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Mar. 15, 2010

In the last year, numbers show that wireless operator commitment to femtocells has been inching upwards, albeit at a rather slower pace than some wireless industry analysts had expected.

There are about ten femtocell deployments around the world currently, and analyst firm Informa recently found mobile service operator commitment to femtocells did increase since December 2009, and in certain cases up to about 48 percent.

With about 61 other trials taking place worldwide right now, some in the final stages involving users, some analysts are now expecting more deployments for the next two to three quarters.

This year, we might be seeing femtocell deployments ramp up but what other technological and market developments can we expect for 2010?

First, let's look at developments that provided the foundations for the recent femtocell deployment increase. In February of last year, the femtocell industry had no agreed technology standard, an unclear operator business model and a worrying question mark surrounding the issue of interference with major networks.

But after a while, most of those major obstacles were successfully overcame. The most important obstacle that femtocells overcame was interference. If femtocells created uncontrollable interference with the outdoor network then wireless operators would simply not deploy them.

The "Femto Forum" as well as other bodies such as the 3-GPP undertook detailed research into this area and demonstrated that femtocells can be successfully managed and deliver improvements in total network capacity and throughput for femtocell users.

In an environment when the wireless operator business case for femtocells was a bit unclear, analyst firm Signals Research Group has undertaken to make a study. This concluded that even with conservative assumptions, the customer lifetime value of a femtocell user could increase by as much as about 120 percent.

As mobile service operators start to prepare for 4G networks, this research has recently been updated and found that a wireless operator can realize an overall return of about ten times on their femtocell investment in mobile broadband networks through macrocell-offload and delivering new services.

Similar returns can be obtained for both 3G and LTE/WiMAX deployments as well. What this underlines is that increased mobile data usage appears to be ramping up femtocell utilization rates.

The chairman of the FCC recently stated that the agency will encourage the use of femtocells to deliver the necessary gains in mobile capacity.

The world's first femtocell standard was completed by the 3-GPP on April 12, 2010, in a close collaboration with the Femto Forum and the Broadband Forum.

Overall, the first 3G products that meet this standard are now coming to market and interoperability testing between compliant equipment from about 23 wireless vendors is currently taking place at a special meeting organized by the Femto Forum next week.

The wireless industry is notorious for its unwillingness to adopt non-standardized technology. The fact is that the industry has reached the stage we're at today in just eleven months is impressive.

Perhaps the greatest changes in the history of femtocells will begin later this summer. Where once the technology was considered solely the cure to poor coverage in the home, it is now becoming apparent that they will also introduce compelling new mobile applications while also extending into the enterprise and even the outdoor network.

Femtocells open up a wide range of new possibilities for mobile application development by leveraging the presence of wireless devices in the home and using this fact to trigger different events. This awareness can be used to schedule or enable data-intensive mobile phone applications when a high speed, low-cost cellular connection is available.

We are also in the closing stages of the femtocell standards for LTE, CDMA and Wi-MAX technology as well.

We will keep you posted on these and other developments in the coming days and weeks.

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Source: Informa Research Inc.