I'd expect AT&T to sell the femtocells at a substantial discount to customers who agree to a multiyear service plan -- especially since it appears that the femtocells might reduce the load on AT&T's primary network infrastructure. That's because calls would be connected to AT&T's network via your existing broadband Internet service such as DSL or cable, the company says. So it makes sense that the cost were picked up by the carrier, instead of the customer. Such a strategy would likely help retain some percentage of the customers who would otherwise run into the waiting arms of Verizon.
Sprint and Verizon are already selling femtocells; Sprint charges $99 for the Airave, while Verizon's goes for $250. But don't think that Sprint is offering a great deal. Along with the hardware charge, customers have to cough up an extra $4.99 a month for the privilege of using a piece of hardware that is designed to patch holes in the service they already pay for. I call that a sneaky fee, and it really ticks me off. (The telecom industry is not at all shy about looking ways to charge you more for less, as my colleague Galen Gruman recently outlined.)
Femotocell technology is unproven
Femtocell technology is just starting to gain traction. Last year, there were only 380,000 femtocells shipped worldwide, says In-Stat analyst Allen Nogee. But he estimates that some 2 million units will be delivered to customers this year.
Typically, the devices can cover about 5,000 square feet and serve several mobile phone users in a household. The owner of the femtocell can create a whitelist of phones allowed on the device. But making a femtocell talk to the handsets consumers already have and work with the carrier's back-end mechanisms for billing and other functions has presented challenges.
"Getting femtocells to work with existing sets of mobile phones was a huge task -- much bigger than we expected," said Will Franks, founder and chief technology officer at Ubiquisys, which supplies femtocell technology to carriers, including Softbank in Japan and SFR in France.
There may also be a health question. I have never been convinced that cell phone and other radio-type frequencies pose a health hazard, but responsible people have raised questions about a possible link to cancer. How safe is it to have a femtocell transmitter in your living room? I don't know, but it's worth some thought.
There you have it. Instead of biting the bullet and repairing its network, AT&T is passing the burden on to its customers by selling a piece of hardware that may or may not fix the problem and may or may not be safe. What do you make of that business plan?