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Research and Markets Adds Report: 'Femtocells Reality Check: Business Models, Strategies and Market Trends'Jan 15, 2009 (Close-Up Media via COMTEX) -- Research and Markets has announced the addition of the "Femtocells Reality Check: Business Models, Strategies and Market Trends" report to its offerings. In a release, Research and Markets noted that report highlights include: Understanding the factors which have led to continual femtocell deployment delays, and analyzing femtocell growth to eventual mass market Although still in its infancy, the market for femtocells has evolved rapidly over the last two years, moving from a compelling concept but one without clear commercial viability to a reality which could fundamentally alter the mobile telecoms landscape. However, despite its prospects, the industry has been slow to embrace and deploy femtocells, and although Sprint in the US and Starhub in Singapore have dipped a toe in the water, most femtocell deployments are still at trial stage. Nonetheless, the author anticipates the first large-scale femtocell deployments will arrive in Q2 2009, with the market ramping in 2010. With increasing user demand for mobile broadband data, operators will look to femtocells to improve indoor coverage whilst easing capacity requirements and backhaul costs in their macro-network. Topics of coverage include: - Understanding the femtocell business case - How a femtocell works - The femtocell vendor investment landscape - Mobile operator strategies - Femtocell deployments in the enterprise - Barriers and driver to femtocell adoption - Technology overview and trends - Profiles of femtocell equipment vendors - Interpretability and standardization - Femtocell market forecasts Although still in its infancy, the market for femtocells has evolved rapidly over the last two years, moving from a compelling concept but one without clear commercial viability to a reality which could fundamentally alter the mobile telecoms landscape. However, despite its prospects, the industry has been slow to embrace and deploy femtocells, and although Sprint in the US and Starhub in Singapore have dipped a toe in the water, most femtocell deployments are still at trial stage. Nonetheless, the author anticipates the first large-scale femtocell deployments will arrive in Q2 2009, with the market ramping in 2010. With increasing user demand for mobile broadband data, operators will look to femtocells to improve indoor coverage whilst easing capacity requirements and backhaul costs in their macro-network. There are several reasons for the femtocell's slow market birth, ranging from the technical to the commercial and strategic. Despite initial technical problems and the slow introduction of femtocell-related standards, it is true to say that most of these issues have been overcome. Through the efforts of the Femto Forum, the acceptance of the Iu-h interface by all the main femtocell vendors has ensured uniformity. Interference has been dealt with and handoff is largely solved. The remaining femtocell challenges are primarily commercial and strategic. Most femtocell vendors - Ubiquisys, RadioFrame, ip.access and Airvana - are medium-sized, VC backed businesses who are stepping into the new territory of large-scale consumer deployments. The large network equipment providers such as Nokia Siemens Networks, Ericsson and Motorola have chosen not to enter the market directly, working instead with the femtocell vendors through OEM and reseller arrangements. Although this scenario is not that unusual in a new market it means that the specialist femtocell vendors lack the capital to exploit the mass market potential of femtocells and have a credibility gap to close in order to reach acceptance by Tier 1 operators. This gives rise to the classic catch-22: without the capital to subsidies a large-scale femtocell rollout, vendors are unable to prove the viability of femtocells, but without this proof of concept many operators will wait on the sidelines. This brings into play another crucial strategic issue: there is little first mover advantage for mobile operators looking to deploy femtocells. With the unit cost of a femtocell currently at around $200 and with the considerable investment required to roll-out a service to consumers, femtocell deployment is a high cost, high risk endeavor. By being first to market the operator accrues none of the mass production cost advantages of the follower and takes all the risk with technical issues that will be ironed out at later stages. The femtocell vendors counter these challenges with the indisputable operational benefits of femtocells. Coverage in the home is improved, which is vital if data services on 3G/3.5G are to take off, and the backhaul is taken care of by the consumers own broadband connection thus taking pressure off the transmission network. Furthermore, femtocells allow operators to offer homezone type services with reduced tariffs within the home environment but without the need for special dual-mode handsets. Churn can be reduced and whole families could be tied into one network since they will all be using the same femtocell. Finally, so-called femto 2.0 services could help increase ARPU by offering media sharing and social networking features when the consumer is in the home-zone. The author anticipates the first large-scale femtocells deployments to arrive in Q2 2009 but with less than 500,000 units shipped during the year. Instead, 2010 will be the year when shipments start to flow as the business case becomes clearer. The following three years are expected to see rapid growth as the price of the femtocell unit drops and the need for better in-building coverage grows. This will be driven by a combination of market factors including the need to backhaul high bandwidth mobile data; the growing use of data cards; greater integration of the femtocell with CPE; and the threat from fixed-line operators entering the mobile domain through dual-mode Wi-Fi solutions. Finally, as LTE arrives in many advanced markets there will be increased need to ship LTE femtocells around the 2013 timeframe and some believe the first LTE deployments will be via femtocells. Report information: www.researchandmarkets.com/research/959a18/femtocells_reality ((Comments on this story may be sent to [email protected])) |