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Broadband Access
C5: Vodafone Zuhause Can’t Last, Says Thomson CTO
Too Little Capacity For Cellular-Only Service
by Iain Morris
French FMC vendor Thomson Telecom took a dig at Vodafone Germany today, arguing its Zuhause strategy is fundamentally flawed.
“You won’t be able to do it indefinitely because there is simply not enough spectrum,” said Frederic Potter, the CTO of Thomson.
Zuhause offers customers of Vodafone Germany lower ‘home-zone’ rates for calls they make in and around the home. It is seen by most analysts as the operator’s response to the fixed-line operators eating into its voice revenues through the launch of dual-mode GSM/WiFi handsets, which jump calls from cellular to IP when in range of a hotspot.
Potter believes that high demand for the tariffs will put too much pressure on the spectrum capacity.
Vodafone Germany was unavailable for comment at the time of writing.
Potter’s criticism comes at the C5 World Forum in Milan – where Thomson is plugging a range of FMC products – and follows a panel session during which one of Thomson’s customers, itself partly owned by Vodafone Group, recognised that a shortage of capacity might become an issue in the future.
“The 3G network has lots of capacity and we have enough to meet demand at the moment,” said Corinne Bach, the technology strategy manager for French mobile operator SFR. “But at some point more will be needed.”
SFR became a customer of Thomson’s last month when it signed up to the vendor’s mobile IP centrex service, which provides its customers with a range of PBX-like features.
Bach sees capacity becoming an issue not through the launch of a home-zone tariff but with the advent of femtocells, which, interestingly, were recently launched by Thomson.
Femtocells threaten dual-mode handsets
Femtocells are mini base stations that can be installed in a home, allowing customers to roam on to a fixed network via 3G spectrum.
While they form a part of Thomson’s product portfolio, the operator has yet to name any customers. Aside from capacity concerns, the barriers to adoption might be radio interference and the high cost of the base stations.
“Prices need to fall to the level of a domestic device – around €100,” says Noel Foret, a product director for France Telecom. “But the rationale is that we do not require new handsets to run them.”
That implies France Telecom – another Thomson customer – might re-evaluate its dual-mode-handset strategy when femtocells become cheaper and less prone to interference, which Foret expects will happen sometime in 2008.
But if enthusiasm for femtocells gathers pace, does the vendor not risk cannibalising revenue from products designed for the dual-mode-handset market Potter is so keen to promote?
Potter refutes the suggestion. “We design products that operators need for their particular market, to the specifications provided by those operators,” he says. “We don’t push particular products, like Cisco.”
Despite his criticism of Zuhause, Potter recognises that repeatedly upgrading the handsets is not ideal.
“There are already seven antennas in my mobile, and we cannot keep adding new radio layers,” he says. “On the other hand, GSM roaming is extremely expensive. It’s a difficult choice for the user. There needs to be a solution in the middle somewhere.”
Thomson claims to be the largest vendor of VoIP softswitches in the world, with a 23 percent market share and client base that includes Iliad, T-Online, Telekom Austria, Telenor and Telecom Italia, as well as France Telecom and SFR.
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