Femtocells: Coming to a Home Near You

Femtocells are cellular access points, much like small base stations, that provide mobile coverage within a building by connecting to a mobile operator’s network via a fixed broadband connection. Femtocells can be installed in homes or small offices. When a femtocell is in operation, subscribers’ cellular phones transition between the femtocells and the carrier’s cellular network depending on which one provides more optimal RF signal conditions at the time. Femtocells work much like Wi-Fi hotspots, except for the fact that they power transmissions over a wireless carrier’s licensed spectrum. Current femtocells are carrier and network-specific.

Although femtocells, originally referred to as Access Point Base Stations, have been in existence since 2005, it is only in the last year that these solutions have become widely known and accepted. For end users, femtocells can mean better cellular coverage in their homes or offices, as well as reduced cellular service bills. For mobile operators, femtocells can be a competitive advantage when attracting new customers or expanding services to existing subscribers.

An important factor is the cost of femtos. The industry consensus is that femtos – cellular or WiMAX – must sell for less than $100 in order to become mass market devices. That goal is about one-third the current wholesale price, so sub-$100 devices will require a combination of cost-cutting by vendors and subsidies by service providers. An example of the latter is Sprint’s Airave, which sells for $50 because of deep subsidies by Sprint.
The obvious question is, can service providers make a business case for deep femto subsidies? This report answers that question and provides detailed discussion of the technological components of femtocells, femto industry standards, and potential problems and opportunities associated with femtocells. The report also provides profiles of current vendor and carrier femto solutions, as well as a five-year forecast for femtocell market penetration.

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