This Phone Signal-Boosting Device Is Not for Everyone

NEW YORK ( TheStreet) -- What if I told you there was a device that strengthened cellphone signals so your phone worked reliably inside your house -- upstairs, downstairs and even in the basement?


Well, what I told you, sorry, you can't have it no matter how much money you throw at the companies offering it?

That's what is happening all over the country. The device is a tiny cell tower called a femtocell, named for the mathematical term for one-quadrillionth the size of a unit. It can improve indoor cell signals dramatically.

Unlike signal boosters, which take and amplify the stronger outdoor signal indoors, femtocells work even with terrible outdoor signal. They use a home's broadband Internet and a GPS signal to communicate with the nearest mother tower.

Indoors, these petite, portable mini towers broadcast a cellular signal -- not Wi-Fi -- of several thousand square feet so phones remain connected to a cellular network.

But today, only customers of AT&T ( T), Sprint ( S) and Verizon ( VZ) can get one for about $100 to $300. One regional U.S. carrier, Mosaic Telecom in Wisconsin, also offers one for $50. The wireless carriers may toss one in for free, especially if you threaten to leave due to poor indoor reception.

Everyone else? Too bad. T-Mobile, MetroPCS and most other carriers don't offer it. Even some customers of the ones that do such as Sprint-owned Virgin Wireless and Boost Mobile -- are out of luck. Granted, the big three make up about 80% of the U.S. wireless population but it's often the customers of smaller companies that could use the boost.

"Coverage is the main reason why consumers churn and leave their existing operator," said Andy Germano, vice chairman of the Small Cell Forum, an organization promoting the development of these mini cell towers. "Giving someone a low-cost femtocell to address that issue is almost a no-brainer."

The reason why femtocells are not available in stores like Best Buy ( BBY) or from every wireless carrier is the devices operate on licensed wireless spectrum, the same spectrum that companies like Verizon, AT&T and Sprint pay billions of dollars to the government. Each femtocell must be registered and approved by its cellphone carrier before it starts working for you.

But don't give up hope entirely, says Joe Hoffman, principal analyst for mobile networks with ABI Research.

"There's no reason that couldn't happen. You can go into Best Buy and buy a phone today," Hoffman said. "It's just the economics. Maybe when the price gets down to $100."

On paper, T-Mobile, which happens to be my carrier, committed to offering a femtocell, according to the Forum's market update in June. So have small, regional carriers General Communication ( GNCMA) in Alaska and Cellcom in Wisconsin.

When asked about the future of the devices in T-Mobile's future, the company offered this statement:
"Although we continue to review customer premise equipment solutions like femtocells and repeaters, we have no plans to deliver a femtocell product. The beauty of Wi-Fi Calling is that it turns any open Wi-Fi access point into an instant coverage area for Wi-Fi Calling enabled handsets. So, while femtocells benefit one location, a Wi-Fi Calling customer sees benefit in multiple locations."

Femtocells, which aren't perfect but get a steady stream of superior reviews, started showing up in the U.S. in 2007. But even with the promise of better indoor Internet, high prices kept customers away. Some customers argued they shouldn't have to pay extra for a service for which they already pay. Last year, the three carriers began giving devices away for free to those complaining of poor indoor service.

This year, approximately five million femtocell devices will be sold worldwide, estimates ABI Research.

"In the next five years, we think that number is going to grow 10 times," said Hoffman, who got his own AT&T femtocell a few years ago and watched his 1-to-2 bar reception go to full bars in his house.

But five million femtocells a year pales in comparison to the 1.9 billion cellphones forecast to be sold this year by Gartner, a research and advisory firm.

Hoffman believes many people don't know or understand the purpose of a femtocell.

"Most people I talk to about it say, 'Why would I want that?' It's another box in the house. When cellphone coverage isn't good in the house, it's the cellphone company's fault," he said. "Generally speaking, when you can't get good signal inside, you switch carriers."

In a May survey of 1,000 U.S. consumers, market strategy consultant iGR found that 47% didn't know what a femtocell was. A mere 2% were using one. But if offered one, 57% said they would up their carrier's rating by a full letter or plus sign.

"While many people are not aware of residential femtocells, the fact is that many people have poor or marginal in-home cellular coverage," Iain Gillott, iGR's president and founder said in a release.

Femtocell rollout has been steady, said Germano with the Small Cell Forum. He estimates that each of the three U.S. carriers have sent out "upwards of a half-million units each." Most are 2G and 3G devices, which created an issue for new iPhone 5 owners because the 4G phone was incompatible. There are 4G femtocells in the works.

Sprint, the first in the U.S. to launch its Airave femtocell in 2007, said in an FCC filing in July that it had 950,000 femtocells in operation, nearly quadruple from 15 months earlier, as noted by FierceWireless.

In a Small Cell Forum update, Sprint said it plans to double femtocell rollout in 2013. Sprint currently offers Airave free to customers with poor in-home coverage. For others, it sells the Airave for $129, though customers of Sprint-owned Boost Mobile and Virgin Mobile can't use it.

The non-femtocell carriers do offer some alternatives. Signal boosters by Wilson Electronics and Wi-Ex are readily available online at in stores. T-Mobile offers distressed customers the Cel-Fi signal booster from Nextivity. Also, as previously mentioned, it has long offered Wi-Fi calling service, which allows a Wi-Fi enabled phone to use a home's Wi-Fi for calls.

For more tips on improving signal indoors, also read New Ways to Improve Cellphone Reception Indoors and 7 Apps That Improve Smartphone Reception.

While residential femtocells made up 100% of all sales initially, last year one-third sold for enterprise use, according to Small Cell Forum. Today, there are also picocells being deployed in indoor public areas like airports and shopping centers, and metrocells and microcells that target urban areas suffering from bottlenecks.

The new small cells target data usage -- existing home femtocells target better voice calls. Small cells are being used to offload data usage so carriers don't worry about bogged down networks.

"Now we're seeing data explosion where coverage is not the only factor," Germano said. "We recently released a report that with a relatively small number of small cells attached to macrocell, you can offload a significant number of users. We're seeing small cells being offloaded strategically. As few as 10 small cells in a macro can offload 75 percent of all the (data) traffic."

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
Tamara Chuang is an outside contributor to TheStreet. Her opinions are her own.

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