Mobile Internet Solutions » Vodafone

Verizon starts testing voice over its LTE network

lesliemanzara — Thu, 10 Feb 2011 15:14:53 +0000

Ralph Jennings, IDG News Service, 2/10/2011

The VoLTE phone call, hailed as a world first, would free up handsets for multi-tasking

Verizon Wireless said on Thursday it had made the first voice call over a commercial LTE network using the Voice over LTE standard. The standard is one of two competing to become the defacto technology for routing voice calls over the new data networks.

The 33-second call voice call was made on Tuesday between employees at its New Jersey headquarters via a pair of LG Revolution smartphones. On subsequent calls, Verizon Wireless employees were able to chat, use the Web and download material at the same time, the company said in a statement.

Carriers and equipment vendors are evaluating both VoLTE and a competing standard Voice over LTE via Generic Access (VoLGA) as the next advances in high-end mobile phone communication. Current systems can’t be used because LTE is an all-IP network.

Once the Voice over LTE (VoLTE) technology is commercialized next year, Verizon Wireless users with LTE-equipped handsets made by firms such as Samsung, HTC or LG Electronics, will be able to talk and run other data applications at the same time, company spokesman Jeffrey Nelson said.

“I would call it a big step, but not a leap,” Nelson said. “You want to compress those voice calls so there’s room for other applications. VoLTE will free up bandwidth for video chats on a big scale, like lots of people doing it at once.”

Voice quality over VoLTE should also be “high definition” with a “richer tonality,” company product VP Marjorie Hsu said in an interview.

The successful call, which Verizon called a world first for a commercial VoLTE network, comes after the company’s launch of LTE (Long-Term Evolution) in 38 U.S. cities in December.

The first LTE services launched in Norway and Sweden in 2009 for data users.

Verizon Wireless, a joint venture between Verizon Communications and Vodafone, plans to enhance VoLTE and work on its commercial 4G LTE network this year, the company statement said. Nokia Siemens Networks is also testing VoLTE.

Company CTO Tony Melone predicts that “VoLTE will quickly become the global standard for delivering voice over LTE networks,” the statement said.

But there is no guarantee. Deutsche Telekom has been testing the rival VoLGA standard for voice calls since 2009 using systems from Alactel-Lucent and Kineto Wireless.

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Hedge Fund Manager Falcone’s Big Bet On Wireless Broadband

lesliemanzara — Fri, 27 Aug 2010 17:06:29 +0000

Tricia Duryee, MocoNews.net, 8/27/2010

Investors in the Harbinger’s hedge fund are increasingly uncomfortable with Philip Facone’s obsession with building a high-speed wireless broadband network. Falcone, who got rich by out-smarting the subprime housing bubble, has committed roughly $3 billion or 40 percent of the fund’s assets to LightSquared, making the telecom company the hedge fund’s single largest and most concentrated bet, according to a Reuters special report.

LightSquared will have to raise an estimated $6 billion to build out a network that will be late to market, especially when compared to Clearwire, Verizon Wireless and AT&T. So far, Harbinger has already contributed $2.9 billion in assets to LightSquared, which has secured additional debt and equity financing of up to $1.75 billion.

The plan is for Reston, V.A.-based LightSquared to leverage its deep nationwide spectrum holdings to provide a lower cost wireless broadband service to under-served areas. To do so, it will launch two satellites by early next year that could deliver signals to towers on the ground. It estimates that it could reach 260 million U.S. residents by 2015. Comparatively, Clearwire already delivers 4G to about 56 million people in the U.S.

If history is any indication, LightSquared has a lot going against it. Not only will it have to secure billions more financing, but it is following in the footsteps of a long list of failed broadband satellite providers.

Clearwire has demonstrated just how difficult and expensive it is to build a new wireless network from scratch. Over the past few years, it has raised billions in private equity and from a public offering and has secured even more from partners, such as Sprint, Comcast, Google and others. LightSquared would inevitably have to secure more partners, but given that Clearwire has already aligned itself with Sprint and a handful of cable operators, the only obvious partner remaining, analysts say, is T-Mobile USA because it doesn’t have a 4G strategy. (T-Mobile has also been in talks to work with Clearwire.). Likewise, it would appear that LightSquared’s technology is completely unproven, and other telecom companies, like TerreStar, are near bankruptcy (Harbinger owns 30 percent of TerreStar, and could be lining up to take advantage of its weak financial position).

