Femtocell versus Wi-Fi

Rethink Research has published an interesting article relating the new Wi-Fi voice certification to the outlook for femtocells.

The idea of the article is that voice over Wi-Fi for cell phones is competing with femtocells, and that femtocells may win out. The article distinguishes between business voice and consumer voice, saying that service providers see femtocells as “an important stalking horse for greater control of corporate customers. ” This gives a hint of why femtocells may be unattractive to businesses: many of them would rather not yield this control.

Consumer voice service is controlled by service providers. They have three options in this space: do nothing, deploy femtocells or deploy Wi-Fi. Do nothing is the obvious best choice, since neither of the other options carries a revenue upside. But poor coverage in a home discourages usage and risks cancellations of subscriptions. So in areas of poor coverage something like femtocells or UMA (voice over Wi-Fi) is attractive to service providers. For both technologies the service provider subsidizes the wireless router, but femtocells will remain more expensive than Wi-Fi routers because of their lower sales volumes, so Wi-Fi is more attractive on this count. But UMA requires phones with Wi-Fi, while femtocells will work with any phone in the service provider’s line-up, including legacy ones. So the customers’ experience of femtocells is better – they can choose or keep the phone they want and still get improved coverage at home. This benefit of femtocells clearly outweighs the marginal price advantage of Wi-Fi routers. Femtocells may help subscriber retention in another way: a Wi-Fi router is not tied to any particular cellular service provider, while a femtocell only works with the carrier that supplied it.

The situation in businesses is different. They generally prefer to control their own voice systems, which is why they have PBXs. But a substantial number of business calls are now made on cell phones, even on company premises. These calls don’t go through the PBX, so they are not least-cost-routed and they are not logged or managed by the IT department. Femtocells don’t fix these problems, but Voice over Wi-Fi does. Not service provider Voice over Wi-Fi, like UMA, but SIP-based Voice over Wi-Fi from companies like DiVitas and Agito. What about phone choice though? Won’t corporate customers be stuck with a limited choice of handsets? The answer is yes, only a limited number of phones have Wi-Fi: less than 10% of those sold in 2008. But in the category of enterprise smart phones, like the Nokia Eseries and Blackberries, the attach rate of Wi-Fi will soon be close to 100%.

So femtocells are a good way for service providers to remedy churn caused by poor residential coverage for consumers, but Wi-Fi may be the better option for businesses that want to regain control over their voice traffic.

Agito and Cisco Motion

Agito Networks was in the news recently as a part of Cisco’s Motion announcement. I have mentioned Agito a couple of times before in this blog. Like DiVitas it offers PBX-agnostic enterprise-based fixed-mobile convergence.

One of Agito’s unique technical claims is that it employs location based technology as one of the factors to determine the handover between Wi-Fi and Cellular (and vice versa).

The RoamAnywhere Mobility Router adds the element of location awareness to solve the challenging problem of routing between multiple networks.

From the Agito website

The Mobile Intelligent Roaming component of Cisco’s new Mobility Services Engine (MSE) also uses location as one of the factors (the other are signal strength and signal quality) to determine when to hand off between networks. This incorporation of location awareness into the MSE’s handover recommendation appears to weaken Agito’s claim to uniqueness in this respect, so why is Agito so enthusiastic about the MSE?

The MSE boils down an assortment of metrics related to handover decision-making to a simple binary message – link-up or link-down – which it sends to a third party eFMC controller like the Agito RoamAnywhere Mobility Router. The message is a recommendation, not a command, but since the MSE sends just this binary event, rather than any of the metrics that go into it, Cisco seems to be claiming responsibility for the decision about when to hand over.

Rather than simply obeying the link-up or link-down event by changing networks, the Agito mobility router takes these events as triggers to run its own handover-decision algorithm, using metrics gathered by the handset. This makes sense for several reasons. First, the Agito location determination mechanism is more precise for this particular application, since it knows when it is going through a doorway, whereas the Cisco location mechanism has a more general idea about the perimeter of the building. Second, the entire Agito handover-decision algorithm has to be maintained regardless of how good the MSE is at making the decision, because in many places there is no MSE (at home, in public areas, in buildings with non-Cisco networks and in buildings with Cisco networks lacking an MSE).

So Agito views the information from the MSE as a mere additional factor for its handover decision-making, rather than a substitute. On the other hand, Cisco’s marketing program around the MSE is a huge benefit to Agito.

Even though this part of the MSE will not be released until later this year, Agito’s Mobility Router works fine without it; the Cisco Motion announcement has led to a burst of interest in Agito from Cisco’s channel partners. According to Cisco, it has 65% share of enterprise Wi-Fi infrastructure, so Pej Roshan, Agito’s V.P. of marketing, anticipates that the relationship will “slingshot us to the next level of sales and customers.”