Femto Vendor Lands $28M

Femtocell vendor RadioFrame Networks Inc. has swept up $28 million in Series F equity and debt financing, bringing the total amount of funding the company has raised since 2001 to $100 million.

Plainfield Asset Management joined existing backers Ericsson Venture Partners , Ignition Partners , and VantagePoint Venture Partners in the latest funding round.

CEO Jeff Brown tells Unstrung that the money will be used to further develop its femtocell products that will support GSM, WCMDA, and so-called 4G technologies Long-Term Evolution (LTE) and WiMax.

RadioFrame's revenues come mainly from its iDEN and GSM picocell businesses. Nokia Siemens Networks resells RadioFrame's picocells. The vendor is also different from other femto vendors because it designs its own silicon. (See RadioFrame Pumps Up iDEN, Orange Uses RadioFrame Pico, and TeliaSonera Tackles Indoor Coverage .)

Now, with the new funding the femto maker can turn greater attention to rolling out its new femtocells. Brown estimates that its 3G femtocell will be available by the end of this year and says: "You'll see our products offered by operators in Q1 or Q2 next year."

RadioFrame's femto route to operators is through its partnership with Nokia Siemens as one of the vendor's several femto CPE providers. (See NSN's New Femtofriend and NSN, RadioFrame Team.)

Brown says that the relationship with NSN is good and that he wouldn't want to change anything about it, but he hasn't ruled out bringing out a gateway product to offer a more end-to-end solution to operators.

"We may bring out our own gateway and we're not ruling that out... We've worked on the pieces of that," says Brown. "We don't have a plan to productize that in the future. We're familiar with the realities of the world, which is probably why we haven't productized our own gateway."

In other words, bringing out a gateway product would mean that RadioFrame pits itself against the likes of Alcatel-Lucent (NYSE: ALU), Ericsson AB (Nasdaq: ERIC), and Nokia Siemens.

A new Heavy Reading survey of 79 operators -- "Femtocell Deployment and Market Perception Study" -- finds that the top criteria operators have when considering femtocell suppliers is core network and systems integration capability; technical support; and home gateway capability. "Ability to supply end-to-end solutions" also scored very highly as a key capability. The survey also asked operators to rank femto vendors. (See 2010: Year of the Femto.)

For example, operators ranked Ericsson second after AlcaLu among large vendors, and the Swedish vendor doesn't even make a 3G femto yet. (See Ericsson Stalls on 3G Femtos and Femto Chips Too Costly.)

LTE yes, WiMax not sure
RadioFrame recently introduced a new chip that would support so-called 4G technologies LTE and WiMax, but Brown says the jury is still out on whether the company will produce a WiMax femtocell, in spite of Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s plans for the devices. (See Comcast Goes for WiMax Femtocells.)

"We're very comfortable with the LTE side," says Brown. "We haven't committed to WiMax fetmocell, but if you ask if I think we will, then yes."

Brown says that there's some "discussion" around Comcast, which revealed that it plans to deploy femtocells in a dedicated 5MHz of spectrum as part of the new Clearwire deal. He also points out that Craig McCaw is one of RadioFrame's investors and says that there's "probably a pretty good opportunity for us to work together in future." (See Clearwire: We'll Kick LTE's Butt, Can Clearwire Do It?, and Sprint: 4G & M&A Still Unclear.)

Brown said a 4G femto was a "2010 deliverable for us."

— Michelle Donegan, European Editor, Unstrung