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Femtocells

06/09/2011
Major telecom equipment vendors are now engaged in this market
Femtocells


IDATE has recently released the 4th edition of the market report “Femtocells”. This report presents the latest trends in the femtocell market, which has recently regained momentum with the entrance of new ODM & chipset vendors as well as the emergence of new markets in the form of enterprise and public access. It examines also how mass-market deployment levels will be reached - 39.4 million deployed units by 2015 - and what obstacles must first be overcome.

”Following a slow start, the number of operators launching commercial femtocell services is increasingly quite rapidly in the Americas; Asia Pacific; and, Europe, Middle East and Africa,” comments Frédéric Pujol, Head of Radio Technologies & Spectrum at IDATE. “Our team estimates that the worldwide femtocell access point market will reach a cumulative total of 39.4 million deployed units by 2015, representing a compound annual growth rate (CAGR) of 71% between 2011 and 2015”

Vendor Evolution Accelerates…
The femtocell vendor environment is going through a process of rapid evolution.While the sector was dominated initially by a handful of small, specialist vendors - including ip.access, Ubiquisys and Airvana - this is no longer the case. Major telecom equipment vendors - including Alcatel-Lucent, Cisco, Hitachi, Huawei, NEC, Nokia-Siemens Networks (NSN), Samsung Electronics and ZTE - are now engaged in this market.

In addition, the recent emergence of a new category of mainly Taiwanese femtocell ODMs (Original Design Manufacturers) is shaking up the industry once again. This latter category of vendors is acting to drive down prices as it benefits from the rise of open standards, adding to the likelihood that mass-market volumes will be achieved. Likewise in the femtocell chipset sector, while Picochip - a pure-play small cells pioneer - has a clear and substantial lead, the number of viable and interested players has increased greatly. Broadcom (via its acquisition of femtocell specialist Percello), Texas Instruments and Qualcomm are all now devoting considerable resources to the sector.

Operator Interest Growing…
In the past year the number of live femtocell networks has doubled, in line with falling prices. There are now 30-plus deployments in more than 20 countries, including eight of the world’s largest operators by revenue. Femtocell access point (FAP) prices have now reached EUR 100, though care needs to be taken in terms of what is encompassed by that figure.
From the operator point of view, femtocells offer a cost-effective means of providing additional coverage and capacity while reducing capital and operating costs and improving retention. The concept of femtocell-enabled data offload is steadily gaining ground and it is likely that, once the market develops further, a range of new femtocell-based business models will emerge.
Increasingly, a far greater degree of emphasis is being placed on outdoor (metro and rural), enterprise and LTE femtocells under the ‘small cells’ heading, thereby widening the addressable market. IDATE believes the femtocell sector will grow in importance during the coming years as the small cells concept develops into an over-arching strategic approach encompassing both coverage and capacity considerations.

Frédéric PUJOL
Head of Mobile & Spectrum Practice