Amongst all the news (and some would say hype) about Fixed Mobile Convergence, there is another market dynamic being played out which may lead to an alternative form of change. Fixed-to-Mobile Substitution (or FMS) aims to increase the proportion of calls made from traditional 2G/3G mobile handsets at the expense of those made from other devices such as fixed lines or dual-mode (or converged) handsets.
In reality this is a trend started by consumers themselves who, attracted by falling mobile call rates, have begun to use their mobile phones for all their voice calls whether they are outside of or within their homes. This substitution effect is most noticeable (for fixed line operators) amongst new users (i.e. in new households) who are often opting not to have a fixed line phone installed at all.
This is seen by many as being a potentially huge threat to the revenues of fixed line operators. For example whilst about 6% of homes in the UK are "mobile only", in Finland, where the effects of FMS have been particularly marked, the figure is closer to 30% leading to a sizable reduction in fixed line revenues. Obviously mobile operators, with an interest in underpinning their own revenues, are motivated to foster the success of FMS and have shown interest in any technology which enables this. The most significant of these is referred to as the Femtocell.
Femtocells are small "in building" 2G/3G access devices (similar in size to a wireless access point). They connect, on the radio side, to a standard mobile phone and, on the network side, to a users broadband connection and have the advantage of providing excellent mobile coverage within the home as well as low cost calling (via IP backhaul).
Earlier this week some of the big players in the Femtocell market announced the formation of a consortium of their own to "advance the development and adoption of femtocell products and services". Founding members of the Femto Forum include Airvana, ip.access, Netgear, Ubiquisys and picoChip (among others) with other members likely to be announced over the coming months.
The creation of the Femto Forum comes at a time when Femtocell products are just beginning to hit the market. Nokia Siemens Networks have, only this week, announced a 3G Femto Home Access solution which will begin trials at the beginning of 2008 and will be deployed later the same year. Ericsson announced a similar Femtocell product early this year which may become available later in 2007.
As our love affair with mobile telephony continues to move from strength to strength, it's just possible that we could see Femtocell technology becoming as commonplace as wireless access points are today. And, if the Femto Forum works its magic, it could happen sooner than we think !


Paul Tingey is a System Architect with Wind River in the UK. He works within the Alliances team to strengthen the bonds between Wind River's products and those of our strategic silicon and hardware partners. Paul's professional interests include Carrier Grade Linux, AdvancedTCA and other standards-based Telecommunications technologies.



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