Airvana: 'Betting the Farm' on Femto

Wireless infrastructure firm Airvana Inc. (Nasdaq: AIRV) says it is "betting the farm" on femtocells in 2009 as it signs another supply deal around home base stations, this time with Hitachi Ltd. (NYSE: HIT; Paris: PHA) in Japan. (See Hitachi Picks Airvana Femto.)

The agreement will see Airvana supply Hitachi with its HubBub CDMA femtocell, which can support both voice and data through its CDMA 1xRTT and EV-DO connections. Airvana isn't saying which carrier in Japan might use the box, but KDDI Corp. , the country's major CDMA player, looks like a strong prospect.

Chelmsford, Mass.-based Airvana has already signed similar supply or development deals with other major network infrastructure players such as Alcatel-Lucent (NYSE: ALU), Nokia Siemens Networks , and Thomson S.A. (NYSE: TMS; Euronext Paris: 18453). (See AlcaLu Teams for 3G CDMA Femtocells and Airvana Talks 4G & Femtos.)

"We're betting the farm on the market," Paul Callahan, VP of business development at Airvana tells Unstrung. The 500-person company will spend a total of $80 million on research and development, and Callahan says that 60 percent of that is going toward femtocell technology.

The company is slightly different from many others trying to crack the home base station market, in that it is developing both UMTS and CDMA boxes and pushing ahead with voice and data support straight out of the gate.

Airvana's main rival in the mini-CDMA field is Samsung Electronics Co. Ltd. (Korea: SEC), which already has its Airave box in use at Sprint Nextel Corp. (NYSE: S) and possibly in tests at Verizon Wireless . Some analysts, however, expect that Verizon could also have its eye on Airvana's gear. (See Verizon Eyes Femtos for 2009.)

Competition is bit tougher on the GSM/UMTS side of the fence, involving everyone from established players such as Ericsson AB (Nasdaq: ERIC) to well funded youngsters like RadioFrame Networks Inc. and ip.access Ltd. (See Vendors Unite on Femtocell Architecture.)

Readers familiar with Airvana, however, will spot that although the technology is new [ed. note: sorta] the company's strategy for entering the market is the same as it took with 3G CDMA infrastructure: Partner with the big boys and gals and supply them with the technology that carriers end up using in their networks. (See 2010: Year of the Femto and Trying to Do the DO.)

Plus ça change...

— Dan Jones, Site Editor Unstrung and Michelle Donegan, European Editor, Unstrung