New devices boost home cell coverage

By Peter Svensson

updated 4:53 p.m. ET April 2, 2008

LAS VEGAS - As more and more people drop their landlines, the wireless industry faces a challenge: poor cellular coverage within the home.

To tackle it, they're looking at selling customers boxes that in essence give them cell towers within the home. To put it another way, the devices make their cell phones work like cordless phones, connecting to a home base station.

These so-called femtocells — "femto" is a scientific term for something very small — look much like Wi-Fi routers, which have become a common household appliance.

But are customers ready to bring another electronic box into the house?

Femtocell vendors at the CTIA Wireless industry show in Las Vegas this week say "yes" — because the devices solve a lot of problems for carriers.

"It's so much to their benefit to get these into people's homes that they're going to subsidize these things," said Paul Callahan, vice president of business development for Airvana Inc. The Chelmsford, Mass., company makes femtocells that are being tested by several carriers around the world.

Not only do femtocells improve coverage indoors, where the carrier has a hard time reaching, they reduce traffic on regular, outdoor cellular towers. Perhaps best of all, the carrier doesn't have to pay to carry the traffic from the femtocell to its network, because the device plugs into a home broadband connection. The so-called "backhaul" traffic, which carries calls from a cellular tower to the wired network, is a major part of the cost of operating a wireless network.

Airvana reports tremendous interest from carriers, yet few of them are talking publicly about femtocells.

Sprint Nextel Corp. is the only carrier that is conducting more than a small trial with the technology, but even it is only selling them in Denver, Indianapolis, and Nashville, Tenn. They cost $49.99 to buy; another $15 a month gives a customer unlimited calls from the home.

Sprint spokeswoman Emmy Anderson said customer feedback has been positive and there haven't been any issues with interference between the femtocells and towers. When it launched the program last year, Sprint said it was planning to take the offer nationwide this year, but it hasn't announced any specific plans to do so.

One holdup has been that early femtocells, like those Sprint is using from Samsung Electronics, don't support the data speeds of third-generation cellular networks. But Airvana, Samsung, Motorola Inc. and Alcatel-Lucent all showed 3G femtocells at CTIA Wireless.

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