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Want Loyal Subscribers? Give Them Femtocells

Femto Hub Blog (Jun 5 2009)

Categories:
Hot Topics: 4G, Applications, Network, Standards
Regions: Americas, Asia-Pacific, EMEA
More: Femto Events, Market Research
Value Chain: Enabling Technologies, Femtocell Specialists, Network Equipment Vendors, Operators
Other: Jobs, Misc

  1. By Amit Jain

    Mobile subscribers today have few reasons to be loyal to their service providers.  Phone numbers are portable in most countries today and as analyst Dean Bubley recently argued on his blog, mobile broadband alone does not engender any loyalty.  As a result, many subscribers switch in search of the cool phones and low prices. But there is one way operators can keep subscribers loyal – by providing exceptional quality for voice and mobile broadband, on the road and at home.


    When it comes to loyalty, network quality matters
    Operators that have focused on network quality have seen big gains in loyalty. Telefonica O2 UK, for example, stepped up its focus on network quality in 2005. By the end of 2008, its post-paid churn was at 1.3%, the lowest in UK and the operator was rated #1 in customer satisfaction by JD Powers. In the United States, Verizon wireless reduced its churn from 2.0% in September 2002 to just 1.21% in September 2007 - lowest in the US wireless industry - by investing in the quality of their macro cellular network.  Further, Verizon convinced consumers that they had the best network through their now iconic “Can you hear me now” ad campaign.  And one can find many similar examples from markets around the world. Customers are loyal to networks that provide quality.


    Mobile broadband at home is the next frontier for network quality
    More than 50% of mobile phone usage is now indoors. And with the rapid uptake of smartphones, consumers not only want to reliably make voice calls but also want to access the Internet.  According to Gartner, 140 million smartphones were sold in 2008, and handset vendor, Samsung, expects this number to grow to 500 million by 2012. When consumers access Internet services on their smartphones at home, they expect the same user experience as they get on their PCs.


    Delivering a wireline-comparable broadband experience is really tough using the macro-cellular 3G network.  Firstly because each 3G base station has to share a few Mbps of bandwidth it has among hundreds, perhaps thousands, of subscribers.  And secondly because, in 3G networks, the achievable data rate depends upon signal quality. Unless a subscriber has great coverage at home, he or she will not get a 1 Mbps+ data rate even if he or she were the only subscriber on the network.


    Femtocells deliver excellent mobile broadband performance for subscribers
    A femtocell provides great coverage throughout a subscriber’s home and a mobile data experience that is truly comparable to the one she gets on her home PC. A femtocell does so by leveraging the same wire-line broadband connection that is available to a subscriber’s PC.   Plus, a femtocell is a subscriber’s personal 3G network, not one that she is sharing with thousands of others.  A recent study conducted by Airvana engineers demonstrated that femtocells can increase mobile broadband speeds five-fold compared to using the macro-cellular network.


    Winning Loyal Subscribers
     Today, many consumers are selecting service providers based on the smartphones that the provider offers. However, as smartphones become mainstream and the handset portfolios of major service providers converge, consumers will once again pick networks based on network quality.


    However, the bar will be higher.  Gone are the days when network quality was synonymous with voice coverage. Consumers with smartphones will expect snappy, high-speed data connections to access their social networks, upload phones, download videos and catch up on news. They will be loyal to operators that provide them voice and mobile broadband everyone – and most importantly at the place they spend more than 50% of their lives – their homes.

    Editor's Note: Amit Jain is vice president of business development for Airvana.

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