Regardless, Falcone is bullish and has hired experienced employees to run the day-to-day operations of the company. Sanjiv Ahuja, formerly Orange’s former chief, has been appointed to the position of CEO, and Frank Boulben, formerly of Vodafone, is chief marketing officer.

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LiMo rumoured set for recall to Linux mothership

lesliemanzara — Wed, 04 Aug 2010 14:32:05 +0000

Bill Ray, The Register, 8/4/2010

The operator-backed LiMo Foundation is on the verge of folding into the Linux Foundation, according to Taiwanese manufacturers working with the standard.

Digitimes reports that Vodafone has given up on the platform following poor sales of its LiMo-based Vodafone 360 handsets, and that the remaining partners are having a hard time being optimistic about the future in the face of Android’s overwhelming presence.

LiMo was supposed to be the operators’ choice, and when Vodafone selected the platform to run on the Samsung-manufactured handsets customised for its 360 service it was a welcome endorsement, even as it was a slap in the face to Symbian. But it seems that Vodafone’s interest in 360 is greater than its interest in LiMo – the operator has been pushing 360 services onto its Android handsets.

With Motorola having deserted LiMo last year, and the Samsung/Vodafone endorsement apparently stalled, that just leaves DoCoMo, Panasonic, NEC and Orange as torch carriers for LiMo.

Or it would, if it wasn’t for the fact that three of them are members of the still-unnamed consortium to create a high-level application API which would render the underlying OS irrelevant. Worse, the announcement of that new API layer didn’t even reference LiMo, only saying that it could work happily on Linux and would probably be ported to Android in due course.

LiMo still has lots of members, including Orange, Telefonica, SoftBank and others, and tells us that it won’t comment on rumour and speculation. But it’s hard to see how an Android alternative can survive even with operator backing. Folding into the Linux Foundation might be the best option to save face. ®

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Verizon Wireless Said to Start Offering IPhone in January

lesliemanzara — Tue, 29 Jun 2010 20:50:33 +0000

Amy Thomson, Bloomberg, 6/29/2010

Verizon Wireless, the largest U.S. mobile-phone company, will start selling Apple Inc.’s iPhone next year, ending AT&T Inc.’s exclusive hold on the smartphone in the U.S., two people familiar with the plans said.

The device will be available to customers in January, according to the people, who declined to be named because the information isn’t public. Natalie Kerris, an Apple spokeswoman, and Jeffrey Nelson, a Verizon Wireless spokesman, declined to comment.

The iPhone, which has been the sole domain of rival AT&T in the U.S. since June 2007, will give Verizon a boost in its competition for smartphone customers, UBS AG analyst John Hodulik said in an interview. Verizon customers, who numbered 92.8 million at the end of the first quarter, may buy 3 million iPhones a quarter, he estimates.

“The fact is, Apple is going to dramatically increase the number of devices it sells in the U.S. when exclusivity at AT&T ends,” said Hodulik, who is based in New York and rates Verizon shares “neutral.” “It’s hard to ignore the quality issues that AT&T has faced.”

Verizon Wireless, which is building a high-speed fourth- generation network, plans to unveil several devices that will run on the new technology in January at the Consumer Electronics Show, Chief Executive Officer Lowell McAdam has said.

IPhone Gains

Verizon Communications Inc., which co-owns the wireless company with Vodafone Group Plc, slid 9 cents to $28.62 in New York Stock Exchange composite trading at 4 p.m. AT&T fell 49 cents to $24.46. Apple, based in Cupertino, California, dropped $12.13 to $256.17 on the Nasdaq Stock Market.

Peter Thonis, a Verizon Communications spokesman, declined to comment. Mark Siegel, an AT&T spokesman, didn’t immediately return a call seeking comment.

The iPhone has helped AT&T add subscribers even as the U.S. mobile-phone market nears saturation. There are enough wireless devices for more than nine out of 10 people, according to the CTIA wireless industry association.

In the first three months of this year, about a third of AT&T’s iPhone activations came from customers who were new to the carrier. Without those 900,000 new subscribers, the company may have posted a loss in contract customers that quarter, analysts said.

