T-Mobile in No Rush for Femto Launch

Vodafone UK 's surprise femtocell service launch announcement yesterday won't force T-Mobile International AG 's hand to launch a rival service in the U.K. or in any of its markets, Unstrung has learned.

The German giant is sticking to its femto guns and does not feel compelled to take on the largest mobile operator by revenue with a commercial home base station service of its own, simply because Vodafone was first to market in Europe.

"We won't be pushed by that announcement," said Klaus-Jürgen Krath, T-Mobile's senior VP of radio networks engineering, speaking on the sidelines of the Femtocells World Summit in London today. "Let's see how they do in the market...

"There is not any firm launch plan that I can disclose now," he added.

T-Mobile has been busily testing and investing in femto technology for the last few years, but the operator maintains that there are still technical and marketing issues that need to be resolved before a consumer mass market solution is possible.

T-Mobile is a strategic investor in access point vendor Ubiquisys Ltd. and femto chip startup Percello Ltd. (See T-Mobile Backs Femto Chip Startup and T-Mobile Invests in Femto Firm.)

Krath tells Unstrung that it has trialed the femtocells not only from Ubiquisys but also from Airvana Inc. (Nasdaq: AIRV) and Huawei Technologies Co. Ltd.

The operator recently extended its trial in Germany and is using Huawei and Ubiquisys access points in some T-Mobile retail shops where coverage is lacking, which is not a good thing when sales staff are trying to demo the new 3G iPhone, for example. (See MWC 2009:T-Mobile Preps Femto Launch and T-Mobile Trials Femtos.)

But the operator remains cautious and has some big reservations about the little home base stations, even though it recognizes that they represent a potential cost-effective way to make the 3G network more efficient by offloading data traffic onto the femtocells.

"We're concerned about the increasing growth of data in terms of scaling to make the networks more efficient," says Krath. "Capacity offload may help us to reduce costs.

"Can we convince the customer to buy the femtocell at home, of course not telling him that we want to offload the data traffic and make our network more efficient?"

On the other hand, he suggests that it may even make sense to give the femtocells away for free to heavy data users, because the operational cost savings might make that scenario worthwhile.

"As soon as traffic reaches certain limits, then the femtocell, without the customer paying for it, may be a good solution for operators."

Among the challenges that Krath says need more work include interference with the macro network, although he notes that trial partner Ubiquisys is "one of the most advanced guys in interference and mitigation" techniques. Other issues that need attention, according to Krath, are device battery lifetime, service outages and dropped calls, and the quality of the broadband link.

Krath says that femtocells are a "great technology, great product, and great idea." But despite that endorsement, T-Mobile has not made commercial launch plans yet.

"We don't want to damage our quality perception by throwing femtocells out there, and our marketing folks have to think about the right proposition... We want to do it right. We'll do our homework first -- on technology and the marketing side -- before we do any launch plans."

— Michelle Donegan, European Editor, Unstrung