Underdog mobile operator Sprint Nextel Corp. quietly rolled out an emerging technology on Monday to give customers a strong cellular signal and flat-rate calling at home.
In parts of Denver and Indianapolis, Sprint started selling a femtocell, a small cellular base station that provides service specifically to a customer's home. The Sprint Airave, made by Samsung Electronics Co. Ltd., costs US$49.99 and is designed for people to install in their own homes by plugging it into a broadband Internet connection. Then they can pay a flat monthly rate -- $15 for an individual and $30 for a family -- for unlimited local and nationwide long-distance calls while at home.
The Airave works with any Sprint handset, and when the subscriber leaves home, a call will automatically shift over to the outside cellular network.
Femtocells are designed to solve the problem of weak cellular signals in homes, which is common in the U.S. They are an alternative to Wi-Fi phones, which are available only in a limited selection, though they work with wireless LAN gear that's already widely used in homes.
Sprint is at least the first major U.S. carrier to offer femtocells, which are expected to enter the market in high volume in 2009. The carrier plans to start selling the Airave all across Denver and Indianapolis, as well as in Nashville, Tennessee, by year's end. It will be offered nationwide in 2008, Sprint said in a press release.
The move is the latest use of new technology by Sprint, a smaller rival to Verizon Wireless Inc. and AT&T Inc.'s wireless division, in a bid to compete. The Overland Park, Kansas, carrier is also set to roll out WiMax wireless broadband on a limited basis later this year and to cities across the country next year.
Femtocells take their name from "femto," which denotes a small order of size in physics. The idea has been around a long time but until recently was held up by size and cost concerns. Now several carriers in various countries are considering deploying them, according to vendors and analysts. While helping subscribers get good service, the devices save carriers from deploying more expensive base stations on towers just to keep up with the growing number of people trying to use 3G (third-generation) mobile data services.
One question yet to be answered about femtocells is whether they will interfere with the existing outdoor cellular network. That can only be answered through real-world deployments, analysts say.
Sprint's offer comes sooner and at a lower price than many observers expected. The price is especially notable because Sprint isn't forcing buyers into long-term contracts. Sprint must be subsidizing the cost, said In-Stat analyst Allen Nogee.
"I guarantee it costs more than $50," Nogee said. However, the carrier will make back some of its cost through the special flat service charge, he said, because it wouldn't be making any money off the calls anyway -- many calls at home are made during nights and weekends when they are free, he added. Maybe most importantly, the Airave could help Sprint cultivate loyal customers and get consumers to give up their landlines -- along with their relationships with Verizon and AT&T, he said.