AT&T Trials New Femtocell Business Model: Offer it for Free
Posted by Jesse Ward on Monday, July 12, 2010 · 
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Over the weekend, reports surfaced in tech blogs Engadget and Gizmodo that a select handful of the AT&T’s “most valuable customers” received letters in the mail announcing that they qualified for a free 3G Microcell. Engadget updated the post this morning, saying that AT&T is experimenting with new femtocell offerings. Might this breathe new life into femtocell technology?
For those of you who are unfamiliar, AT&T’s 3G Microcell is a femtocell device which routes traffic — wireless phone calls and data connections — across a customer’s wired broadband connection. This solution is designed to increase coverage for customers with spotty service, and ease cellular network congestion by offloading traffic from the towers to the customer’s broadband provider.
AT&T launched the 3G Microcell nationwide back in April. The device retails for $150. Calls made from the Microcell still use wireless plan minutes, unless you opt for a dedicated “companion rate plan” and pay an additional $19.99 a month to make unlimited calls. AT&T attempted to sweeten the deal by offering a $100 rebate good for the purchase of the device when a customer signs up for the unlimited calling plan. Additionally, existing AT&T broadband customers can receive an extra $49.99 rebate, which essentially makes the femtocell free.
Despite the promotions, AT&T has not generated significant customer interest. Likewise competitors Sprint and Verizon, which also have femtocell services, have struggled to develop a winning business model which benefits the carrier and also attracts customers. Critics argue that customers will not pay an additional fee for a device which corrects the service provider’s failure to offer reliable coverage in their homes.
A recent Parks Associates survey offers femtocell providers some encouragement. According to Parks, more than half of U.S. broadband households with mobile phones are interested in femtocell benefits, and are willing to pay for the devices and associated new services. The survey found that fewer than 10% of consumers were previously familiar with femtocells. However, once they were educated about a femtocell and its benefits, 56% of respondents found the technology appealing, and 72% said they would be interested in at least one advanced femtocell service, such as virtual home number that rings to every cell phone in the home.
“The findings also indicate femtocells can significantly improve subscriber satisfaction and lead many households to consolidate with a single provider,” Parks noted.
For now, I think the jury is still out on whether consumers will embrace this nascent technology.
For more on femtocells, see NTCA’s ePapers.
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Let me see … I have to pay for the femtocell device, I have to pay for my broadband bandwidth, any cell phone traffic routed through my broadband still counts against my monthly plan. So this benefits me how?
Cell phone companies get greedier by the day …
Give me an incentive such as some added feature, at no extra cost, or discount my plan for the fact that I am saving you the expense of having to upgrade your network. Then we can talk a deal.