Vodafone Revs Femto Engine

Vodafone UK stepped up its femtocell efforts in a big way Monday with the launch of a national marketing campaign, new brand, and a dramatically cheaper price for its small home base stations.

Vodafone has quietly offered a femtocell called the Vodafone Access Gateway since July 2009 for a one off cost of £160 (US$261).

Now, though, the operator is ready to make a big noise about the little base stations. The operator revealed today that the new name for its femtocell is the Sure Signal. (A name that's an open invite for criticism should the device not work).

But it's the new price of the Sure Signal femto that will surely raise eyebrows: The operator has slashed the cost of the device to a one off fee of £50 (US$82) or £5 (US$8) per month for 12 months-with monthly price plans of £25 (US$41) or more.

For monthly plans that are less than £25, the Sure Signal costs a one off £120 (US$196) or £5 per month for 24 months.

That price reduction is not the result of a drastic drop in the cost of making femtocells. Rather, Vodafone says it's prepared to deepen its subsidy on the femtos because of the gains it says it gets in customer satisfaction and subscriber acquisition-particularly new customers that defect from other operators.

According to Lee McDougall, senior product marketing manager at Vodafone UK, a "greater level of subsidy is worthwhile." [We'll be] subsidizing heavily and marketing heavily as well," says McDougall. "We're seeing really great benefits and feedback."

He also notes, though, that there has been a "slight reduction" in the femto prices because the operator is "ordering in much bigger volumes now." But McDougall wouldn't disclose how many Vodafone is ordering now, or how much it's paying per femtocell.

For the fledgling femto industry, Vodafone's move in the U.K. is a significant endorsement for the little home base stations.

Boosting the iPhone indoors?
The launch of the Sure Signal conveniently coincides with Vodafone's launch of Apple's iPhone on January 14. But McDougall says that was "coincidental, but timely… just the way things panned out."

So, the femtocell is not just aimed at iPhone users. The primary application for the device is improved 3G coverage at home and in small offices. Check out the video about the Williams family's coverage plight here on Vodafone's site, which gives a good idea of how the operator is marketing the Sure Signal and using it a differentiator.

"Only Vodafone can guarantee the signal in your home," says McDougall.

While Vodafone mainly targets the Sure Signal at consumers, the operator has also launched price plans for small businesses (which do not include value-added tax): A £42.56 (US$70) one off charge or £4.26 (US$7) per month for 12 months for Your Plan for Small Business and Storm price plans of £21.26 (US$35) or more.

Or, for price plans of less than £21.26 (US$35), the Sure Signal costs £102 (US$167) or £4.26 (US$7) per month for 24 months.

Along with the new marketing push, Vodafone has also updated its back office systems for the femto service. Previously, customers had to call Vodafone so that someone could manually register their phone number with the femtocell. Now, that procedure is automated. Customers can log on to their Sure Signal web service portal to add or remove phone numbers, and the changes are made in real time.