Still, Dallas-based AT&T has battled customer complaints about its wireless service, especially in New York and San Francisco, and dedicated an extra $2 billion to upgrading its network this year.

BlackBerry, Android

For Apple, a partnership with Basking Ridge, New Jersey- based Verizon Wireless is a victory over rivals such as Research In Motion Ltd. and Motorola Inc., whose smartphones are currently promoted by the carrier.

“For Apple it means a larger addressable market,” said Andy Hargreaves, an analyst at Pacific Crest Securities in Portland, Oregon. “It’s also good news for Apple in that it will spread the load on the wireless data networks, which will be good for their customers.”

Motorola, which makes Droid phones that use Google Inc.’s Android operating system, fell 27 cents, or 3.8 percent, to $6.80 on the New York Stock Exchange. Google dropped $17.82, or 3.8 percent, to $454.26 on the Nasdaq. RIM, maker of the BlackBerry, declined $3.22, or 6.1 percent, to $49.75.

Apple has sold more than 50 million iPhones after the phone’s introduction in 2007. The latest version, iPhone 4, sold more than 1.7 million units in the first three days after its June 24 debut, a record for the product. Chief Executive Officer Steve Jobs said the company didn’t have enough supply to meet demand. Many stores, including retailer Best Buy Co., sold out.

A release at Verizon in the first quarter will help Apple’s sales in the U.S. grow to at least 15 million units next year from 11 million in 2010, Barclays Capital analysts said in a note today. The company’s suppliers have been ramping up production of components for a phone on Verizon’s CDMA network, according to the research report.

To contact the reporter on this story: Amy Thomson in New York at athomson6@bloomberg.net

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Mobile group drops Java price against Apple and Android

lesliemanzara — Tue, 22 Jun 2010 17:19:11 +0000

Gavin Clarke, The Register, 6/22/2010

Mobile phone providers are fighting back against Apple and Google by cutting the cost of doing business using Java on mobile.

The Unified Test Initiative, a body comprising handset and service providers, has slashed the price it charges Java Mobile Edition (Java ME) developers to test and verify their work properly on different phones and networks.

Developers will pay just 75 euros ($92.91) to test and verify a “simple” Java ME application under UTI’s Simple App testing criteria – down from up to 300 euros ($371.64) to sign more complicated apps.

Tests and verification covers a range of functions, such as the ability to install without crashing over the air, to work with different screen sizes, and to support encryption.

The UTI has simplified the test in addition to cutting the price, saying that today, most applications sold for mobile devices from App Stores don’t require the full range of tests.

“For applications that don’t ask for such privileged access, we’ve cut down the set of Java Verified tests that need to be run, and therefore the costs,” chair of Java Verified and Orange’s director of developer services Martin Wrigley said.

The UTI made a point of stressing that Java ME remains the default flavor of Java mobile despite Google’s fast-growing Android that actually runs a subset of Java for the desktop – Java Standard Edition (Java SE) and – and the presence of Apple’s iPhone that bars Java and runs applications built using its Cocoa framework or inside the Safari browser.

The group claims Java ME is the world’s most broadly deployed mobile runtime, on handsets from nine of the top 10 manufacturers and three billion phones worldwide. The group’s run by AT&T, LG, Motorola, Nokia, Oracle, Orange, Samsung, Sony Ericsson, and Vodafone.

The UTI last week announced that it has achieved independence from Oracle, having been previously owned by Sun Microsystems – the Java steward now owned by Oracle. The move is a possible sign of things to come for the Java Community Process, also owned by Sun.

The group said freedom from Oracle will increase its flexibility in adding new capabilities and functionality to its Java Verified program and ability to quickly implement and manage new quality assurance programs. ®

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Verizon Strives to Close iPhone Gap

lesliemanzara — Thu, 10 Jun 2010 17:43:24 +0000

Spencer E. Ante, The Wall Street Journal, 6/10/2010

When Steve Jobs wrapped up his announcement of the new iPhone 4, another big Apple Inc. event had come and gone with no mention of Verizon Wireless.

That was a disappointment for some smartphone customers. Verizon Wireless executives, too, are eager to get their hands on the phone and speak regularly with their counterparts at Apple.

But the country’s largest wireless carrier by subscribers is also working hard on Plan B. By loosening its grip over operations and deepening its relationships with allies such as software giant Google Inc. and handset makers HTC Corp. and Motorola Inc., Verizon Wireless is finally making progress in the smartphone race.

