Why AT&T should buy you a femtocell

Femtocells, network widgets that ease the problems that many suffer trying to use their mobile phone at home, are going to be selling like hotcakes soon.

But here's what I'm thinking. You shouldn't have to buy yourself a $150 femtocell. They should be coming with your next-generation mobile phone--for free.

Let me explain.

Don't feel bad if you haven't heard of a femtocell. But don't be surprised if you hear more about them soon, because they're a hot item. Market research firm iSuppli forecasts unit shipments to grow from 571,000 in 2009 to 1.9 million in 2010--and to continue surging to 39.6 million by 2013.

Femtocells are small, lower-power radio transmission stations that provide a 3G network connection to your phone. They plug into your home broadband network. AT&T has begun selling them in the United States, Vodafone is doing so in the United Kingdom.

Here's the beauty of femtocells. They deliver mobile phone network capacity very precisely to the people who need it.

All of you folks who complain about dropped calls and slow network speeds on your iPhone, pay attention. Even if you don't have your own femtocell, somebody nearby who does is one more person freeing up a communication channel on the nearest cell phone tower.

The hardware isn't free, of course, so carriers can be forgiven for the lack of excitement about the idea of giving them away. But it's a matter of comparison: carriers already are faced with tremendous, never-ending costs to build and upgrade their mobile phone networks, and when those networks fall short, they suffer dissatisfied customers and churn as those customers leave for the competition as soon as their contracts expire. Femtocells can deliver capacity quickly to the painful patches on the network coverage maps, distributing communications duties more evenly and targeting the loudest complainers.

Cell towers, in contrast, take forever to approve, cost a lot to build, and are expensive to maintain. And even under the best of conditions, it can be tough to get a signal into buildings.

Femtocells of course also can be--and are--installed at work locations, too, helping out with business phone traffic. Here, too, there could be incentives for carriers: use us for your corporate mobile account, and we'll give you femtocells.

Naturally, if you're paying for you own femtocell, you might feel proprietary about it, which is why they come with features to keep your neighbors from sponging off your network.

But this, too, is backwards thinking. The carriers should be encouraging your neighbors to use your femtocell. Again, it's all the more network capacity they don't have to route through the cell towers. And if the carriers were paying for the femtocell in your home, you wouldn't feel so proprietary about sharing the network.

Granted, it's your broadband connection they'd be degrading by playing Farmville on their iPhones. But again, if your carrier is buying you a femtocell, you'd probably be coming out ahead.

Of course femtocells cost money, and carriers can't be excited about spending it. They could, though, be selective about awarding the accounts issued femtocells. For example, femtocells could only go to people who pay for new phones with unlimited data plans, or to those in heavy-traffic areas where dropped calls are a problem. They could even be built into wireless network routers supplied with broadband service as a perk for those who buy premium broadband subscriptions from those same carriers.

There are plenty of hurdles. Regulatory matters might intrude, particularly where radio-frequency interference is an ongoing issue. Femtocells stop working when the power goes out. Upgrades to 4G would incur new expenses. And the complicated system of handing off a phone connection from one cell tower to another when people are on the move gets even more complicated with femtocells.

But even with these issues, femtocells hold promise as a way to ameliorate the worst mobile phone congestion problems.

Some people with poor mobile phone connectivity might be thinking spending the money is worth it for improved coverage. The way I see it, though, is that we're already paying mobile phone network operators plenty for our subscriptions, and it's up to them, not us, to fulfill their promises.