Will Consumers Pay for Coverage?

If there was ever a place in the world to explore consumer’s reaction to paying for coverage, it’s the US. While coverage undoubtedly improves year after year, the ads and tag lines from AT&T (more bars in more places) and Verizon (America’s most reliable network) tell the story that coverage is an important issue for American consumers.

So it is with great interest that we watch Sprint’s Airave femtocell service launch. Engadget reported today that consumers across the US can now order the Airave service.

The upfront price of the femtocell has increased to $99.99 from $49.99 in the initial service trial (Indianapolis and Denver). In addition, consumers must pay $4.99/month for the privilege of putting a CDMA (2G) base station in their homes to improve coverage. It costs $10/month for unlimited flat rate calling.

While some might question the logic of using a 2G/CDMA radio in the Airave (slower data service indoors, anyone?), it does ensure that the service will work with 100% of its deployed base of handsets, rather than the fraction of subscribers with 3G (EV-DO) phones.

Of course, T-Mobile’s HotSpot @Home service is the incumbent ‘home zone’ service offer in the US. There is no charge for using Wi-Fi to improve coverage. Subscribers can use existing Wi-Fi access points anywhere in the world to increase signal strength indoors. Consumers need a UMA-enabled phone, typically free or less than $100 with a two year service contract.

So it looks like the game is on for US consumers and mobile service providers. It will be interesting to see how this plays out.

Sagem makes it 3

Sagem's latest dual-mode handset, my519X, is now on the market and available to subscribers of Orange's unik service. The new tri-band phone music phone has an MP3 player and is 108 x 48 x 11mm, weighing only 89g.

The my519x is Sagem's third dual-mode handset to be sold by Orange for customers of its UMA-based service. The company also offers the Sagem my419x and my429x, which was added just a few months ago. .

With the addition of this new phone, Orange continues to drive its goal of offering more than 20 dual-mode handsets by the end of 2008.

T-Mobile's Home Phone Service

The other night I stopped by my local T-Mobile store. My buddy Jessica the sales rep was there. This time she knew to stay out of the way of the camera.

Here's some video of the visit. Jessica said there had been pretty strong demand. Well, why not, $10/month for home phone service. It's quite a deal.

Wi-Fi Stays Strong

The EU recently finished a study of telecom in the EU27 countries. The full study is published here in PDF.

One interesting statistic is the penetration of Wi-Fi into households with internet access. Within the EU27, 46% of households with internet access have Wi-Fi. As one would expect, the number actually goes up to nearly half (48%) when looking at just the EU15.

Topping the list in terms of penetration is Spain (68%) and France (67%), with Luxembourg at the top with 75% of internet enabled households using Wi-Fi.

It’s no wonder that Berg Insight projected Wi-Fi in handsets to grow at a CAGR of 71% over the next four years. By 2012, Berg projects 400 million handsets with Wi-Fi. The primary drivers are high speed interent access in the home/office, and ‘connected home’ applications.

US Market Heats Up

If the rumors are true, things in the home zone market are about to get very interesting in the US.

Yesterday, there was a flurry of rumors that Sprint will launch their femtocell-based Airave service nationwide July 15^th. The service has been in limited commercial trial for more than 6 months in the US.

Market watchers (like me) like to compare the service offers. According to the rumors Sprint will offer the Airave femtocell to subscribers for an upfront fee of $99 and $15/month (or $30/month for families). In return consumers get unlimited nationwide calling when attached to the femtocell, and improved coverage.

T-Mobile’s Wi-Fi based offer, HotSpot @Home, lets consumers use Wi-Fi access points already in the home or get new ‘optimized’ Wi-Fi routers from T-Mobile, which are free with a two year contract. Consumers can use Wi-Fi to improve coverage for their existing mobile plan. Or for an additional $10/month ($20/mos for families), subscribers can an add unlimited nationwide calling option when attached to Wi-Fi.

Interestingly, in a video interview from the Avren femtocell conference, Lauren Town, head of marketing at Orange for Wi-Fi-based home service Unik, noted that the value proposition articulated for femtocell home zones during the conference was nearly identical to their existing service.