Since announcing a deal last October to develop phones with Google, the carrier has introduced two hit Google-based devices—the Motorola Droid and the Droid Incredible by HTC—and its share of the U.S. smartphone market has risen about a percentage point, to 24.1% at the end of March, while AT&T’s fell nearly four points to 41.9%, according to comScore, which measured users over 13 years old.

While AT&T Inc. remains the exclusive iPhone carrier in the U.S., Verizon Wireless is working with Google to develop a tablet computer, and other Android smartphones are slated for release this year. Verizon Chief Financial Officer John Killian told a group of investors on May 18 that, “We are going to do as well as if we had the iPhone.”

Backing up that statement will take more work. When Verizon Wireless passed on the chance to carry the iPhone four years ago, it fell far behind AT&T in sales of smartphones and data services—the mobile Web browsing, messaging and wireless application downloads that are fast replacing phone calls as the driver of wireless revenue.

More Verizon Wireless customers are buying smartphones, but just 16% of its customers over 13 currently carry them, compared with 33% of AT&T’s, according to comScore. AT&T also collected 18% more a month in data revenue per customer than Verizon last quarter.

Adding to the pressure, AT&T Monday changed its data pricing, instituting usage limits for new customers but lowering the minimum smartphone service plan to $55 a month, compared with Verizon’s $70 a month.

Verizon Wireless Chief Executive Lowell McAdam said in a recent interview that senior executives at his company talk at least once a quarter with their counterparts at Apple.

Apple appears to be developing a version of the iPhone that could work on Verizon Wireless’s network, people briefed on the matter said this spring, and analysts think the carrier could get the phone next year.

“There are a lot of interesting things we can do together,” Mr. McAdam said of Apple, “and I am confident that eventually we will.”

Until then, the relationship with Google and some key manufacturers gives Verizon Wireless a hedge against the iPhone. And it serves the company’s goal of not being too dependent on one device.

More than any other carrier, Verizon Wireless has helped fuel the adoption of Android, using its marketing muscle, customer service expertise, and 2,300 retail stores to propel Google’s wireless software. This year, Verizon has become the largest U.S. seller of Android-based smart phones, according to analysts at Credit Suisse.

The pairing of Verizon Wireless and Google, the main competitors to AT&T and Apple, respectively, seems obvious today, but it began with a degree of suspicion.

After missing out on the iPhone, Verizon Wireless, a joint venture of Verizon Communications Inc. and Vodafone Group PLC, realized it had to go further in opening up its tightly managed system to devices and applications developed by others in order to compete.

“We had been incredibly controlling of the network,” said John Stratton, the carrier’s chief marketing officer. “We knew that it would slow down innovation.”

Meanwhile Google, which until recently was pushing a new model for selling phones directly over the Web rather than through carriers, shared Silicon Valley’s skepticism about big phone companies.

In early 2008, when Mr. McAdam visited Google’s Mountain, View, Calif., headquarters and told CEO Eric Schmidt that he was ready to let rival companies develop handsets and software on his network, Mr. Schmidt replied, “Yeah, right.”

After Verizon Wireless hosted a big conference to help develop those devices, Mr. McAdam recalled, “[Eric] called me up and said, ‘You guys were telling the truth; let’s sit down and talk.’”

The companies bonded in 2009 while putting together the Motorola Droid, the first Android phone to sell one million units. Since the middle of last year, Verizon Wireless executives have visited the Google campus every three months for high-level planning sessions.

Mr. McAdam, along with Chief Marketing Officer Mr. Stratton and Senior Vice President John Harrobin often meet with Google Chief Executive Eric Schmidt, Android chief Andy Rubin, and other Google executives such as vice president of engineering Vic Gundotra.

The two teams review the latest Android operating systems and match software up with handsets. “We talk about the experience we want,” said Mr. McAdam. “We literally call it the GX, or the Google experience.”

This spring, after a group meeting where the team discussed multiple devices, Verizon Senior Vide President John Harrobin sent Google engineers a case of highly caffeinated Red Bull as a bit of liquid encouragement. “I wanted them to have a little extra energy for work,” Mr. Harrobin said.

