U.S. wireless carriers Verizon Wireless and Sprint (News - Alert) Nextel Corp. have big plans for in-home service coverage using small, indoor base stations called femtocells. The two companies last week emphasized their commitment to femtocells during the CTIA (News - Alert) Wireless 2008 show.

 

Sprint began trialing the technology last year, and now offers femtocells in Denver, Indianapolis and Nashville, Associated Press reported. The company said when it began the trials that it planned to make the offering nationwide during 2008, but hasn’t yet announced specifics.

 

Service providers of late have become quite enamored with femtocells because they promise to make wireless service more appealing by improving indoor coverage. A femtocell is a small, cellular base station that connect to a broadband Internet connection (such as DSL or cable), extending wireless coverage indoors.

 

Since many customers are choosing to drop their landline or even VoIP phone lines in favor of carrying around a cell phone everywhere, the promise of better indoor coverage is pretty appealing. It’s also appealing to carriers who see an opportunity to boost revenues with value-added services that cost relatively little to deploy and manage. Reducing the traffic load on outdoor cell sites is another benefit for carriers.

 

In fact, carriers see so much potential benefit to femtocell deployments that they’re willing to subsidize the devices, AP said in its report. A big part of the appeal has to do with the cost of running networks.

 

For wireless carriers, using femtocells (as mentioned earlier) takes some of the traffic from outdoor cell sites and redirects it to home broadband connections. The result is that “the carrier doesn't have to pay to carry the traffic from the femtocell to its network,” AP said in its report. “‘Backhaul’ traffic, which runs calls from cellular towers to the wired network, is a major cost for carriers.”

 

The price tag attached to femtocells might prove prohibitive, though, or at least problematic. AP noted that current models run about $200 per, too hefty a cost for customers to realistically shoulder. Sprint, in fact, is already subsidizing a big chunk of that cost, offering femtocells for $49.99 each with a $15 per month service charge for unlimited calling.

 

Analysts also worry about potential for signal interference between femtocells and other in-home wireless devices.

 

AP noted that another U.S. carrier, T-Mobile (News - Alert), is taking a different approach: using Unlicensed Mobile Access (UMA) technology to offer “dual-mode” phones that can switch back and forth between WiFi connectivity in the home and cellular connectivity outdoors. (Home WiFi (News - Alert) routers are available for less than Sprint’s femtocells  — generally priced in the $20-$50 range —  and don’t require an additional service fee for use.)

 

Fundamentally, the excitement over femtocells originates from the trend toward one-phone users — people who want to be able to use the same handset no matter where they are, and to do so without paying an arm and a leg for service. Carriers surely will continue experimenting with different technologies until they hit upon one that is appealing enough to gain widespread adoption.