picoChip gulps another $20m

Big money for little cells

Bath-based femtocell specialist picoChip has raised another $20m in equity funding, but with a million chips already sold it's about rapid expansion rather than running costs.

PicoChip designs chips for use in femtocells - very small base stations that connect over domestic broadband. As that market expands picoChip needs more cash to increase its own growth rate before the big boys get too interested; hence the need for shiny new offices in Bath to house more engineers working to migrate the technology to LTE and self-organising networks.

Femtocells are constantly being hyped as the next big thing, and while they haven't changed the world overnight they are being slowly rolled out around the world, with picoChip products in most of them. In the UK only Vodafone has embraced the femtocell concept, with its Sure Signal product which features a picoChip heart.

Other operators have been running trials, though some have found the complexity of linking their internal systems to the internet too complicated, or scary. Internal systems include billing and call routing, and have traditionally been kept well away from the public internet; but the whole point of a femtocell is to use that cheap internet connection for routing calls, which means providing a secure interface to those internal systems.

That requirement has pushed some operators to look again at alternatives such as repeaters and boosters, which are themselves getting increasingly intelligent.

But even with limited domestic deployments the future of the technology is well assured. Femtocells are clever enough to monitor local frequencies and find a slot in which to operate, Vodafone's Sure Signal can spend as much as six hours checking the local radio environment when first powered up, and that intelligence is now finding its way into the macro network. That de-skills network deployments, making them cheaper to build and maintain.

Much of the world is currently planning 4G networks, and hopes to run those networks in unfamiliar frequencies released by the digital dividend, which is an ideal time to be putting more intelligence in the network. Many 4G networks will also be operating at 2.6GHz, which has even worse in-building penetration than existing 3G deployments (which operate at 2.1GHz), driving the demand for femtocells even higher.

That market is going to attract significant competition - but picoChip has a lead and a million chips deployed, so $20m might be a small price to pay for a share or two. ®