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1、PointofViewFemtocells:ImplementingaBetterBusinessModelToIncreaseSPProfitabilityAuthorsWilliamGerhardtRichardMedcalfMarch2010CiscoInternetBusinessSolutionsGroup(IBSG)CiscoIBSG©2010Ciscoand/oritsaffiliates.Allrightsreserved.PointofViewFemtocells:ImplementingaBetterBusinessM
2、odelToIncreaseSPProfitabilityToday,manycellphonecustomersexperiencepoorsignalqualityathome.Movingfromroomtoroomtoavoidmissedwords,droppedcalls,orwebtimeoutsisnowacommonoccurrence.Toaddressthisproblem,manyserviceproviders(SPs)haveintroducedwhatarecalled“femtocells”—smallwi
3、relesstransmittersthatallowcellphoneusageinhomesto1flowoverexistingbroadbandconnectionssuchasDSLorcable.Femtocellsrepresentthenextgenerationofcoveragebygivingcustomersapersonalcelltowerdedicatedtodeliveringamuchbettermobileexperienceinthehome.Overthepastfewyears,femtocell
4、shavemovedfromthelabtofieldtrials,andmorerecently,tocommercialrollouts.SprintwasfirsttomarketafemtocellintheUnitedStates2withthecompany’sAIRAVEproduct.VerizonWirelessandAT&Tsoonfollowedwith34launchesofNetworkExtenderand3GMicroCell,respectively.InEurope,Vodafonehas5reintro
5、duceditsfemtocelloffering,nowcalledSureSignal.Inaddition,StarHub’s6HomeZonewasthefirstfemtocellproducttoberolledoutinAsia.Despitebroadindustrysupport,marketreceptionforfemtocellshasbeendisappointing.Thisissurprisingsince,onthesurface,femtocellsofferbenefitstobothSPsandcon
6、sumers.ForSPs,femtocellspromisetoreducenetworkcostsandimprovebusinessmetricssuchascustomerretentionratesandaveragerevenueperuser(ARPU).Forconsumers,femtocellsofferlowermonthlycostsandabettermobileexperienceathome.So,whatishinderingadoption?CustomerResistanceFemtocelloffer
7、ingshavebeenbasedonwhattheCiscoInternetBusinessSolutionsGroup(IBSG)callsthe“ConsumerPull”model.ThisiswhereSPsaskconsumerstoinvestinthefemtocelldeviceand/orpayarecurringmonthlyfee.Unfortunately,therecentrecessionhaschangedconsumerbehaviortothepointwherecustomersarenotwilli
8、ngtospendmoremoneytoreceiveadditionalservices.CiscoIBSGhasobservedthatthereisanimpliedlimittothe