Google seems to have come around to the benefits of the carrier system. In April, Verizon Wireless decided to not offer Google’s Nexus One phone on its network. The following month, Google pulled the plug on its experiment with retailing phones over the Web amid poor sales and complaints about shoddy customer service.

“The carrier model is an established model,” Google Android chief Andy Rubin said in an interview. “Consumers can walk in off the street and put their hands on a device and feel it. When you’re choosing among three devices, it’s best to use them side by side, and that’s something you can’t do on the Web.”

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LiMo to launch handsets on three more major carriers this year

lesliemanzara — Thu, 20 May 2010 12:50:07 +0000

Todd Haselton, MobileBurn, 5/19/2010

The Linux Mobile (LiMo) foundation’s executive director, Morgan Gillis, said that Vodafone was the first of four total carriers that will launch handsets this year during the Reuters Global Technology Summit. The carriers could be subsidiaries of France Telecom, Telefonica Verizon, or SK Telecom. The LiMo foundation was launched in 2007 to help deliver a Linux-based platform to mobile devices.

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WSJ Reports CDMA iPhone on its way

lesliemanzara — Tue, 30 Mar 2010 21:34:30 +0000

Yukari Iwatani Kane, Ting-I Tsai and Niraj Sheth, Mobile Tech Today, 3/30/2010

Apple Inc. plans to begin producing this year a new iPhone that could allow U.S. phone carriers other than AT&T Inc. to sell the iconic gadget, said people briefed by the company.

The new iPhone would work on a type of wireless network called CDMA, these people said. CDMA is used by Verizon Wireless, AT&T’s main competitor, as well as Sprint Nextel Corp. and a handful of cellular operators in countries including South Korea and Japan. The vast majority of carriers world-wide, including AT&T, use another technology called GSM.

Apple is developing a new iPhone to debut this summer and also appears to be working on another model for U.S. mobile phone operator Verizon Wireless. WSJ’s Julia Angwin and Simon Constable discuss.

With Apple developing a phone with CDMA capability, its exclusive U.S. arrangement with AT&T dating to 2007 appears set to end.

Verizon Wireless, owned by Verizon Communications Inc. and Vodafone Group PLC, declined to comment. An AT&T spokesman said: “There has been lots of incorrect speculation on CDMA iPhones for a long time. We haven’t seen one yet and only Apple knows when that might occur.” Apple declined to comment.

Separately, Apple plans to release a new version of its current iPhone this summer, continuing its practice of annual upgrades at about the same time of year, said people briefed on the matter. The model is likely to be thinner and have a faster processor, two people familiar with the device said.

For AT&T, the Apple relationship has been crucial, helping to make the carrier the U.S. leader in lucrative smart-phone market share. According to comScore Inc., AT&T has over 43% of all U.S. smart-phone customers, compared with 23% for Verizon. These customers are especially attractive because they generally pay higher monthly rates for data plans.

For several quarters, AT&T’s growth has come almost single-handedly from the iPhone. In the fourth quarter of 2009, the carrier said it activated 3.1 million new iPhones. In comparison, it counted only a net total of 2.7 million new subscribers as some customers moved from other phones to iPhones.

“You’re not going to lose the iPhone [exclusivity] and make up growth somewhere else without bearing the cost,” said Sanford C. Bernstein & Co. research analyst Craig Moffett.

Now that a new Verizon-compatible iPhone appears to be on the horizon, Digits looks at what Apple can do to win over mobile business users, particularly from RIMM’s BlackBerry market. Plus, WSJ’s Kate Linebaugh talks to Stacey Delo about Nissan’s new Leaf electric car and its $32,780 price tag.

The people briefed on the matter said the upgraded GSM iPhone is being made by Taiwanese contract manufacturer Hon Hai Precision Industry Co., which produced Apple’s previous iPhones. The CDMA iPhone model is being made by Pegatron Technology Corp., the contract manufacturing subsidiary of Taiwan’s ASUSTeK Computer Inc., said these people.

One person familiar with the situation said Pegatron is scheduled to start mass producing CDMA iPhones in September. Other people said, however, that the schedule could change and the phone may not be available to consumers immediately after production begins.

Representatives of Pegatron and Hon Hai declined to comment.

Verizon has publicly stated its interest in the iPhone, but people familiar with the situation said Apple originally decided against developing a phone for Verizon to keep its development process simple, since the technologies are incompatible.

