Parks Associates Blog

Tuesday, January 20, 2009

Verizon rolling out femtocells

Verizon Wireless is expected to offer femtocell products to its subscribers starting the 25th of this month. The product will likely be priced at $250 per unit without any contractual obligations. That seems to be a steep price to pay for just enhanced coverage. The details of what else would be included as a part of the femtocell purchase are not yet clear. If it is just better coverage and (possibly) unlimited calling for a monthly fee, I doubt VZ will get much traction with the initial offering. As we argued in our recent report on FMC, pricing is just as important as the value proposition in terms of feature set. The 'Basic' individual package with unlimited voice minutes is pegged at $99/month for individuals and $199/month for a family plan with two lines. Would ~$20 per month extra for the first year be attractive for consumers to invest in a femtocell? I would argue that Verizon needs to include more than just unlimited voice and coverage to make femto attractive.

On a side note, it is interesting to see that both VZ and Sprint support femtocells over un-managed networks i.e. broadband infrastructure that could potentially be managed by a third part. I would assume that quality of service would be a concern.

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