Editor's note: This two-part article addresses the changing views and growing adoption of two alternatives to traditional telecom network management: Femtocell technology and Wi-Fi hotspots. In part two, carriers and vendors discuss the wireless business model behind incorporating these technologies into a 3G network offload strategy.
The crushing growth of mobile data consumption is forcing wireless carriers to embrace alternative approaches to telecom network management that they had once snubbed or leisurely shelved -- generating long overdue business models for offloading 3G traffic onto femtocell technology and Wi-Fi hotspots.
"The current so-called 'new' willingness of operators to look at this is not a new willingness," said telecom consultant Tom Nolle, president of CIMI Corp. "It's really [that] the conditions actually justifying [more investment in] hotspots have now been met -- with the advent of smartphones and tablets -- so the question of how you do this and where is becoming more important."
Femtocell technology and Wi-Fi hotspots both offer opportunities for 3G traffic offload, but they diverge in design: Femtocells use licensed spectrum and are typically deployed privately indoors; Wi-Fi sticks to unlicensed spectrum and is used publicly or privately, indoors or outdoors. But the end is becoming more important than the means for effective telecom network management, Nolle said.
"[Femtocell technology and Wi-Fi hotspots are] really not any different in terms of business proposition than the question of subsidized versus unsubsidized handsets," he said. "It's a function of the strength of the business proposition."
No longer limited to a few participating Starbucks coffee shops, AT&T's Wi-Fi footprint has quietly expanded to include more than 20,000 hotspots in airports, hotels, McDonald's restaurants and Barnes & Noble bookstores to meet demand stemming from Apple's iPhone. Customers can either buy service as a day pass or a monthly subscription, and iPhone users receive it free.
AT&T continues to expand its approach to telecom network management for 3G traffic, having announced at CTIA Wireless 2010 last month that it would take its pilot femtocell, MicroCell, nationwide starting this month. Although MicroCell lists at $149.99, AT&T plans to discount the device by bundling it with other services.
"Covering every nook and cranny in every home in the United States -- there's no way that this society is going to allow us to build enough towers, regardless of what the cost is," said Gordon Mansfield, senior director of radio access network planning at AT&T, at a panel on femtocell growth. "You have to come up with alternative solutions."
Read part two: Wireless business model evolves via Wi-Fi, femtocells for 3G network offload.
Let us know what you think about the story; email: Jessica Scarpati, News Writer