Get ready for femtocells: Ubiquisys raises $11 M

I’ve posted here before about Motorola’s innovative use of femtocells, but over on VentureBeat.com, Jared Newman has written a great post about how femtocells can defeat all that “dead space” even the best wireless coverage will sometimes have:

If you’ve used an iPhone, you’ll know how frustratingly spotty its wireless coverage can be.

Fact is, wireless carriers such as AT&T (which serves the iPhone) are desperately searching for ways to unload the huge amount of traffic that are hitting their networks from iPhone and other smartphone owners. These users are slurping up large amounts of bandwidth to do things like browse the Internet and watch videos.

Ubiquisys is getting ready to attack cell phone dead zones and overcrowded 3G networks around the world with its femtocell technology. Today it announced it has raised $11 million more from existing investors, which it will use to support the service as it moves from testing to soft launch.

Femtocells are small devices that let cell phones tap the Internet in places where wireless cellular service is weak or unavailable. Calls are routed by low-power antenna through an existing DSL or cable router, or through an all-in-one device (such as Netgear’s Femtocell Voice Gateway) that includes both the router and the femtocell.

Femtocells haven’t taken off in a big way yet, but wireless carriers are definitely interested in femtocells’ ability to take a load off cellular networks. Last September, Ubiquisys and Japanese mobile carrier Softbank launched the first commercial 3G femtocells, using “ZoneGate” technology that allows devices to communicate and determine the best radio frequency for routing to the Internet.

Swindon, U.K.-based Ubiquisys is looking for partnerships around the world with more carriers, who often charge a monthly fee for the service. In exchange, customers may get perks, such as unlimited calling when using the femtocell. The idea is that the consumer can save money by nixing a local phone line, because the cell phone is reliable enough to replace it, while the carrier gets to ease the stress on its network.

The company’s chief executive, Chris Gilbert, said there’s been a spike in femtocell interest over the last few months, either signaling a possible economic recovery or a need from carriers to start addressing their network issues. Even in the United States, where femtocell interest was once driven coverage dead zones, the explosion in smartphone use has put a strain on wireless carriers. The renewed interest around the world has helped Ubiquisys raise its most recent round of funding, which now totals $53 million since August 2006.

Ubiquisy has backing from Accel Partners, Advent Venture Partners, Atlas Venture, T-Mobile Venture Fund and, most notably, Google, which invested $25 million in the company two years ago.

Gilbert said Ubiquisys faces competition from Huawei and Alcatel-Lucent, among other smaller ventures, but those two companies don’t focus specifically on femtocell. As such, Gilbert said Ubiquisys is growing horizontally to a variety of companies and products, rather than vertically.

In addition to getting its technology into router-like devices, Gilbert wants Ubiquisys to work with TV and set-top box makers, allowing femtocell to cover more convenient areas of the home.