2008 emergence of femtocells?
(07/23/2007 9:00 AM EDT)
LONDON — The past few weeks have seen frenetic activity in the still largely untested business of femtocells--also known as home basestations or 3G access points.
A group of about 25 companies--including chip suppliers, mobile network operators and the developers of these mini basestations--have joined together to form the Femto Forum. Only seven have publicly acknowledged their participation in the Femto Forum, but several operators have revealed they have put out requests for proposals to equipment vendors, however, and hardly a day goes by without some of the key players announcing they are partnering to bring femtocells to market.
Earlier this month, one of the first international congresses focusing on the technology was held in London and attracted more than 250 attendees.
Still, it is clear there are technical, regulatory and commercial hurdles to be cleared before the widespread deployment of femtocells, which can provide enhanced voice and data coverage in the home for up to six users on their existing 3G handsets.
Femtocells represent the first real threat to the increasing dominance of Wi-Fi routers in the home and offer the prospect of an all-IP approach to increasing coverage, while backhauling cellular traffic over a broadband connection. As such, they could pave the way for cellular operators to offset any loss of revenue from voice over Wi-Fi, where calls are handed off to a Wi-Fi network and then carried back to the mobile network over a cable broadband or DSL connection.
It would seem that cellular network operators should be beating a path to the femtocell vendors. But apparently they are not yet convinced of the cost efficiencies femtocells offer and are confused by the many options for integration into the core network--with the three key versions being Iub over IP, UMA (Unlicensed Mobile Access), or based on IP Multimedia Subsystem (IMS) and Session Internet Protocol (SIP) standards. Nor are they in agreement as to whether the business case is predicated on expectations for much higher data usage or better voice coverage.
Industry analysts and vendors, not surprisingly, are convinced femtocells will make their mark by the middle of 2008, then soar to large volumes quickly.
Vincent Poulbere, principal analyst at Ovum, projects a slow buildup in 2008 in Western Europe and about 7 million units shipped in 2009, rising to 17 million in 2011.
Meanwhile, Stuart Carlaw, research director at ABI Research, said: "It's a high-risk, high-reward environment for now, but we see 102 million users by 2011 on 36 million femtocells. But that depends on operators' converting the trials they tell us they are conducting to major deployments.
"If things do not go as smoothly as anticipated . . . things could turn out badly, particularly for the many innovative, startup companies that are currently driving the technology," he said.
Carlaw added that the introduction of open standards will be key to success, and thus welcomed the Femto Forum's target of focusing on that in the first instance. "The industry needs to focus on economies of scale and not get fragmented," he said.
From a semiconductor perspective, he said, the risks are high right now. "We are seeing a lot of price pressures even before there is any meaningful volume out there. But despite this, companies such as picoChip, ST Microelectronics, ADI and Xilinx are pretty active in the market. Most are focusing on total solutions, while others such as picoChip are partnering for the radio side. Still others, such as Texas Instruments, Broadcom and Freescale Semiconductor, are looking on and waiting for volumes, and will either acquire the expertise or dive in and commoditize the market," Carlaw said.
The analyst's "conservative" estimate is that the semiconductor opportunity for femtocells will be $50 million by 2008, rising to a "robust" $935 million by 2012.
Source: EETimes
Second part of the article: Femtocells mobilize to fight Wi-Fi in the home