LONDON Femtocell shipments will grow from 0.2 million units in 2009 to 12 million units worldwide in 2014 demonstrating a compound annual growth rate (CAGR) of 127 percent, according to Berg Insight (Gothenburg, Sweden).
Femtocells are small cellular base stations that use broadband connections for backhaul, intended to extend coverage and offload the mobile macro network in home and small office environments. The European, North American and advanced markets in Asia Pacific will account for the vast majority of femtocell shipments in the foreseeable future. In many other countries worldwide, the penetration of fixed broadband connections is much lower and 3G services less developed. By 2014, there will be almost six femtocells per macro base station and the number of users that connect to a femtocell on a regular basis is estimated to surpass 70 million.
The scope for femtocells to expand network capacity is, however, initially rather limited because better alternatives already exist. Data traffic has surged lately, pushing many mobile networks to their capacity limit.
"Virtually all PCs and most smartphones are already Wi-Fi enabled and are thus able to leverage the large installed base of Wi-Fi access points available in homes, offices and public buildings," said Marcus Persson, telecom analyst, Berg Insight. For the moment, many people are not willing to install yet another box in their homes unless it can add significant value beyond what Wi-Fi already brings today, he added.
To begin with, the industry needs to prove that femtocells can be deployed without causing adverse interference. Femtocells also need to become sufficiently standardized to ensure efficient integration and low cost per unit. More importantly, "operators need to find and adjust business models that make femtocells attractive for their customers, who will ultimately buy or receive femtocells for placement at their premises," Persson concluded.