28th November - Femtocells have seemingly gone from cult to mainstream in the space of a year. Despite this, no femtocells have been deployed commercially and considerable hurdles must be overcome before units can be rolled out on a wide-scale basis.

As such, the approach of this report carried out by IDATE, is to present the views of leading experts from the vendor and operator communities, as well as a summary of the activities of all concerned in bringing femtocells to market. It is hoped that this will provide an effective overview of the market as it stands now, albeit one that is necessarily incomplete and a work in progress.

IDATE expects to see the femtocell market developing rapidly over the following years. While a lack of agreed standards and outstanding technical issues will inhibit major rollouts in 2008, network integration issues are likely to be solved by 2009.Coupled with cost reductions this should lead to a ramp up in volumes in 2009/2010. IDATE believes 10 million UMTS femtocells will be shipped in 2010, rising to 18 million in 2011.

Femtocell Timelines…

Despite the uncertainty, commercial femtocell roll outs grow ever closer. Following RFQs (Request for Quotes) from major mobile operators, a number of femtocell contract awards are expected to be signed in 2007/2008, with the first major network trials likely to be held in early- 2008. Initial commercial deployments will be made in 2008, though wide-scale commercial roll outs will not take place until 2009. A very significant ramp-up is expected in 2010.
Operators interested in the mass deployment of femtocells include AT&T, Telefónica O2 Group, SoftBank, Sprint, TMobile and Vodafone, with more names added to the list on a regular basis. From a vendor perspective, while femtocells were previously largely the preserve of specialist start-up companies such as ip.access, considerable interest is now being shown by most if not all of the major equipment vendors.
Femtocell Definition…

Essentially, femtocells are small, lowcost, low-capacity residential 2G (second generation) or 3G (third generation) base stations which enable users to communicate across any IP (Internet protocol) access network using - crucially - a standard mobile handset. In terms of appearance and price there are significant similarities to wireless routers or wifi access points.
Architecturally, residential femtocells are connected via the customer’s broadband DSL (Digital Subscriber Line) or cable to the mobile network where a controller then aggregates the traffic. Using broadband as the backhaul, the femtocell is able to provide voice and data services in the same way as a regular base station, but with the benefits of a simple and cheap installation, low unit cost and scalable design.
This far, most focus has been on UMTS (Universal Mobile Telecommunications System) 3G femtocells, though the technology can also be applied to CDMA- 2000 as well as 2G and WiMAX (Worldwide Interoperability for Microwave Access) standards. There is, however, a key reason why 3G femtocells have drawn most attention: to a greater extent than is the case with 2G, 3G does not work well in residential areas, which represents a significant factor in the poor levels of 3G take-up and usage to date. Femtocells, by adding coverage inside the building, are highly effective at overcoming ‘cell shrinkage’, whereby indoor mobile users lose power as the signal travels through the wall, with the result that capacity and coverage is consumed from the rest of the cell in a disproportionate way.
About IDATE

Founded in 1977, IDATE is one of Europe’s foremost market analysis and consulting firms, whose mission is to provide assistance in strategic decision-making for its clients in the Telecom, Internet and Media industries. IDATE has also been instrumental in providing a forum for debate amongst the markets’ key players, notably thanks to the IDATE Foundation, the DigiWorld Summit and the Communications & Strategies Review.