It’s not clear if Sprint’s rate will come down to $10/month to match the T-Mobile offer. One clear advantage is that Sprint’s femtocell is 1xRTT (or ‘2G’ in CDMA parlance), which means that it will work with the entire installed base of Sprint handsets. T-Mobile's advantage? The service works on Wi-Fi anywhere in the world (enterprise, outside US,...) rather than just one femtocell.

Like many new offers, Sprint service has faced some growing pains during the initial trial phase. Presumably these issues have been worked out.

If anything, the pressure is increasing for AT&T and Verizon. Neither company has a ‘home zone’ offer, which means neither company has the ability to create a location specific service offer like ‘unlimited flat rate calling from home’.

PS – I just noticed this. The address used to be http://airave.sprint.com. But that address now redirects to http://www.sprintenterprise.com/airave/ Hummm…

An unlicensed femtocell

The market is catching on to the benefits of home zone services, where consumers get mobile services that work better and cost less. For operators, the ability to offload the macro network and increase the performance of mobile services indoors, coupled with the ability to develop location specific home or enterprise services has driven increased interest in this market opportunity.

Typically we talk about the need for home zone services, irrespective of the underlying radio technology (Wi-Fi or femtocell). For consumer and service providers, the benefits are nearly identical.

But an interesting trend has emerged in the press. Recently there have been several references to the ‘unlicensed femtocell’, perhaps known by the more common name of Wi-Fi.

The comparison makes sense. Femtocells have a couple of generic properties. One is a low power radio designed for use in-building CPE. Second is the ability for these devices to be deployed as consumer without operator intervention. Third, they are ‘self organizing’, meaning they determine their environment and adjust the capabilities accordingly. Forth, the term femtocell is actually radio agnostic. ‘Femtocell’ is applied to CDMA, UMTS, EV-DO, GSM, LTE, even WiMAX. While the one thing these have in common is that the frequencies are licensed, why not add 802.11 b/g to the list?

Now before you think this is something I made up, there have been several references of late:

This article in DigiTimes (“Tecom Ships UMA Femtocells”) refers to ‘UMA femtocells’ being shipped to T-Mobile. Clearly not the classic definition, these were in fact Wi-Fi terminal adaptors.

This article in The Register (“Femto Forum Gets Big Ideas”) comments that “In the USA T-Mobile is already deploying 2G femtocells to provide coverage in customers’ homes.” True, but it is an 802.11 b/g femtocell.

This last one is perhaps the most interesting. Ozzie Diaz, Chief Technologies for HP's wireless business, comments on his blog (“Wireless Operators Getting the Runaround”) about the importance of local radios:

One operator who does seem to have a clue on making use of these non-cellular radios in handsets is T-Mobile USA in their Hotspot@Home with unlimited calling while at home connected over their WiFi access point connected back to the T-Mobile core network. In essence a “femtocell” without the pain of the frequency planning or spectrum management. But taking the same advantage of femtocells and using the customers Internet access link at home for “free” backhaul to the core network…FABULOUS model of eliminating a BIG CAPEX problem for themselves.

It just gets you thinking about what a femtocell really is, a tool for making mobile services work better and cost less.

A Home Zone is a Home Zone

This week ABI Research released the results of a survey conducted on behalf of Motorola. The article states that while “…the majority of consumers have never heard of femtocells…”, “…more than 40% of European mobile and internet users plan to purchase femtocells in the next 12 months.”

It’s easy to conclude then, that the questions focused not on the wireless technology to be used in the home (e.g. a ‘femtocell’), but on the benefits of having a “Home Zone” service, where the key factors were better in-home mobile coverage and lower costs.

Demand was highest in Poland, Spain and Italy, with moderate demand in France and the UK. Germany had the lowest demand of the six countries surveyed.

