Femtocell Management and Integration Market to Realize $360 Million by 2013
Companies providing device and service management solutions for femtocell networks will garner $360 million in revenue within this market by 2013, according to a new research brief from ABI Research.
Critical functions that need to be supplied by network management and integration vendors include performance management, remote configuration, security provisioning, timing, traffic routing and management, update management, access control and authentication, and accounting. The increasing adoption of industry standards such as TR-069 and IEE1588V.2, as well as innovative use of GPS and TV signals, are likely to simplify the situation significantly.
Vice president and research director Stuart Carlaw observes that, “As the market evolves in terms of RFP activity and trials, it is becoming increasingly clear that real differentiation is swinging more to how the integration and management of the femtocell network is being facilitated.”
He goes on to add that, “Although they are rarely emphasized, it is clear that security and timing solutions are growing in importance. The fact that a femtocell is a very exposed network element that can be an entry point for malicious attack and timing in a heavily distributed network is challenging, and could cause catastrophic disruption. It is imperative that carriers and vendors address these issues in conjunction with more traditional management tasks.” [ABI Research]
Femtocell Semiconductor Market to Reach $2.4 Billion by 2013
As well as providing significant opportunities for carriers and OEMs alike, femtocells look set to be a lucrative opportunity for semiconductor vendors. A new Research Brief from ABI Research finds that the market is primed to grow from just under $72 million in 2008 to over $1.8 billion in 2013, at an annual compound growth rate of over 300% over that time period. The significant promise associated with this market is drawing more and more silicon vendors into this market, including large vendors such as Freescale and Qualcomm.
However, addressing this market is far from straightforward.
Vice president and research director Stuart Carlaw says, “Although there’s no doubt about the significant potential of this market, it should be addressed with great wariness. Semiconductor vendors will bear the brunt of huge pressures from price declines. In order to meet those price declines there is actually a paradoxical need to invest huge sums in designing optimized and dedicated silicon for the femtocell market.”
This puts silicon companies in the strange situation where it will actually cost a princely sum to get any where near the lucrative pot of gold at the end of the figurative rainbow, and that the decision to invest in the technology must be made at a time of uncertainty over the future direction of the market. Questions of technology, air interface, semiconductor approach, multimodality, integration, route to market, business model, and more all remain unresolved.
The new Research Brief, “Femtocell Semiconductors” provides a clear outline of the major semiconductor providers and their femtocell-specific products. It also includes a forecast for total value of the market for femtocell semiconductors. [ABI Research]
Femtocell Trials to Start in Singapore
Author: Hwai Lin Khor, Research Analyst, Wireless
Singapore will have its first taste of femtocell this mid May following the announcement from its No. 2 mobile operator, StarHub. 200 of its existing cable broadband customers will test the technology over a six-month period to assess its ability to improve residential wireless coverage and consequently drives data services adoption. The trials would be an assessment to the effectiveness of the technology in Singapore dense city and buy time for the carrier to develop suitable business models, as well as engage the right femtocell vendors; before it commits itself to something major.
Singapore mobile market is highly competitive with mobile penetration exceeding 100%. SingTel, StarHub and M1 are already offering HSDPA services, while StarHub is also the country’s first operator to operate HSUPA. Due to its small land mass, nationwide 3G service coverage is already complete. Almost 80% of Singapore population lives on high rise buildings. Skyscrapers, in some extend, attenuate cellular signals but it is often not difficult for one to obtain connectivity from the nearest macro cells. Hence, the main driver for femtocell in Singapore would be capacity.
Operators go on cut-throat competitions with one another to offer value-added 3G services with attractive pricing schemes to manage churn and gain better revenue. This drives the demand for more capacity. Moreover, StarHub and SingTel are full-service carriers that also offer triple play bundles with fixed-line, mobile, and TV. Hence, femtocell fits well into their portfolios as existing broadband subscribers can readily put femtocell into use without further installations; while operators can still deliver mobile value added services to subscribers at home.
TV and multimedia contents from both cable TV and IPTV services can be delivered to subscribers’ handsets with guaranteed bandwidth and possibility of dual direction interactivities. These arguments substantiate the move for both operators to explore femtocell. Nonetheless, issues like uncertainties in the immature technology, service price plans, equipment cost and maintenance, vendors’ credibility and so forth need be scrutinized; which makes this StarHub trial an important milestone for femtocell. [ABI Research]
100,000 Femtocells Will Ship in 2008, But 2010 Will Be the Year of Real Ramp-Up
Although the femtocell holds much promise for carriers of all kinds, 2008 is forecast to remain a fairly low-key year for femtocell vendors, according to new data from ABI Research. Only about 100,000 units are expected to ship in 2008. 2009 will show the fruits of the more than 20 trials currently underway, but 2010 will be the year when the market moves to double-digit millions in volume.
According to ABI Research vice president and research director Stuart Carlaw, “By 2010, femtocell silicon solutions will have been optimized to the degree that $100 price points for femtocell access points will be within reach, and OEMs’ order books will have the volume to sustain critical wholesale price reductions.”
Although it’s an old cliché, it is true to say that when it comes to femtocells, it’s not a question of “if,” but “when.” Carlaw contends that, “The turning point for this market will be late 2009. There is little doubt that all the technical hurdles regarding femtocell deployments can be overcome. The really critical issue will be whether initial carrier deployments are supported by robust business models and service plans that extend beyond pure fixed-mobile substitution goals.” Should a carrier fail to pay heed to these needs and execute unsuccessfully in the early days, it could act as a braking force on the total market development.
