Femto cells are supposed to solve all the 3G operators' problems. They are small 3G base stations inside users' homes or offices, which increase cellular coverage, and use the subscriber's broadband to connect over the Internet to the phone network.

It's a neat idea, and a number of small companies are building products, but so far, the details of the business model are still being worked out, and there is only one major operator shipping femtos - Sprint Nextel is selling Airave devices in Denver and Indianapolis.

The Femto Forum, which was formed in July, aims to get the market going by sharing marketing and development effort to build a consensus around femtos, helping set standards and define business practices.

In July, the group had few members, but a lot of enthusiasm. We spoke to the chair of the group, Professor Simon Saunders, as new members were announcedto see what has coalesced since then.

"It was important to make the Forum representative," said Saunders. "We needed operators and equipment vendors." The Forum now has more than forty members, including both operators (Telefonica O2, Rogers Wireless and Carphone Warehouse) as well as vendors including Alcatel Lucent, NEC, Nokia Siemens Networks and Motorola. The full list is on the Forum's site.

"We have operators from a wide range of geographies, who use a number of different over-the-air technologies," he said. And they are committed: "Telefonica 02 is a board member, and chairs a working group, on networks and interoperability."

The Femto Forum has four main working groups - Regulatory; Network and Interoperability; Radio and Physical Layer; and Marketing and Promotion - and they're all in full swing, says Saunders.

The network and interoperability group is important, he says because operators want to be able to choose a femto from any vendor, and manage them scalably, so they can provision services quickly. "That will drive economies of scale and bring femtos down in price."

This group works closely with standards organisations, he says. "We want to make sure the strands add up to everything the operator wants. We're eeping a watching brief on that - we hope that standards organisations have everything under control."

The radio and physical layer group handles issues around the interaction between the femto cell and outdoor cells. "We want to make sure interference and mobility are well managed - and the performance specifications aren't overcooked for what is necessary for femtos." The idea of indoor cellular system has been around for a long time, in fact, but early attempts to sell it were hampered by the over-complex expensive base stations.

The regulatory group is to make sure that femtos comply with regulations and licence conditions, he says: "Making sure we can actually use them."

Finally, the marketing group has to "make sure that the other groups are working to a common set of assumptions on the ways femtos can be delivered to the end customer," says Saunders. "There are different ways to provide femtos including fully costed or subsidised models." The marketing group also manages the Forum's site.

The state of play Saunders doesn't make great claims for the Sprint Nextel deployment, as it is only in a couple of markets and uses non-3G CDMA. "There is a case for deploying femtos with existing technology," says Saunders pointing out that indoor coverage has always been an issue in the US. "It could be a proof point around the technological and and regulatory environment."

He notes that other players are being more vocal about femtos, including Vodafone's chief executive Arun Sarin, who spoke in favour of the technology in July: "This isn't something that's just an interesting technology coming forward from vendors," says Saunders.

Google, also, has famously invested in femto maker Ubiquisys.

"There seem to be a range of very viable business models," he says. "We are making sure those business models operate. Which one an operator chooses depends on the particular market it is in. Where coverage is limited, femtos are important, but in other environments richness of service can be enhanced with them."

A third of today's mobile traffic originates in the home already, so operators have an opportunity to improve and/or cheapen those calls.

What next?

"The next few months will be busy," says Saunders. "Many operators have done initial technology feasibility studies and it looks like we'll see full deployments in the first half of 2008."

A number of large manufactuerers, like Netgear and Alcatel Lucent, have announced a femto platform, either made in house or through a partnership, he says: "That's an illustration that these are important areas to be involved in."

One thing he's bracing himself for is radiation fears, but he's sure that his group has the experience to allay them when they emerge. "Everyone's interests are aligned. The operators have a keen interest to ensure these devices are managed alongside existing macro cells. They will operate on much lower powers, and will help phones to operate at lower powers," he points out. A cellphone used close to a low power femto will itself radiate much less power than one used far from a cell tower, so femtos actually reduce radiation.

"Cellular networks are already a great example of using spectrum extraordinarly efficiently," he points out. "Femtos take that concept to further extremes, by re-using existing frequencies with a fine granularity."