We at UMA Today thought this sounded a bit familiar. Through the magic of the web, we were able to recall a similar announcement from Motorola in August, 2005. Three years ago, Motorola announced the results of a survey of 1,000 consumers in six countries on the demand for a dual-mode handset service. This time the countries were France, Germany, Spain, Sweden, Italy and the UK.

And the results??? About the same.

Demand was highest in Sweden, Spain and Italy, moderate demand in France, lower demand in the UK and Germany.

I think there are some very interesting data-points from both surveys:

• Clearly there is continued demand for home zone services, regardless of the technology.
• I find it ironic that Italy continues to show strong demand, showing me that Telecom Italia Mobile’s Unica service was a victim of regulatory roadblocks rather than consumer interest.
• Orange’s plans for its Unik/Unique service are in UK, Spain, and Poland, three countries with strong demand for Home Zone services.

UMA Today continues to be a strong supporter of Home Zone services, and this is simply confirms that there is market demand from consumers for a thoughtful, value-oriented service offer.

The Mobile Operator's Triple Play

Mobile operators have had a unique influence on personal communications. The rise of mobile services has put a phone into nearly everyone’s hand. Yet as a network-based service, the mobile has been largely disconnected from our most personal location: the home.

Over the past few years, mobile service providers have started to reach into the home by acquiring broadband service providers. The attraction is easy to see. Consumers buy mobile, consumers buy broadband, why not get broadband service from your mobile provider?

In addition, Universal Mobile Access technologies enable mobile providers to deliver mobile services over the broadband network through Wi-Fi and femtocell radios in the home. This ‘double-play’ service opportunity is building, with operators trialing and deploying ‘Home Zone’ services in the market today.

But yesterday’s announcement of T-Mobile’s fixed line home service, a VoIP offer from a mobile provider, suddenly opens up the mobile operator’s triple play: mobile, broadband and fixed.

In all fairness, mobile operators have tried to offer fixed line VoIP services in the past. But rather than using the existing mobile voice switches (MSCs), mobile operators were forced to buy new VoIP switches. Because these switches were separate from the MSCs providing the mobile voice service, there was a ‘disconnect’ to the offer.

There was a significant amount of work to integrate the bill from the VoIP switch into the bill for the mobile switch (in some cases, consumers received two bills…). With a new switch, a different provisioning system needed to be established to enable the VoIP service. Because mobile calls are anchored on the MSC and calls on the fixed network are anchored on the VoIP switch, there is no easy way to provide combinational services like dual ring and single voice mail.

With the advent of the UMA terminal adaptor, now mobile operators can seamlessly integrate fixed line home phone service directly into their existing mobile switching infrastructure, billing and provisioning systems. Calls on the fixed line appear simply as a second line within a subscriber’s existing service.

The market is already on the trajectory of a “Home Zone Triple Play”. Clearly the Linksys product, which supports a UMA terminal adaptor and Wi-Fi, is ideal for an operator to bring together dual-mode service, home phone service and broadband.

Within the femtocell community, there is a tremendous push to move into integrated femtocell products. Many companies have announced ‘integrated’ femtocell platforms to support DSL, Wi-Fi, and fixed line VoIP.

Looks like mobile operators are starting to attack the home.

T-Mobile's Fixed-line Home Phone Service To Go Nationwide

The now re-named “T-Mobile @Home” fixed line VoIP service looks set for a nationwide launch. I’ll be heading to my local T-Mobile store this week to check it out.

The service, which has been in limited commercial release in Dallas and Seattle, looks to be an enormous success. The article states that a whopping “…45 percent of users of the service … switched from other mobile operators”. Unbelievable!!!!!!

The offer is an incredible value, so I guess it makes sense. T-Mobile @Home offers consumers unlimited flat rate calling for $10/month from their fixed phone line. Comcast, my cable company, keeps telling me I can get the same service for $40.

Britt Wehrman, director of product development for T-Mobile, explains that many households maintain a fixed line home phone for convenience and ease of use. This service is addressing the segment of the market

The “T-Mobile @Home” service is separate from T-Mobile’s dual-mode service “HotSpot @Home”.

