European Femtocell Market to Generate 400 Million Euros
European Femtocell Market to Generate 400 Million Euros
7th September , 2009
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Europe : A new report predicts that he adoption of 3G femtocells in Europe on a large scale will be subject to trials and formal certification as required by industry standards. The majority of 3G mobile operators in Europe have femtocell trials in-progress with anticipated launches in 2010. Frost & Sullivan predict that by 2014 there will be 11.8 million femtocell subscribers with femtocell vendors generating revenues of approximately euro 401.2 million. Above shows the Zonegate femtocell from Ubiquisys.
A crucial factor in the adoption of femtocells for 3G mobile operators is cost. Many femtocell manufacturers estimate the cost of a single femtocell at a price of 150 Euros. However, when features such as seamless mobility and as interference management are included costs may increase to around 250 Euros. These features will be necessary for handover between the macrocell and the femtocell.
As 3G is deployed further down the frequency band, by the laws of physics, the wavelength of the signal reduces, providing smaller coverage. Hence, carriers need to deploy more base stations to meet coverage and capacity requirements, resulting in higher capital expenditure (CAPEX) and operational expenditure (OPEX).
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. This results in enhanced cost benefits for mobile carriers.
It is crucial that chipset vendors reduce chipset costs, which are currently approximately euro 50. In order to reach the euro 100 mark for femtocells, many opine that chipset costs alone need to be about euro 8-10. Pricing models must be made transparent to the end user without creating any confusion. This is essential because, eventually, end users would rent out femtocells from the carrier and, if they do not gain any monetary benefits, the business case will be lost.
The new report from Frost & Sullivan European Femtocells Markets - Not Quite There Yet!, finds that by 2014, there will be 11.8 million femtocell subscribers with femtocell vendors generating revenues of approximately euro 401.2 million.
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