Verizon also is upgrading its network to a higher-speed technology, so Apple has said it believed CDMA was a short-term technology. Apple later changed its mind as it realized Verizon’s upgrade would take longer than expected, said people familiar with the situation.

Making the iPhone available through Verizon, which has over 91 million customers, as well as potentially other CDMA carriers could open up a significant new market. In 2009, iPhone sales globally rose 83% to 25.1 million, far outpacing the 20% to 25% growth in smart phones sales overall, according to Bernstein. But since Apple already dominates smart-phone sales through existing partners, “sooner rather than later, Apple is going to have to look to find incremental distribution,” said Bernstein analyst Toni Sacconaghi. He estimates Verizon could help Apple nearly double the number of iPhone users in the U.S.

AT&T’s relationship with Apple, a lucrative deal arranged by Apple Chief Executive Steve Jobs, shows how such a partnership with other carriers could present challenges.

Analysts estimate AT&T pays Apple more than $600 per phone, but sells most of them for $199 or less. Heavy iPhone users have also put an enormous load on AT&T’s wireless network, pushing the carrier to a breaking point in some markets such as New York and San Francisco.

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Femtocell technology showing up in AT&T, Sprint, and Verizon plans

lesliemanzara — Tue, 23 Mar 2010 20:48:01 +0000

Stephen Lawson, IDG News Service, 3/23/2010

The tiny base stations may end up in Internet gateways, in businesses, and on the street, with adoptions by three major U.S. carriers

This week’s CTIA Wireless conference may be something of a coming-out party for femtocells, the tiny cellular base stations that can send voice and data traffic onto inexpensive broadband links, but the devices eventually may look different from what most people expect.

The Femto Forum will sponsor a special showcase on the CTIA show floor in Las Vegas and host a roundtable on Wednesday afternoon. The industry group will also give details of a “plugfest” being held next week in southern France to prove interoperability among femtocell equipment from different vendors. The Forum expects more than 20 manufacturers to participate, testing out gear that was built to standards adopted last April by the 3GPP (Third-Generation Partnership Project). If the vendors can prove interoperability, that will be a step toward letting carriers and network equipment builders mix and match technology from many vendors, potentially driving costs down and femtocell adoption up, said Simon Saunders, chairman of the Femto Forum.

Also this week, AT&T is expected to say it will offer femtocells nationwide after conducting trials in several states beginning last September. Sprint Nextel’s Airave device is already in full commercial deployment, and Verizon Wireless has said it plans to offer femtocells soon after it launches commercial LTE (Long-Term Evolution) mobile broadband service. Vodafone, NTT DoCoMo, and China Unicom also offer devices.

Though coverage complaints are as old as cellular technology, the recent explosion in mobile data use makes femtocells a timely innovation.

“For the iPhone users who are really frustrated over being dropped all the time, the femtocell may be the answer,” said IDC analyst Godfrey Chua.

Though about 60 carriers around the world are conducting trials of femtocells, there have only been nine commercial deployments, according to the Femto Forum. This is for a technology that some observers thought would be widespread before the end of 2008. But vendors and service providers have had a hard time figuring out how to price and market dedicated household femtocells for consumers, as well as facing technical problems that were bigger than expected.

Now, some vendors and industry analysts say it may be other types of femtocells that ultimately deliver on the promise of the technology. These may include femtocells built in to consumer Wi-Fi routers, ones that boost coverage inside medium-sized enterprises, and outdoor units that form the leading edge of LTE deployments.

A femtocell is smaller than a microcell or picocell, two types of base stations that are often used to boost coverage in buildings. It is also different because it has a built-in RNC (radio network control) element. Usually, RNCs are located in the carrier’s data center. Having an integrated one allows the femtocell to link in to any sort of wired broadband, such as a cable modem or DSL. The devices typically can cover about 5,000 square feet (465 square meters) and serve several mobile phone users in a household. The owner of the femtocell can create a “whitelist” of phones allowed on the device.

But making a femtocell talk to the handsets consumers already have, and with the carrier’s back-end mechanisms for billing and other functions, has presented challenges.

“Getting femtocells to work with existing sets of mobile phones was a huge task — much bigger than we expected,” said Will Franks, founder and chief technology officer at Ubiquisys, which supplies femtocell technology to carriers, including Softbank in Japan and SFR in France.