The research found that although initial deployments are expected to be dominated by standalone products, the market seems destined to adopt a more integrated approach as price points permit femtocell functionality to be embedded in other products. [ABI Research]
Services Will Be Key in Differentiating the Femtocell Offering
Consumers often do not care about which particular technology provides them with service; but consumers always care about quality and the consequent benefits of those services.
ABI Research believes femtocell solution providers must recognize this fact and then direct attention toward the development of potential services that can be enabled by an intelligent femtocell solution, especially with the majority of technical hurdles already overcome. Not only is this critical in differentiating from competitive solutions such as Dual-Mode Wi-Fi solutions, but also it will be critical in ensuring profitability for carriers.
ABI Research vice president Stuart Carlaw states that “with a very conservative uptake of new innovative services enabled by femtocell solutions, it could take as much as five years before carriers go into the black following the trials on femtocell solutions.
“It is important to put this into context: nearly 75% of consumers in developments buy the solutions of more than two services. It is apparent that creating services beyond the go-to-market, cheap voice strategy will be crucial. And this will enable marketers to push the femtocell beyond the early adopters.”
A service bundle that encompasses a comprehensive set of wrap-around services – and links devices into a connected home concept – will be a clear differentiator going forward. Moreover, it is imperative that service providers capitalize on Web 2.0 services by embracing service concepts such as “cache and carry,” where rich media files are swapped within the femtocell where service quality and cost are more favorable.
A recent report from ABI Research entitled, Femtocell Business Models, finds that femtocell ASP has far less bearing on cost than the ongoing support and marketing needs that will be essential to making any service-launch successful. The report includes a dynamic, user-definable, Excel-based model that incorporates 28 different input variables – from the breakdown of costs to uptake and user traffic. It profiles an exhaustive list of output data on costs and revenues, and supplies 144 different margin analyses: accounting for every potential outcome derived from the mix of variables. [ABI Research]
Fixed Mobile Convergence Market Set to Expand to 250 Million Users by 2012
Operators are now rolling out converged services on fixed and mobile networks, converting trials to commercial deployments. 2008 will see another spate of trials, as femtocell technology begins to become available.
The move to FMC infrastructure is a natural evolution for the mobile network as broadband services, including Voice over IP and other Session Initiation Protocol (SIP) services, begin to be deployed. Both Unlicensed Mobile Access (UMA) and SIP infrastructures are being deployed and dual use Wi-Fi and cellular devices will be joined by femtocells in 2008. According to a new ABI Research report, operators are fully aware of the increasing threat from mobile VoIP services and FMC will allow them to offer similar services and tariff packages.
“As we move to the end of the decade, mobile networks will emerge with a flat all-IP architecture using 3GPP standards to deliver multimedia services and VoIP,” says principal analyst Ian Cox. In the meantime operators want to offer attractive calling plans to consumer and enterprise users. This will enable a single device to use both mobile and fixed broadband networks, improving business efficiency and enabling users to access directory information easily from their favourite devices.”
For operators, says Cox, FMC provides data offload onto the broadband fixed network and improved indoor coverage from the mobile network.
For users, a wider choice of mobile devices is coming along that will remove a barrier to service adoption. This will speed up the development of content and services, to the advantage of the whole industry. [ABI Research]
Operators Want Femtocells
The hype surrounding femtocells reached a fever pitch in 2007. These router-sized mobile home base stations promise to solve the many shortcomings faced by existing WiFi/cellular fixed-mobile convergence services and enable operators to offer consumers high-speed data, VoIP and voice services in the home with reduced infrastructure costs. Operators had begun talking about their trial plans, while Sprint launched commercial services in two markets.
The Femto Forum, an industry group advocating femtocell technology, was born this summer with a handful of smaller vendors, but closed out the year with some 40 members that include Alcatel-Lucent, NEC, Nokia Siemens Networks, Motorola, and ZTE. Operators have also joined the ranks: Bharti Airtel in India, Bouygues Telecom, Carphone Warehouse Networks, Orsacom Telecom and Telefonica 02.
Still, there's much work to be done before femtocells can become a widespread reality[FierceBroadbandWireless]
Mobile Femtocell Market to Increase Tenfold Next Year
Worldwide sales of GSM/GPRS and 3G femtocell access points will grow tenfold from 2007 to 2008, with sales reaching more than £315m in 2010, says analyst Infonetics Research.
Femtocells are small, low-power, indoor cellular base stations that can achieve higher-quality local-area coverage, and allow mobile operators to extend their cellular footprint in the home and office environment.
Infonetics said the greatest opportunity for operators will be presented by 3G femtocells that are deployed in households, where they can be used to provide consistent high-speed coverage, as well as improved home-zone-type tariffs and services for customers.
3G femtocells offer operators a practical and potentially much less expensive alternative to enhancing coverage by further investing in denser 3G macro cell networks, said Infonetics.
In addition, as femtocells are backhauled over an internet connection, such as a consumer's DSL line, the mobile operator could make operational expenditure savings on macrocellular backhaul architectures.
He said, "If the hype translates into deployment, femtocells could radically transform the economics of mobile data and content-based services." [ComputerWeekly
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