FT Preps Femtocell RFP

France Telecom SA (NYSE: FTE) says it's launching an RFP (request for proposal) for 3G femtocells to scope out the costs and management issues of deploying the home base stations across its markets.

But the operator says current femtocell products, which provide mobile coverage over a very localized area, are too immature for it to place large volume orders this year.

"We've been working with vendors for two years now," says Bruno Dachary, 3G consumer launch director at France Telecom's subsidiary, Orange SA , speaking on the sidelines of the International Conference on Home Access Points and Femtocells in London. "[Femtocells] are not mature."

For the RFP, the operator will provide details of what it calls several "image networks," to analyze the costs of deploying and managing 3G home base stations in different network scenarios.

France Telecom wants to figure out the costs of rolling out femtocells in a small country with small volumes, in a medium-sized country with larger volumes, and a large country with very large volumes.

The carrier, which plans to rent femtocells to consumers in order to retain complete control of the devices, doesn't envisage the devices being offered through retail channels in the same way as WiFi home routers: It views home base stations as further extensions of its wide-area network that need to be managed in the same way as its macro mobile base stations.

Dachary says he is amused to hear vendors position femtocells as consumer devices like WiFi or DSL modems. "No way!" he says. "These are operator products, delivered by the operator because we own the 3G frequency. We will have to install it and maintain it for the customers. We have to manage it."

He adds: "Consumers are not mobile operators. How can the consumer be the owner of that kind of equipment?"

Dachary says the current 3G license conditions also create a significant barrier to retailing femtocells. Every time an operator adds a Node B (base station) to its network, it has to notify the regulator, he explains. "It's mandatory in the license."

So, France Telecom plans to retain ownership of its femtocells. "We will work with a limited number of vendors," says Dachary. "We will buy the equipment at a cheaper price and propose it to consumers with a rental proposition."

Bruno says the "main bet" for femtocells is dedicated coverage for heavy mobile data users. The other business case scenario is to capture an entire household's telecom spend. "With a product at home, it will be obvious for the family to move with a single broad solution from a single vendor, hopefully Orange."

But Bruno says he doesn't expect to see "mature" femtocell products until 2008. He says the first available products are not ready for "massive launches" and have "limited features."

For France Telecom, femtocells will fit into its fixed/mobile convergence (FMC) strategy alongside plans for IMS and its dualmode GSM/WiFi unlicensed mobile access (UMA) service, Unik. By the end of June, Orange had sold more than 300,000 Unik handsets, and 200,000 customers have signed up to the Unik service.

But Bruno says the biggest weakness of Unik is the limited number of handset choices. Orange offers two handsets and will introduce 10 more devices by the end of the year.

With a femtocell, users can use their existing 3G handsets.

And plans for IMS, although delayed, are still in the cards at France Telecom. Light Reading reports that the operator is close to finalizing its supplier shortlist. "We were expecting to launch something [with IMS] by the end of this year," says Bruno. "In terms of features and the customer experience, it's not as good as UMA. And the handsets are very expensive." (See Ericsson, Others Top FT's IMS Shortlist.)

News of France Telecom's plans comes as Nokia Siemens Networks announces the launch of its 3G femtocell, which will be available for trials by the beginning of 2008. (See NSN Intros 3G Femtocell.)

France Telecom isn't the only carrier scoping out 3G femtocells: Japanese giant Softbank has engaged a number of vendors in its proof-of-concept trials. (See Softbank Trials Femtocell, Softbank Demos Moto Femtocell, Sonus Joins Softbank Demo, Netgear, Ubiquisys Team, and Ubiquisys, Softbank Demo .)

— Michelle Donegan, European Editor, Unstrung