Two significant announcements from Vodafone and Cisco demonstrate that heavyweight players are taking the market for indoor base stations (femtocells) seriously.
Vodafone is taking some very practical and tangible steps to address poor indoor coverage and the potential revenue opportunity.
Principal Analyst Andrew Parkin-White believes that Vodafone's femtocell trials "will help to resolve the technical issues associated with large scale femtocell deployment, and allow the operator to evaluate a number of commercial options for femtocells."
Cisco has acquired an equity stake in UK-based femtocell specialist, ip.access, building on Cisco's recent investments in Linksys and set-top-box manufacturer Scientific Atlanta.
"This is an interesting move from Cisco, allowing it to leverage and integrate its IP networking capability into the wireless environment," says Parkin-White, co-author of the latest Analysys report 3G Network Evolution from 2007 to 2012: HSPA+, LTE, WiMAX and femtocells. In contrast to current wisdom, this report concludes that HSPA+ (combined with femtocells and a broadcasting network) has greater potential than LTE over the next five years.
"If there is a time to take a serious look at femtocells in the context of an overall evolving 3G architecture, that time is now," Parkin-White says.
In 2007, Analysys Research conducted extensive analysis into the potential market for femtocells, and found that they have the potential to become a disruptive technology in the mobile world.
"MNOs are finally considering how femtocells fit into their overall technical approach. Femtocells appear to offer the possibility of a lower-cost strategy for cellular network architecture and build. Furthermore, they may offer the potential to unlock new sources of revenue, by allowing an operator to launch a range of innovative services for the business and consumer markets," says Parkin-White.
On the other hand, Parkin-White urges MNOs to ignore the hype and speculation, and take a balanced view of the potential of femtocell services in these markets.
"There is no guarantee of success without a carefully developed business plan that puts forward a practical and profitable approach to the deployment of femtocells," says Parkin-White.