Cellular is fighting back

A few months ago the venerable Economist ran a cover story on VoIP and similar services now being offered to consumers. The story contained dire predictions about the eroding economic basis of traditional telephony, proclaiming the coming end of telephony as we knew it.

Traditional telephony providers, though, are not just standing there waiting for the boom to be lowered. They are fighting back. As we wrote a few weeks ago, the main weapons in their armory are small cellular base stations, called femtocells, which are aimed at residential or corporate environments. The technology will not only improve in-building cellular quality--just think better in-building coverage for WCDMA and HSDPA--but will offer providers a platform on which to realize fixed-mobile convergence as well as allowing for additional features at the home, such as WiFi and IPTV.

ABI Research's Stuart Carlaw predicts that four years from now there will be 102 million users of femtocell products on 32 million APs worldwide. "From a strategic and financial standpoint, the routing of traffic through the IP network significantly enhances network quality and capacity, and reduces the OPEX (operational expenditures) that carriers expend on backhaul," he says. "On a conceptual basis, femtocells allow carriers to aggressively price cellular data services in the home, with the ultimate goal of shaping consumer behavior."

WiFi and WiMAX are attractive, but cellular telephony has a robust base on which to build as well as technologies which will make it relevant long into the future. The 3G America association reports that only last year, nearly 100 million new subscribers signed up for GSM technology in the Americas. Informa Telecoms & Media research group reports that 2 billion of the world's 2.41 billion cellular subscribers were using GSM, and 3G Americas expects the heavy GSM growth in Latin America and the Caribbean to continue.

For more on the cellular future:
- see Gene Koprowski's TechNewsWorld report [1]