If you recall on June 13^th there was an article in DigiTimes titled “Tecom gears up shipments of UMA femtocell base stations”. The article goes on to estimate that Tecom will ship 1 million units by the end of 2008.

Clearly there was a typo with the title, as there are no femtocell deployments with these types of volumes anywhere in the world yet. However, it looks like the Tecom product could be at the heart of the T-Mobile @Home service. If T-Mobile (45% inbound churn) and Tecom (1 m units in 2008) are correct, this is going to be a huge success.

T-Mobile Expands

Today T-Mobile added the Nokia 6301 and Samsung T339 dual-mode phones to their line-up for the HotSpot @Home service.

With 8 HS@H phones available today, T-Mobile has most of the bases covered. The much anticipated HTC Shadow II will fill in the Windows Mobile 6.1 hole and round out the portfolio for T-Mobile.

Looks like T-Mobile will make good on their goal of adding ten new handsets this year.

iCall: Opportunity or Threat

A couple weeks ago there was news about a new application for the iPhone called iCall. In the clever video demo below, the founders describe iCall as an application for the iPhone which enables users to make calls for free over any Wi-Fi access point. The video how theiCall application works:

1. User starts call on GSM
2. User goes into Wi-Fi
3. Phone detected/attaches to Wi-Fi
4. iCall application asks the user if they would like to switch the call to Wi-Fi
5. Phone switches networks

If it sounds a lot like a UMA-based dual-mode handset service, it is. The only difference between iCall and T-Mobile’s HotSpot @Home service is step 4: User intervention.

So, is this an opportunity or a threat for the mobile operator? (Ed note: UMA Today’s position is always from the viewpoint of the mobile operator, UMA is for mobile operators)

There is a threshold for subscribers between ‘actions’ and ‘cost’. At what point does a user change their actions to save on costs? (Ed note: Here in San Jose, it’s when gas hits $4.60/gallon...)

Will users actually stop a call, press a button, and switch it to Wi-Fi to save money?

Or would users rather have a call that automatically switches to Wi-Fi and saves money? If so, then T-Mobile, Rogers, Orange, Cincinnati Bell, Telia and others already have this covered.

The Connected Home Heats Up

Just in time for summer, there is a lot of activity in making the handset part of the Connected Home.

For those who don’t know, there is a vision of a connected home where devices develop an ad-hoc network and can communicate. Standardizing this has been the domain of UPnP and more recently DLNA.

While there are a growing number of devices (TVs, DVRs, Printers, …) which support Connected Home, the mobile phone has been consistently out of the picture. Now two different approaches are helping to pull the phone into the connection.

First is Nokia with the N95, using Wi-Fi as the transport to communication with other devices in the home.

But clearly there is only a small number of Wi-Fi enabled handsets, and so femtocell vendor ip.Access has put together his clever demonstration on how a 3G phone could be proxied into the connected home through a femtocell.

While there are some questions about how this works, it's a powerful vision of bringing mobile phones into the connected home.

The Rush to Support Iu-h

There has been a lot of fervor surrounding the 3GPP's activities to develop a new Home Node B (aka femtocell) standard.

I came across the blog post the other day with the clever title "Supporting Iu-h, why the rush?"

The author has a pretty good take on the situation.

RAN Gateway wins again

I have spent some time considering the pros and cons of the new 3GPP HNB femtocell architecture. It’s too early to call it a standard, but for now, the basic building blocks are in place for putting the spec together.

One of the fundamental building blocks of the HNB effort is a ‘RAN Gateway’ style architecture. In this case, the RAN gateway network element sits ‘parallel’ to an RNC or BSC, and connects into the mobile core network via existing, well defined circuit interfaces (Iu-CS) and packet interfaces (Iu-PS).

Operators evaluating femtocells and femto architectures immediately grasped the benefits of using a RAN gateway approach:

• All existing circuit and packet services are supported through the femtocell access network as they are supported through the macro RAN network. This is because the RAN gateway uses the same service interfaces as the RNC.
• A ‘RAN’ gateway is located in the RAN, with a clear demark point into the mobile core network. For operators, they did not need to change the MSC or the service core in any dramatic fashion.

