Abstract

If Technology and Deployment Cost Issues Can Be Solved, High Growth Expected for Femtocells after 2010

In developed countries, competition in the telecom service sector is fierce. As more operators try to gain market share, revenue and subscriber growth will face challenges. FMC services present fixed-line network and mobile operators with new opportunities; fixed-line network operators can bundle even more voice services for sale through FMC services, helping them to reduce the amount of subscriber losses and lower the impact of VoIP services. Mobile operators can aim to gain fixed subscribers via FMC services. Femtocell provides very good FMC development opportunities for service providers.

Examining the future development of femtocells, until 2009 the most critical aspects for femtocell development will be standard confirmation, interoperability tests and the chip commercialization schedule following standardization. These aspects will form a basis for the take-off of the market. Since 2007, after two- to three-year femtocell testing, operators' tests of software, hardware equipment and FMC business models have reached a stage in which they can be commercialized. After mid-2010, adding standardized products, deployment will be conducted on a larger scale. It is expected that by 2012, worldwide femtocell shipment volume will reach 50 million units. The CAGR for the five-year period starting in 2008 is expected to reach 327%. Meanwhile, in many countries in Western Europe and East Asia, besides fierce broadband competition, the ability of 3G services to penetration through structures is lacking due to the fact that high frequencies are used for transmission. Femtocells can have a positive and immediate impact on the development of 3G and LTE. The number of large operators making investments in femtocells, especially in Western Europe, will be ahead of other regions.

Femtocell New Favorite for Indoor Network Deployment; Wi-Fi Growth in Residential Networks to Face Challenges

After mid-2010, many technological challenges related to femtocells are expected to be solved, service providers' commercialization will accelerate, and large-scale deployment will become more evident. This will make it an important access technology for FMC services. Femtocells will increase the speed of mobile broadband transmission in the home. With more users only employing mobile devices in the home, other residential network devices and technologies, such as Wi-Fi, will face challenges in terms of their future growth potential. From the perspective of current WISP (Wireless Internet Service Provider) and operators which have deployed a large number of hotspots, if femtocellsl will successfully push mobile broadband operators' deployment and service promotion, they will face considerable competitive pressure. In the coming few years, the focus will be on what type of strategies these companies will adopt in light of femtocell developments.

Femtocell Prices Expected to Fall; to Be Integrated in More Devices in the Future

As for the roadmap of femtocell access devices, current product plans still revolve around single-function APs, hoping to satisfy service providers' large-scale promotion demand with prices below US$100, easy-to-install-and-use models, and even retail sales bundled with mobile phones. Currently, the price for each femtocell is higher than US$150. It is expected that with one more year there will be opportunities to bring costs down, as there will be more deployment projects and shipment demand, as well as integrated components. Equipment vendors such as Ubiquisys and Airvana have already rolled out femtocell module products. In 2009, module prices could fall by US$50; this could enable broadband equipment vendors to integrate these modules with broadband access devices such as IAD or gateway, becoming another device type for which service providers could have large-scale demand within an acceptable cost range. In the mid- to long-term future, femtocells could also be integrated with entertainment devices such as STB (Set Top Box) and game consoles. In an even longer-term future, it could also be considered to integrate them into PCs and TVs. Femtocells add even more mobile at home service plans for mobile broadband operators. This could lead to a new wave of digital home applications.

Appendix

List of Companies