European Femtocells Markets - A Strategic Analysis

Research Overview

This Frost & Sullivan research service titled European Femtocells Markets - A Strategic Analysis provides an in-depth analysis of the femtocells market in Europe and strategically evaluates its market potential with existing alternatives in the mobile broadband industry. It highlights some of the key challenges, drivers and restraints currently being faced by the European femtocells market and also provides a detailed analysis of key participants along with market forecasts from 2007 to 2011.

Technologies

The following technologies are covered in this research:

• WCDMA
• Mobile WiMAX
• UMA
• IMS/SIP

Femtocells are low-power radio systems that plug into a residential broadband connection and enable mobile subscribers to use their existing mobile cellular handsets to access both data and voice services. This is one of the key differentiators and selling points for femtocells, because with existing fixed-mobile convergence (FMC) services, users require a dual-mode cellular/wireless fidelity (Wi-Fi) handset to avail services at lower costs inside buildings. "Femtocells intend to play a key role in providing optimum quality mobile services inside buildings, in particular, for third generation (3G) technology, as building walls tend to attenuate the radio signal," notes the analyst of this research. "Carriers are, therefore, evaluating femtocells as a solution to reduce the cost factor and enhance indoor quality of service (QoS) for 3G." Furthermore, as femtocells are connected to the user’s broadband network, the user, instead of the carrier, would have to pay for backhaul traffic to the latter’s core network, resulting in enhanced cost benefits for mobile carriers.

However, it is unclear, from a regulatory point of view, if users can purchase femtocells through retail, or if operators would need to personally install it. Unlike Wi-Fi, these cells operate in the licensed band, and typically, spectrum licensees must approve the use of any equipment using the spectrum. However, some opine that the distribution can be conducted through retailing, directly to the end users, which is no different from today’s handset distribution model.

Cost and Standardisation Issues Pose Threat to Sustained Market Expansion

In addition to regulatory issues, high commercial costs are also emerging as a key challenge to sustained adoption of femtocells. Hence, there is immense pressure on vendors to further reduce the bill of materials (BOM) for femtocells, as carriers are not in a position to subsidise if the overall costs do not effectively reduce to 100 Euro. "Carriers have realised that it would be long before the cost of the femtocell will reach 100 Euros," says the analyst. "They are now considering renting out femtocells to users for a long contract period, rather than allowing them to buy it outright."

Moreover, for the femtocell market to succeed, a standardised interface between the femtocell and the core network needs to be defined so that carriers can choose femtocells from multiple vendors which, in turn, will increase volumes and decrease overall costs. Accordingly, operators must emphasise a multi-vendor supply model in order to reap such benefits.

1. European Femtocells Markets - A Strategic Analysis

1. Introduction

1. Introduction

2. Femtocell Network Connectivity

3. Femtocells - FMC or FMS ?

2. Advantages of Femtocells

1. Advantages

3. The Femto Forum

1. The Femto Forum

4. Core Network Integration Options

1. Modified RNC

2. Concentrator

3. UMA

4. IMS/SIP

5. Key Challenges for Femtocells

1. Interference

2. High Cost of Femtocells

3. Regulatory and Billing Issues

4. Handover and Interconnectivity

5. Security

6. Emergency Calls

7. Service Level Agreements and Quality of Service

8. Intellectual Property Rights

6. Market Forecasts and Analysis

1. Market Forecasts

7. Operator Strategies and Recommendations

1. Strategies and Recommendations

8. Analysis of Key Industry Participants

1. RadioFrame Networks

2. Ericsson

3. Sonus Networks

4. ip.access

5. Tatara Systems

6. Ubiquisys

7. Thomson Telecom; Airvana and Nokia Siemens Networks

8. Alcatel-Lucent

9. Conclusion

1. Conclusion

10. Glossary

1. Glossary