Femtocells – whose buying it?

The UK has a very unusual population distribution which makes it a nightmare for a mobile operator to plan their wireless coverage. Brits in the countryside, live in little clusters of villages and between those villages are a scant number of homes & businesses.

Like any mobile operator, Vodafone has focused on improving signal coverage where the people live. So if you happen to live down a quaint country lane in a wee bit of forest, odds are you probably aren’t ‘top of mind’ for Vodafone to increase cell coverage. The ‘net result is you likely have awful service, the classic “I’ve only got 1 bar”. So missed calls or disconnects are apt to happen.

Earlier this year, Vodafone announced their femtocell offering, Sure Signal, which looks like a typical consumer box, which you plug into your home router, set up your mobile phones to be recognized by it (a security feature) and bang, you’re likely gonna get 5 bars of service. Vodafone will sell you the Sure Signal box for ~ $75.

Now the reality is, if you’re using Sure Signal, you’re likely saving Vodafone a ton of money as they don’t have to worry about building wireless infrastructure to reach you. The Sure Signal box actually costs more than $75, so Vodafone is subsidizing a bit of the price, but hey they’re saving money, likely locking you as a customer and the ‘net is you’re likely to make more phone calls (all at the regular rate) using your own Internet connection.

Clearly, Sure Signal will immediately appeal to those remote users who have had consistent poor service from all providers and $75 is a small price to pay to get reliable service. The bigger question is how many of these users exists and how many are willing to pay $75? My guess is not lots. Those that felt the pain likely purchased Sure Signal the first week it was available.

Switch to central London, you’d expect Vodafone to have covered every nook n’ cranny of the city with 5 bars of service and the odds of you pay $75 to make your service work where you already expect it to work are very low. Vodafone has done a good job in both the pricing and packaging of Sure Signal, likely making a number of unhappy user happy and perhaps even attracting some new subscribers, but this is clearly a niche solution at best.