LONDON, September 1 /PRNewswire/ --

Apart from a few mobile operators, most European operators will continue
to trial femtocells in 2009 with commercial deployments of standard-based
femtocells projected to occur in 2010. Commitment to wide-scale deployment of
femtocells are subject to trials but also dependent on equipment
certification based on industry-accepted standards.

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New analysis from Frost & Sullivan (http://www.wireless.frost.com),
European Femtocells Markets - Not Quite There Yet!, finds that by 2014, there
will be 11.8 million femtocell subscribers with femtocell vendors generating
revenues of approximately euro 401.2 million.

As 3G is deployed further down the frequency band, by the laws of 
physics, the wavelength of the signal reduces, providing smaller coverage.
Hence, carriers need to deploy more base stations to meet coverage and
capacity requirements, resulting in higher capital expenditure (CAPEX) and
operational expenditure (OPEX). "Carriers are therefore evaluating femtocells
as a solution to reduce the cost factor and enhance indoor quality of service
(QoS) for 3G, considering the fact that more than 90 per cent of mobile data
services are accessed inside buildings, and the cost of 3G handsets are on
the decline," explains Frost & Sullivan Programme Manager Luke Thomas.
"Stronger 3G signals inside buildings imply faster data rates."

Furthermore, as femtocells are connected to the user's broadband network,
the user, instead of the carrier, would have to pay for backhaul traffic to
the latter's core network. This results in enhanced cost benefits for mobile
carriers.

The underlying factor for the success of femtocells lies in its costs. A
fair majority of vendors claim that the current stand-alone 3G femtocells
average around euro 150. However, others opine that these would not include
'added features', such as interference management and seamless mobility
mechanisms for handover-in and handover-out between the macro cell and
femtocells, the incorporation of which could eventually cost around euro 250
to euro 275.

"With an integrated home gateway with femtocell technology, the cost
could easily reach euro 300 to euro 400 in the initial phases till high
volumes drive the cost down," remarks Thomas. "Therefore, initial deployments
will either witness stand-alone 2G femtocells that can upgrade to 3G or
standalone 3G LTE femtocells."

It is crucial that chipset vendors reduce chipset costs, which are
currently approximately euro 50. In order to reach the euro 100 mark for
femtocells, many opine that chipset costs alone need to be about euro 8-10.

Pricing models must be made transparent to the end user without creating
any confusion. This is essential because, eventually, end users would rent
out femtocells from the carrier and, if they do not gain any monetary
benefits, the business case will be lost.

"Operators must acknowledge that femtocells differ from the market
segmentation done for mobile devices," concludes Thomas. "Therefore, they
should segment the femtocells market by price performance sensitivity
factors, such as users wanting to pay less for unlimited voice and data
traffic or users who are willing to pay a premium to get better coverage
inside buildings."

European Femtocells Markets - Not Quite There Yet! is part of the Mobile
& Wireless Growth Partnership Services programme, which also includes
research in the following markets: European Mobile Broadband (EuMoBro) Melee
between 3G LTE and Mobile WiMAX, European Mobile Messaging Markets, European
Mobile Premium Content Markets, European Femtocells Markets and Social
Network Analysis - Looking Inside Mobile Communities Sustainability in
Telecoms. All research included in subscriptions provide detailed market
opportunities and industry trends that have been evaluated following
extensive interviews with market participants.

If you are interested in a virtual brochure, which provides a brief
synopsis of the research and a table of contents, then send an e-mail to
Joanna Lewandowska, Corporate Communications, at joanna.lewandowska@frost.com,
with your full name, company name, title, telephone number, company e-mail
address, company website, city, state and country. Upon receipt of the above
information, a brief brochure will be sent to you by e-mail.

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European Femtocells Markets - Not Quite There Yet
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    Contact:
    Joanna Lewandowska
    Corporate Communications - Europe
    P: +48-22-390-41-46
    E: joanna.lewandowska@frost.com

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