For all the rhetoric and posturing around the benefits of SIP and IMS, operators quickly understood that the most pragmatic approach for femtocell service delivery was through a RAN gateway architecture. In fact, one of the things that the proposals from Huawei, NSN, Alcatel/Lucent and Kineto/NEC/Motorola (ie UMA/GAN) all had in common was a RAN gateway.

From a UMA perspective, one important outcome of the HNB specification is a validation of the RAN gateway architecture operators and vendors alike.

UMA/GAN is, of course, the original RAN gateway architecture.

I harken back to the early days of dual-mode handsets (DMH). The debate raged: IMS/SIP/VCC vs UMA/GAN. It’s taken 3 years for this to sort itself out in the market. Today, it’s clear that UMA/GAN and the RAN gateway architecture is the (only?) choice.

In the last 12 months, the debate started again, this time for femtocells. But just as quickly, a winner was declared: RAN gateway for HNB (a la GAN).

Softmobile client from Gemalto

A UMA-enabled softmobile client is an application which has been on the drawing board for some time. There has been interest, but it’s been slow in coming.

For those who don’t know, the UMA-enabled softmobile client is a mobile telephony interface application which runs on a laptop and connects to the mobile core network via UMA.

The application is ideal for operators to offer their subscribers another way to use their services, especially when traveling outside the home country. Typically when I travel to Europe, I connect my laptop at the hotel and fire up Skype. But if I were to have a softmobile client from my GSM provider T-Mobile, I could use it instead.

Back at MWC 08, technology supplier Vitendo announced they had developed a UMA-based soft mobile. In addition, Gemalto announced that Orange has selected their UpTEQ Smart Dongle. But the announcement said nothing about UMA.

Now on their web site, the UpTeq Smart Dongle lists support for UMA.

This week, Orange UK announced plans to ratchet up their services and alluded to, among other things, a “…new ‘totally connected’ product line – including laptops, to build on fixed and mobile broadband capabilities”

We’ll have to keep an eye out to see if Orange UK becomes the launch pad for the softmobile application.

3GPP Selects Femtocell Standard, and it’s not (exactly) UMA/GAN

It was announced by multiple sources this week that 3GPP selected a reference architecture for femtocell-to-core network connectivity. This isn’t the completed standard, but sets the framework for the 3GPP RAN 3 working group to develop a full specification. The plan of record, per the 3GPP, is for the full stage 2 and stage 3 documents to be completed by Dec 2008 (in Release 8).

As has also been point out recently, the existing 3GPP UMA/GAN specification was one of a few architectures being considered as the basis for a formal 3GPP femtocell standard. The net result is that the UMA/GAN standard, as is, was not chosen. Sad but true. In order to reach an industry consensus on a HNB architecture there was a measure of compromise from all the participating companies. That’s the nature of standards: compromise.

However, while the HNB reference architecture is not full UMA/GAN, it adopts a number of key principles first introduced in the 3GPP GAN standard. For example, at the highest level, it follows an access-based (rather than core-based) approach, leveraging the existing Iu-cs/Iu-ps interfaces into the core service network. It also identifies the use of a specific protocol for solving a number of challenges associated with the ad-hoc deployment of devices over the internet.

Frankly, while the UMA community would have been delighted if 3GPP had adopted GAN lock-stock-and barrel (as they say in the US) as the formal femtocell standard, the likelihood has always been low. Fortunately, the agreed femtocell architecture builds on several core principles of GAN, which will help accelerate the market.

ThinkFemtocell has a good breakdown of different elements of the work.

For at least a little while longer, UMA/GAN remains the only 3GPP standard which supports femtocells today...

Rogers Launches Pearl 8120

Rogers, the latest UMA-based dual-mode service provider, today launched the RIM Pearl 8120 handset in their portfolio. The UMA Pearl is currently available from Orange and T-Mobile as well. It's good to see Rogers expanding their handset portfolio.

