Wireless system vendor RadioFrame has jumped into the femtocell market, predicting millions of tiny 3G and GSM cells will ship to homes and offices.

"I think mobile operators have to sell into the femtocell market," said Jeff Brown, chief executive of RadioFrame. "They have reached saturation, so they have to steal customers from somewhere else." Femtocells support indoor calls using broadband for backhaul - a scheme that lets them steal business from the wired phone providers and keep customers longer.

Radioframe, a longtime advocate of indoor cellular technology, has been selling business-level picocells to Nokia. Both picocells and femtocells are poised for massive growth now, led by the US, where indoor coverage is particularly patchy, he said.

"The femtocell market will be very large, and any vendor needs a radically better product to win," said Brown. "We had to go out and make our own baseband chips, and hit a price point that can sell to millions of users." Radioframe will put its new OmniRadio platform into 2G and 3G products later this year, and a combined product by the end of the year.

Femtocells face a challenge from Wi-Fi, which many believe will crush any margins the operators want to make on femtocells to zero. They are competing with VoIP services which are more or less free - but Brown is confident there is a workable business there for femtocells.

"There will be places for both femtocells and Wi-Fi," he said. "There's nothing in Wi-Fi for the wireless operator, so if the objective is to tie their customer in closer, then femto is the obvious choice." He believes that smart marketing people will even be able to make money on femto services in competition with free services over Wi-Fi.

"Femtocells get around big cost problem in dual-mode schemes," he points you. "You can keep your handset." Wi-Fi based convergence schemes require an expensive dual-mode phone. Although normal handsets, roaming may be difficult in a scheme like SIP, as compared with UMA used in BT Fusion.