Wi-Fi enabled handsets may have to compete with femtocells

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18 October 2006 News

In 2011, shipments of dual-mode (cellular/voice over Wi-Fi) wireless handsets will be well in excess of 300 million worldwide, according to a new study from ABI Research. However, the arrival of femtocell access points towards the end of the study's forecast period may prove disruptive for the market.

According to senior analyst Philip Solis, handsets based on the 802.11n protocol will outnumber those of other protocols in those 300 million shipments. Why? "Cellular handset vendors have made sure that their voices have been heard in the 802.11n standards process, so they are getting all the optional features that they want."

Solis adds that smartphones saw the earliest introduction of the Wi-Fi mode, but because of UMA (and later SIP-based) solutions, Wi-Fi will make its way into 'enhanced' (or 'feature') phones relatively quickly. Mobile operators are looking to UMA, but telcos and other players in the market are more interested in SIP-based solutions.

Wi-Fi enabled handsets, however, may have to compete with the upcoming opportunity of femtocells, the new, small cellular base stations designed for use in residential or corporate environments. Like Wi-Fi access points, they connect to the customer's own broadband connection. Their lure is of greater network efficiency, reduced churn, better in-building wireless coverage, and the abilities to shape subscriber data usage patterns and to build platforms upon which fixed-mobile convergence services can be realised - essentially the same reasons for using Wi-Fi-enabled handsets.

"As frequency re-use issues are resolved, femtocells will provide some counterbalance to the trend towards dual-mode handsets," notes Solis. "Some operators now believe that they do not need to subsidise more expensive Wi-Fi-enabled handsets; they can use the handsets they have, and put femtocells in the home."

That would certainly slow down the VoWi-Fi market's momentum, but UMA is moving forward nonetheless. Solis concludes: "It is all about who controls the customer. Mobile operators can use UMA to keep the customers who want to use cheaper wireline minutes. It is good for the end-user and it is good for the operator, because it uses the customer's own broadband connection to backhaul the traffic to the core network."

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Wi-Fi enabled handsets may have to compete with femtocells

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