102 Million Femtocell Access Point Users by 2011

— August 30, 2006

In the near future, femtocells—small cellular base stations designed for use in residential or corporate environments—will be adopted by operators with great enthusiasm. The lure is of greater network efficiency, reduced churn, better in-building wireless coverage, and the abilities to shape subscriber data usage patterns and to build platforms upon which fixed-mobile convergence services can be realized. A new study from ABI Research forecasts that by 2011 there will be 102 million users of femtocell products on 32 million access points worldwide.

"Femtocells offer many benefits to operators," says principal analyst Stuart Carlaw. "From a technological standpoint, their better in-building coverage for technologies such as WCDMA and HSDPA is an incredibly important aspect of service delivery. From a strategic and financial standpoint, the routing of traffic through the IP network significantly enhances network quality and capacity, and reduces the OPEX that carriers expend on backhaul. On a conceptual basis, femtocells allow carriers to price cellular data services in the home aggressively, with the ultimate goal of shaping consumer behavior."

The most interesting characteristic of femtocells, adds Carlaw, is that they can form the basis of a viable option for realizing converged fixed-mobile services. They give operators a cost-effective way to support fixed-mobile substitution, as well as a platform in the home upon which additional features such as Wi-Fi and IPTV can be layered.

However, Carlaw adds a note of caution: "This is a very nascent market and as such there is a pressing need for some standardization, or at least a common recognition of what a femtocell's minimum requirements should be."

The new ABI Research study, "Femtocell Access Points: Fixed-Mobile Convergence for Residential, SMB, and Enterprise Markets" provides some much-needed clarity to a market that lacks definition and is still in the early days of its development. It forms part of the company's Wireless Infrastructure Research Service, which includes research reports, regular market updates, forecast and industry databases, the ABI Vendor Matrix, ABI Insights, and analyst inquiry support.

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