sprint launched Airave in September, 2008. It has been pointed out in this blog that while GSM operators have a choice of Wi-Fi or femto technology, CDMA-based operators are unfortunately limited to femtocells.

Without the ability to segment subscribers into specific locations, ATT and Verizon, launched unlimited MOBILE calling for $100. While all the majors eventually followed suit, this move immediately devalued the outdoor macro network, setting a ceiling on services at $100. Why not create a home zone offer, and limit unlimited calling to specific locations?

Yet Sprint and T-Mobile still had the upper hand, with unlimited calling when attached to Wi-Fi or the femtocell for just $10/month.

So now today we see Verizon realizing that a home zone service is different. In the US, it appears that a home zone service is now a competitive requirement.

AT&T, as a GSM operator, has a choice. They can do a femtocell service, or do Wi-Fi/UMA, or, I suppose, do nothing. It will be interesting to see what happens next.

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