Vodafone Station: Screaming for UMA

As you may have seen, Vodafone announced a new product called “Station”. The original announcement was a bit confusing, but now that the dust has settled, I think it’s becoming clear.

The Station, made by Huawei, is a broadband router/modem. It can use either the integrated ADSL2+ modem or HSPA (via an additional dongle/UBS) for backhaul on the WAN. On the LAN, the Station provides Wi-Fi.

The target is to provide Vodafone subscribers with a broadband WAN connection. The target audience is likely someone using the Voda HSPA network for laptop data access. When at home, the HSPA network may have in-building propagation issues and the throughput/data rate may be low. Enter the Station. Install the Station with your HSPA dongle/USB key near a window to get a strong HSPA signal from the macro network. Then the Station uses Wi-Fi to transmit that signal to the laptop when at home.

So what is the ADSL2+ modem for? Well presumably it is faster to use the fixed network. And while I’m just speculating, I’ll bet they don’t want people sitting in their homes streaming lots of data over the HSPA network. Therefore, to offload the macro network, it’s better to have users running over a fixed line DSL connection. So users can start with HSPA while their DSL line is being installed.

The last wacky part? The Station comes with an analog voice port (ATA). Apparently when using the HSPA dongle, the station provides voice services over via the circuit voice capabilities of HSPA. And given the dongle has a SIM, this is another phone number/service available.

What I don’t understand is when the user transfers to the fixed line DSL connection, what happens to the analog voice service? With no dongle, there’s no way to associate the Station with the Vodafone mobile core. Hummm…

So why is this screaming for UMA?

First, it’s providing Wi-Fi indoors, clearly idea for a dual-mode handset service, and when the service transitions to the ADSL network, even better. With UMA, Vodafone could have a real ‘home zone’ service.

Second, the ATA ports could simply run UMA for the terminal adaptor function. Now the ports would be live/available to the consumer when connected via HSPA and/or DSL. It wouldn’t matter.

As I was writing this, I found a comment on Om Malik’s blog from someone suggesting there was a big opportunity in Wireless WAN and Wireless LAN. But can they build a femtocell (3G LAN) that uses HSPA for the WAN connection? That seems like a lot of 3G in one box, but maybe it’s on the drawing board somewhere.

The 3G iPhone needs "...VoIP like T-Mobile..."

Dear Steve Jobs...

In an open video/letter to Apple, the Street's senior technology correspondent Gary Krakow makes a list of his requirements for the new 3G iPhone.

Top of the list: 3G (doesn't that go without saying?)
But #2 on the list: "...a VoIP feature like T-Mobile..."

I think he means UMA!





If there's a problem, here's the link:

http://link.brightcove.com/services/link/bcpid1078966384/bclid1137812485/bctid1564516136

Apples and Oranges

I do appreciate the quote in Strategy Analytic’s press release about their latest research on the Enterprise FMC Market. They said “UMA is here to stay”.

But after reading the release about the report, I’m left feeling they are comparing apples and oranges.

"SIP-based services will initially be implemented by large multinationals with the capacity to carry voice traffic on their private MPLS network. Consequently, SIP-based revenues will overtake UMA revenues toward the end of the forecast period. Moreover, Microsoft's UC (Unified Communications) solution, is also likely to see positive uptake as a business solution," commented Andrew Brown, Director for Wireless Enterprise Strategies.

There’s no doubt that enterprises will use SIP for IP telephony. IP-PBXs all run SIP. One of the fundamental advantages is that the calls can be carried between PBXs over the enterprise’s own private networks. But that’s an enterprise solution.

UMA is a technology for mobile operators, not enterprises. Certainly prosumers will use UMA in the enterprise, but IT departments can’t ‘deploy UMA’. And UMA was not designed to be carried through a private network.

So comparing UMA revenues with SIP revenues for Enterprise FMC doesn’t seem to be comparing like services.

There is no doubt that UMA will have an impact on the enterprise market, but it will be an FMS impact, migrating minutes from the fixed network/PBX to the mobile network.