Verizon Wireless Launches Spendy Femtocell Product

Some times I think that VZW just doesn't have a clue when it comes to pricing and marketing their products. Other times I'm sure of it. This is one of those days.

VZW launched their long rumored "Femtocell" product the other day, which they named their "Wireless Network Extender." For those of us non-geeks, a Femtocell extends the wireless carrier's network by providing a small cell of coverage (generally in the 10 meter, or 30 foot, range) by carrying voice and data over a high-speed Internet connection back to the carrier's central "switch."  This means that, if you a Femtocell installed at your home, for example, you'll have perfect mobile coverage (at the expense of using up a bit of your Internet bandwidth).

T-Mobile has had a similar service that uses WiFi (called Unlicensed Mobile Access) for a few years now, and I use it at home with my Blackberry 8230. UMA is a neat idea, particularly since it doesn't require any carrier-specific hardware--any vanilla WiFi access point will do. You can even use T-Mobile phones at some commercial hot spots.  For example, I was able to get on to the WiFi at the Singapore airport and place a 30 minute call back to the US at normal (not roaming) rates.

Femtocells work a little differently. They support the carrier's native frequencies and technologies, instead of WiFi. In the case of VZW, this means a very weak CDMA signal is generated by the Femtocell--just enough to cover the footprint of a standard home or office.

So far, so good. Plug the Femtocell into your high-speed Internet connection, and all of a sudden you have perfect coverage. There are a few flaws in the VZW strategy, however:

1. The unit costs $250. Ouch.

2. When you place a call over the Femtocell, you still use minutes from your standard wireless plan. Even though you are paying to carry the call for most of the way back to VZW, and if they sell enough Femtocells it could feasibly mean they won't have to build out some portions of their network, they're not giving their users any break for helping them out. T-Mobile at least gives you the option of paying $10/month in exchange for unlimited UMA calls.

3. The VZW Femtocell actually has a GPS unit in it that prevents you from using it in places where you're not supposed to. UMA and some other Femtocells allow you to use your phone anywhere.

I think that VZW has to take a very hard look at their Femtocell strategy--it has a number of fatal flaws that will prevent widespread adoption, in my opinion.