updated 9/17/2007 8:02:59 AM ET 2007-09-17T12:02:59

One of the big complaints lodged against wireless phone companies is poor signal quality inside buildings, especially homes.

Sprint Nextel Corp. is trying to overcome that obstacle with a device that boosts wireless signals indoors and directs the calls over the Internet.

The Airave, which Sprint will begin selling Monday in its stores in parts of Denver and Indianapolis, increases cell reception over an area of about 5,000 square feet and can handle up to three calls at once. It hooks into the customer’s existing broadband connection, sending unlimited calls through the Internet instead of over Sprint’s wireless network.

Once the customer leaves the device’s range, calls automatically switch back to the wireless network.

The Airave retails for $49.99, although Sprint will offer initial rebates to lower the price, and users pay a monthly charge of $15 for individuals and $30 for families. Sprint, based in Reston, Va., with operational headquarters in Overland Park, Kan., plans to expand sales of the devices to the rest of the two initial test markets by the end of the year and begin rolling it out nationally next year.

Similar service
It’s the second such in-home service coming out this year, following the June release of a system offered by Deutsche Telekom AG’s T-Mobile USA that sends calls through a Wi-Fi router. That system requires specially equipped phones, while Airave works with any Sprint cellular phone.

It does not work with Nextel-branded phones, the company said.

Ajit Bhatia, director of product management for Sprint Nextel, said the Airave solves call quality problems for subscribers, a key reason they give when dropping service.

“Customer satisfaction is directly correlated with coverage satisfaction,” Bhatia said.

Besides saving the customer from using their wireless minutes, the device also will reduce the amount of traffic on the mobile network, potentially improving signal quality in the immediate area and reducing the amount of new cell towers and other infrastructure Sprint will have to build to handle future growth.

“This is a very cost-effective way for us to support additional traffic,” Bhatia said.

Bhatia said the company also is looking at a version of the Airave for small businesses that could handle a dozen or more calls at once.

Allen Nogee, principal analyst at Scottsdale, Ariz.-based research firm In-Stat, said so-called femtocell technology has been on the drawing boards of wireless carriers in the U.S. and Europe for years. He estimated demand for the devices will be slow, growing to only 21.5 million units a year by 2011.

“It’s a niche technology,” Nogee said.

But he added that such devices could become popular in densely populated areas where wireless signals are a problem and it’s more expensive for carriers to build cell sites.

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