One problem is that femtocells use features that are included in cellular base-station standards but not typically used in traditional cells, Franks said. As a result, phone makers don’t design their phones to work with those features. For example, femtocells use “closed mode,” which keeps unauthorized phones from accessing the cell. In development testing, Ubiquisys found handsets would hang, unable to jump on to any signal. The software on most phones couldn’t be updated to add that feature, so Ubiquisys had to modify its femtocells to work around the shortcoming, he said. From now on, carriers certifying new handset models are testing them with femtocells, he said.

Femtocell maker IP.acccess, which confirmed it has been supplying technology for AT&T’s trial deployment, has run into similar problems. For example, the “whitelist” of phones allowed on a femtocell is based on users’ cell phone numbers and is supposed to update itself when a SIM card on one of the phones is replaced. IP.access found that femtocells didn’t do that, so handsets would mysteriously stop working with the femtocell, said Andy Tiller, vice president of marketing. Once the problem was discovered, IP.access automated the process. It was one of many small issues.

“There are 101 of those things that need to be worked through,” Tiller said. “It’s a lot more complicated than people thought it was going to be. You have to retune everything.”

Beyond the technical issues, service providers aiming their femtocells at consumers have to figure out how to sell a separate device that essentially delivers what the carrier has claimed to offer all along: adequate indoor coverage. There are many different possible models for selling femtocells. The problem is that offering the device points a finger at something negative — the carrier’s network capacity problem — and asks the customer to do something to solve it. Indeed, research results announced this week by the Femto Forum showed that about 60 percent of the economic value of a femtocell lies in what the service provider can save on infrastructure.

“It doesn’t sit right with a lot of people,” said analyst Jack Gold of J. Gold Associates.

The offerings vary. In the United States, Sprint charges $99.99 for its Airave unit, plus an “Enhanced Coverage Charge” of $4.99 per month. Optional unlimited calling plans cost $10 per month for a single phone or $20 per month for multiple phones sharing the Airave. When AT&T began the first test offering of its Microcell device in Charlotte, N.C., last year, it offered a choice of two pricing plans. Subscribers could simply buy the Microcell for $150, or pay $20 per month for unlimited domestic phone calls made through the device. The latter plan included a $100 rebate on the cost of the Microcell.

Carriers are already having some success, said In-Stat analyst Allen Nogee. In-Stat estimates there were 380,000 femtocells shipped worldwide last year and will be about 2 million units delivered to customers this year. “I think it’s gaining steam,” Nogee said.

However, the real opportunity for in-home coverage lies with femtocells that customers don’t even know are there, according to Nogee and other analysts. Two or three years down the road, the devices may be integrated into home broadband gateways or Wi-Fi routers, and the consumer will get better service without having to do or spend anything.

“For this to be successful, it has to align with a consumer electronics-like distribution model,” said analyst Phil Marshall of Tolaga Research.
Carriers may also take aim at stores and medium-sized businesses, using slightly more powerful femtocells, observers say. Large enterprises and big public facilities such as shopping centers often get expanded coverage with distributed antennas, but this is usually too expensive for an organization with fewer than 250 employees, Saunders of the Femto Forum said. As with consumers, femtocells can make prized business customers more loyal to a particular service provider, he said.

The small-scale base stations may also play a key role in building LTE networks. Putting LTE femtocells in subscribers’ homes could fill in enough coverage that a carrier could delay building some of its regular LTE cells, Saunders said. They could allow a carrier to delay the activation of 4 percent to 10 percent of the bigger cells, generating enough savings to cover the cost of household femtocells, he said.

Some vendors are also looking at LTE femtocells for public areas to fill in coverage or ease congestion. It would be relatively quick and easy to set up a femtocell on the street and plug it into existing broadband services instead of deploying conventional macro cell, said Franks at Ubiquisys. He estimates a cost-effective LTE version of these “metro” femtocells might hit the market in 2011 or 2012.

A new specification in the LTE standard, called SON (Self-Organizing Networks) should ease both of these types of deployments, said Steve Kemp, senior director of product marketing at Alcatel-Lucent. SON femtocells placed around a building or public area can find each other and optimize their own settings within that environment, saving expensive and time-consuming engineering work, Kemp said.

