One of the banes of the cellular communications industry is the 'dead zone' - an area with poor reception on a cellular provider's selected radio frequencies. This can happen due to geography- the location may be too distant from the nearest cell tower. It may happen due to topography - there may be terrain features such as hills or ridges between the nearest cell tower and the problem area. And it can happen due to architecture or urban planning, when solidly-built buildings or even things such as metallic coated windowpanes cause interference. In all of these cases, it may not be practical to overcome the problem by installing new cell towers or new transmission equipment. In most cases, this is because the dead zone is too small to warrant the expense of changes to the primary cellular infrastructure.

Cellular providers will sometimes deploy what are called 'picocells' - smaller cellular base stations connected directly to the cellular provider's landline network - to alleviate the problem in large public spaces or areas with wealthy sponsors such as sports arenas, convention centers or corporate campuses. In such cases, it is profitable to deploy the infrastructure. However, what about small business and residential users who find that their homes or offices are in a dead zone? The solution offered by many providers is the femtocell. So named because 'femto' indicates that it is smaller than 'pico,' a femtocell (also known as an Access Point Base Station) is a miniature version of a cell tower, small enough to be packaged in consumer appliances like WiFi routers. The big difference between a femtocell and a picocell is that the former, rather than being directly wired to a provider's network, is instead designed to connect to consumer home networks and relay its data via Cable, DSL or other home connectivity. Essentially, a femtocell is a VPN node that connects to the cellular provider's network to relay cellular call data, with a miniature cellular tower attached. It provides an operational savings to the cellular provider because any call data from the femtocell, which would have otherwise had to travel across their own network using their own bandwidth, instead travels across the public internet at the femtocell user's expense.

Many wireless providers in the U.S. either offer femtocells or are testing them with their systems. It's a much better way to handle frustrated customers who cannot use their cellular phones in their homes or office than the previous solution, which was essentially to shrug and shake their head. Some femtocells are designed to use WiFi to relay their data, meaning they can be placed anywhere there is available power and WiFi network coverage. One advantage of femtocells is that some providers are offering very high cap or unlimited voice plans with them, since their bandwidth savings make this economical. The purpose of this is to encourage customers to use their cellular phone for all purposes and make it more feasible for them to replace landlines.

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