Femto Apps -- You Know You Want Them!

I've been thinking a lot about femtocell-based applications lately.  With few commercial femtocell services launched and the basic business and technical aspects of delivering voice and data over those femtocells still being explored, this might seem a tad premature.  So, why the focus? 

To be honest, I'm not completely certain.  It probably boils down to one of several reasons; take your pick.  I am helping judge the Femto Forum's Femtocell Awards and applications have factored into the entries.  Following the lull beyond the initial hype, a handful of conversations at CTIA back in April actually centered on using femtocells as more than just coverage and capacity extenders.  Personally, these applications just seem cool – honestly, who wouldn't want to get an alert when their husband/wife/son/daughter sneaks out of the house in the middle of the night?

First things first.  If you aren't familiar with the concept of femtocell applications, it's pretty easy to grasp.  Think an application that sends you a text message when someone (that husband/wife/son/daughter I mentioned) comes into or leaves the coverage of a femtocell.  Think an application that uses the femtocell as an interface into your home media assets – allowing you to access them when away from home.  Think an application that automatically downloads your favorite podcasts when you get home or allows you to send messages to people when they arrive at home or work.  Some of these might seem silly.  To be sure, some of them could be delivered with other technologies such as GPS in the device.  Regardless, if operators hope to drive femtocells into homes across the world – if only to drive down their own network OpEx and CapEx – they need to make them compelling for more than just the people who have marginal cell coverage or those who want a cheap voice/data tariff.  And, in the same way apps have turned smartphones from business tools to consumer must-haves, apps have the power to make femtocells "aspirational."

Of course, converting this potential into compelling applications won't be simple.  On that note, let me pass along a bit of advice.

• Leverage The Platform's Strengths.  At its core, the femtocell is nothing more than a limited-coverage, limited-capacity base station sitting in the home or office, and backhauled by the user's own high-speed Internet connection.  The coverage aspect, however, allows insight into a subscriber's location.  The backhaul aspect, in turn, supports a multimedia experience that just isn't available with a macro-cell base station supported by a few T1s, and connectivity into a home network allows simple access to anything from iTunes libraries to nanny cams to networked thermostats.  To date, the sample applications rolled out by femtocell vendors have all hit some of these aspects; some of the better concepts have combined a few – say, altering a phone's User Interface (UI) to support higher-bandwidth applications when within range of the femto.
• See Control As A Strength.  If we're all being honest, many of the strengths I just outlined can be replicated in another way.  GPS can deliver location information.  WiFi in the home and in the device can support bandwidth hungry applications as well as a femtocell while integrating with any networking devices or media in the home.  One thing that cannot be replicated is the "touch" of the operator making everything work seamlessly.  Just as femtocells will need to be "plug and play" to drive widespread adoption, femtocell applications will need to require minimal technical sophistication if they're to be successful.  As an extension of an operator's network in the home or enterprise, this simplicity should be something the service provider can engineer – at least more so than applications being delivered "over the top."
• Use The Applications To Advance Your Agenda.  Earlier, I posited that mobile operators are interested in femtocells primarily as a way to drive down service delivery costs.  You can add in, "improve stickiness and reduce churn" but the point remains that the value of the femtocell is weighted more towards the operator than the end-user.  Again, this is why applications are important.  That doesn't mean, however, that these applications can't also further an operator's interests.  Femto-based caching of Slacker stations, for example, would keep lots of streaming traffic off the macro-cell network.  Applications that provide a conduit to multimedia content while on the femto, could drive new subscriptions for enjoying this content elsewhere.   Oh, and if it's hard for the customer to take those applications with them – say because they've been custom developed by the operator or they are intimately linked with a fixed-broadband service – stickiness is sure to follow.
• Don't Be A Control Freak.  I'm not backtracking here, but when I suggest that a lack of application portability would support stickiness I am not recommending a reliance on proprietary applications or the creation of a walled garden surrounding the femto.  Understandably, operators may want to customize specific femtocell applications.  They will also, however, want to benefit from scale that results when application development is broadly leveraged while supporting customers with the operating systems they want to use and the applications their friends have been talking up.  In the here and now, this means driving application standardization efforts through the Femto Forum and its special interest group on services.

Recently, the topic of LTE femtocells has begun to attract more attention, driven by the Femto Forum's latest messaging and operator investigations.  This is a good thing.  If nothing else, it gets operators and vendors, alike, thinking about the requirements for making a business of LTE in the home.  It becomes a bad thing, however, if it derails a focus on applications.  Whether it's HSPA, LTE, WiMAX or even TD-SCDMA, applications will be key to actually making the femtocell something a broad set of end-users wants.  And, no different than the business case around LTE, it's going to take some time to figure out the business requirements and opportunities around these applications.

Peter Jarich is a wireless analyst with Current Analysis.