Though they have been a long time coming, femtocells could end up helping LTE reach users faster than today’s networks did.

“When 3G was slowly being built out, they didn’t have the benefit of femtocells to help fill in the coverage gaps,” IDC’s Chua said. Having them available from the dawn of the new network technology should make their inclusion that much easier.

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Smartphones not enough for carriers at CTIA

lesliemanzara — Sat, 20 Mar 2010 14:53:49 +0000

Sinead Carew, Reuters, 3/20/2010

Smartphones may be one of the hottest areas in technology with big names like Apple and Google tussling for share, but investors are questioning the growth prospects for mobile carriers as subscriber gains slow.

While it is true that clever devices like the iPhone or Android phones will boost demand for advanced wireless services such as video, games and mobile web, analysts worry that returns from such services cannot sustain revenue growth.

Mobile subscriber growth is slowing as about 90 percent of people in the United States already own cellphones.

Expectations for new subscribers are already lower than usual for the current quarter, which ends days after the March 23-25 CTIA wireless show in Las Vegas.

First-quarter subscriber additions typically tend be 5 percent to 10 percent lower than in the busy fourth-quarter holiday season. But this time, analysts see as much as a 15 percent drop in additions of monthly bill-paying customers, known as postpaid subscribers.

Against this backdrop, operators such as AT&T Inc and Verizon Communications Inc are expected to focus on advanced mobile services at the CTIA show. Carriers can charge smartphone users extra monthly fees for data services, such as Internet access and texting.

But analysts say that will not be enough to offset falling voice revenue and the cost of supporting data services.

“You can wave your arms about data all you like, but the reality is that the revenue growth for the U.S. wireless industry was only 2.6 percent by the end of 2009,” said Bernstein analyst Craig Moffett.

“It’s just not a growth business any more,” he said, forecasting a 10 percent sequential drop in postpaid subscriber additions industry wide in the first quarter.

Pacific Crest analyst Steve Clement expects a 10 percent to 15 percent drop saying, “Demand on the postpaid side has been pretty tepid.”

He said the weakness is partly due to the fact that operators themselves pulled some sales forward to the fourth quarter from the first quarter through particularly heavy promotions of smartphones like the Motorola Inc Droid.

CALL FOR TIERED PRICING

Another issue is pricing because Verizon Wireless, AT&T, Sprint Nextel Corp and T-Mobile USA have been discounting services to win customers from each other and to fend off Leap Wireless and MetroPCS Communications, which sell prepaid wireless services. Prepaid customers tend to switch carriers often as they do not commit to long-term contracts.

Carriers also have to spend to upgrade their networks in the face of heavy data use by smartphones and other gadgets.

Bernstein’s Moffett said operators may have to charge heavy data users more than today’s flat fees for unlimited mobile Web surfing. That way they could invest the extra fees in easing network congestion.

“We’re in a period of high demand and constrained supply for wireless data (capacity),” Moffett said “That should be a recipe for pricing power.”

But carriers have been hesitant because many consumers are still balking at paying $30 or more per month for unlimited data services. Thus, operators are not expected to announce any kind of tiered pricing structure at the CTIA show this year.

Some analysts say the launch of fourth-generation (4G) wireless services could be a good opportunity for carriers to introduce new pricing structures.

Clearwire Corp, which is majority owned by Sprint, is building a 4G network based on an emerging technology known as WiMax. Verizon Wireless, owned by Verizon Communications and Vodafone Group Plc, is also planning a 4G offering.

“That’s where we might see prices move somewhat higher,” said CL King analyst Lawrence Harris.

But other analysts are less sure, saying they don’t expect Sprint to lead the charge with higher pricing when it launches the U.S. market’s first 4G phone — HTC Corp’s Supersonic — expected to be unveiled at CTIA.

For 4G data card customers, Sprint now charges $59.99 a month for unlimited Internet access.

“That will be interesting to see how they price (services for) the Supersonic,” Harris said.

Headline speakers at CTIA include AT&T’s chief executive, Randall Stephenson, and its mobile chief, Ralph de La Vega, as well as Sprint CEO Dan Hesse and Clearwire CEO William Morrow.

Other speakers include Rene Obermann, CEO of T-Mobile USA’s parent Deutsche Telekom, and J.K. Shin, president of the mobile phone unit of Samsung Electronics.

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