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Femtocell makers cackle with delight as "no coverage" lawsuit goes against Orange

The importance of getting a good signal indoors hardly needs emphasising, after last week in Barcelona. Femtocell technology was the talk of the show. But now after Tom Prescott took his phone network to court and won £500 for "lack of signal" in his home, there will be a sense of greater urgency in the industry.

But will the operators realise that it isn't enough to provide just one network signal per household? Can they ever think past "churn reduction"? Can someone explain that there are worse problems than occasionally watching a customer go to another operator?

From Orange's point of view, the publicity could hardly be worse. Mark Prigg wrote the triumphant report:

Tom Prescott, 32, took Orange to court after they refused to cancel his 18- month contract, even though he could not get a signal either at his Richmond home or in his office. "I felt bullied by the company, and dealing with Orange was awful. I hope people who have the same problem now realise they can do something about it."

The attitude of other mobile operators wasn't likely to be very different - before the lawsuit, anyway. If you complain that a call got dropped, and expect to be taken seriously, then you're mad. Most companies would have taken Orange's attitude: "Coverage is outside our control."

The Court disagreed. It said that if you sell an 18 month contract to a victim who neither lives nor works in an area where you can provide coverage, then it really is your problem, not theirs.

The trouble is, 3G phone technology simply doesn't work well enough for them to be able to fix the problem. Very simply, if the phone mast is blocked by brick or concrete walls, then very little of a 3G wireless signal will get through.

That was Prescott's problem: he couldn't make calls, and he couldn't receive calls. So naturally, he asked for his money back. Orange took the view that if the phone worked, and the network was in place, and if he could actually use the phone out in the street, then they'd done all anybody could expect. So they refused - an error of judgement commercially, but a complete disaster in PR terms.

And all operators are staring at the same disaster, if they don't change their business habits.

Not just one or two phone users have the problem; in some areas, claims of providing coverage are close to fraudulent. They can get away with it if the old 2G GSM network provides backup coverage, of course. But after this, even that may be called into question.

We know how to solve the problem. Simply, 3G operators have to put a private mast into your home. These are very small mobile phone cells. Smaller than microcells, smaller even than picocells, they are called femtocells. They are limited to short range: inside the building, and perhaps the gardens.

Femtocells, built into the typical broadband ADSL router, are likely to be pretty standard when mobile phone technology moves into the next generation, Long Term Evolution, LTE. They will provide Internet connections from your home LAN to your mobile supplier, carrying voice traffic encoded as web data - voice over IP. And in multiple trials around most Western countries, they are showing good promise.

Right now, the chips that handle femtocell signals are not cheap. Before the end user will be satisfied with them, they'll need to come down in cost to well below $50 - and right now, you can spend four times that. And then there's the cost of installing... so the average home owner isn't likely to jump at the opportunity to flash that sort of cash just for the privilege of using one particular network; which means the operator has to sponsor the upgrade.

Question: who will provide your femtocell? Orange? Cingular? Clearwire? France Telecom?

Wrong Answer: "If I provide the customer's femtocell, they'll have to use my service! They'll never be able to switch! Muhahahaha!"

Better answer: "...it's going to cost us, but we have to make sure that this mini-mast works with any phone. Otherwise, nobody is going to see any point in using it."

Best Answer: "We have to change roaming regulations! The whole business model needs radical reform, so that we do NOT create logjams for our customers."

Here's the problem, rather neatly summarised by consultant Dean "Disruptive" Bubley: "These operators are living in a dream world of one operator per household. It isn't going to be true even of single people living alone."

Most households have phones from several operators.

Yes, you can move a number from one network to another. No, it isn't a picnic. And anyway "why should I?" is the common response.

So along comes the alpha male of the family: "I use Hutchison 3G for my phone, so we're having a '3' femtocell. I'll be able to make and receive 3G calls, and the rest of you will have to go out in the rain - isn't life rough?"

Yeah, sure - that'll work.