Ubiquisys Busts $100 Femto Barrier

UK femtocell firm Ubiquisys Ltd. claims it has achieved a major milestone for the fledgling femto industry by taking the wholesale price for the little 3G base stations below the $100 mark.

That price point is the big carrot that operators have dangled in front of femto makers for years. If the tiny base stations cost less than $100 wholesale, then operators can make the business case for deploying femtos and even offer them to customers for free (in theory, at least). (See Femtos Promise Big But Cost Too Much, Vodafone CEO Seeks Cheap Femtos, 3G & WiMax Femtocells: The Operator View, and 3G Base Stations Hit Home.)

Price is a major concern for operators contemplating the deployment of femtocells, and it's one of the reasons why so few operators have commercially deployed the home base stations, as revealed in the new report from Light Reading Mobile, Who Does What: Femtocell Services.

According to Ubiquisys CTO Will Franks, crashing through the magic $100 price barrier will spur operator order volumes to increase from tens of thousands of units, to hundreds of thousands, and even to millions.

Franks says his company reached the sub-$100 price because of its new software licensing strategy. Last year, Google (Nasdaq: GOOG)-backed Ubiquisys announced it would focus primarily on licensing its femtocell software and reference designs, dubbed the Femto Engine, rather than attempt to produce mass volumes of femto access points. (See Ubiquisys Femtos Go Soft, UbiquiSys Gets Google Boost, and Google Invests in 3G Startup.)

As a result, the femto manufacturing can be left to companies typically based in the Asia/Pacific region that are more adept at producing massive volumes of consumer hardware products.

"We've separated the hardware from the software," says Franks. "So, Taiwanese and Chinese companies can produce these very efficiently at a low cost point."

The G3-mini femtocell, manufactured by Ubiquisys hardware partner SerComm Corp. , is the first device based on the Femto Engine and powered by Percello Ltd. chipsets. Ubiquisys said the SerComm femto is in operator trials, but it did not name the operators, or where they're located.

Ubiquisys isn't the only company to have touted a sub-$100 femto. DesignArt Networks claimed in 2008 its System-on-Chip (SoC) for WiMax femtos enabled the wholesale price to fall below $100. (See Cheap Femto Chips and DesignArt Does WiMax Femto Chips.)

According to a recent Heavy Reading Mobile Networks Insider report, Femtocells: Market Outlook & Reality Check, individual operator orders for femtos are not expected to be bigger than 10,000 to 20,000 in terms of the number of units ordered until the end of this year. The report also notes that, while some vendors expect the volume of femtos shipped to reach 4 million by the end of 2010, others anticipate the volume to be only 1 million.

— Michelle Donegan, European Editor, Light Reading Mobile