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Feb. 28, 2010

Generally speaking, in most markets, the enterprise femtocell segment of the wireless industry has been a pretty big disappointment in terms of market penetration and popularity.

Enterprise femtocell still represents today a largely untapped revenue opportunity, but only if mobile service operators can manage to make a go of it. Of course, and in most cases, this is easier said than done...

So far, femtocell device pricing has been positioned rather as a key to the market's success. When and if prices drop below WiFi levels it will become a easier for wireless operators to give femtocells away in a bid to improve their own mobile services and offload backhaul costs.

However, enterprise femtocell launches could drive the volumes necessary to make consumer femtocells more attractive, a bit like the way Wi-Fi had its initial success in the enterprise before becoming a residential phenomenon.

If high costs continue to be cited as a major obstacle on the success of the residential femtocell business model, the enterprise also offers an attractive target to the extent that the enterprise is generally less price sensitive, simply because equipment expenditures can more easily be linked to a more tangible return.

If anything has changed in 2009, it's the ability of mobile equipment vendors to deliver femtocell solutions that actually speak to operator's ultimate needs.

So far, it's been argued that wireless operators have been trying to break into the enterprise segment with a managed mobility offering for some time, an offering that doesn't require a company to replace its device base with dual-mode mobile handsets.

Delivering overall network capacity and coverage into the enterprise sector and at a much lower cost than full-on distributed antenna systems, then femtocells would certainly hold out to the promise of making this a possibility, in fact helping to capture new customers, grow the affinity with existing ones and increase revenues all at the same time.

But the impending arguments for consumer femtocells still carry over to the enterprise space in one way or another.

Like consumers, enterprise users want better network coverage and capacity, without having to adopt new devices.

The enterprise segment represents an opportunity for wireless operators to drive 3G usage and offload backhaul.

Additionally, if 3G coverage indoors could drive 3G usage elsewhere, it's easy to assume that femtocell exposure at work could drive interest at home.

But using the same line of thinking, if these same arguments for an enterprise femtocell last year remained largely the same as the arguments back in 2008, is the simple availability of new technologies and higher capacity femtocells enough to make the segment a topic on the minds of so many wireless vendors?

Food for thought...

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Source: Tech Blog.