Technology | Media | Telecommunications

Tuesday, September 09, 2014

Top 3 Applications for New Femtocell Deployments

Improving the quality of indoor voice communication for smartphone users is a high-priority for mobile service providers. According to the latest market study by ABI Research, the femtocell market will see a steady growth as revenues reach $4.2 billion in 2019, owing to a rise in enterprise unit shipments.

The vendors focusing on the enterprise market are Alcatel-Lucent, Airvana, and Cisco. Interestingly, while enterprise shipments are on the rise, residential shipments are slowing down. ABI Research predicts slow steady growth at best for residential products for the foreseeable future.

With femtocell deployments mainly focusing on coverage, 3G units dominated shipments.

However, with global roll-outs of LTE there is a growing demand for multi-mode products, especially in advanced markets such as the United States which is characterized by a CAGR of 130 percent in the next 5 years.

Wi-Fi integration continues to advance with major vendors supplying integrated solutions -- either built-in or add-ons units. Leading the market efforts in this direction is Cisco which offers small cells as add-on units to its widely deployed Wi-Fi solution.

ABI believes that integrated units will account for 50 percent of the total revenue in 2019.

"Enhancing femtocell data handling capabilities with Wi-Fi integration increases revenue opportunities through direct means like value-added services or indirectly through data offloading," said Ahmed Ali, research analyst at ABI Research.

As the unit price decreases, vendors and service providers look to support revenues by adopting subscription charging schemes. This coincides with the more flexible business opportunities within the enterprise market.

Additional features like multi-mode and Wi-Fi integration, coupled with customized services like voice/data plans, hosted management, and location-based applications justify subscription fees for the enterprise.

In terms of regional development, North America and Asia-Pacific secure the biggest share and Europe is actively catching up.

Latin America and Middle East are starting to develop a healthy appetite for femtocell solutions with several contracts announced recently by Alcatel-Lucent and NEC.