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Recession Slows Femtocell Deployments, But Only Temporarily
Posted: 20-Mar-2009 [Source: ABI Research]

[Global recession puts the skids on femtocell deployments, but ABI Research says that's only temporary.]

London -- The global recession is one of the factors that has put a brake on expected large-scale femtocell deployments by major mobile operators. However, according to a new study from ABI Research, the slowdown will only be temporary.

According to senior analyst Aditya Kaul, revised 2009 estimates project shipments at slightly less than a million. “Femtocell rollouts to date have been limited, controlled ones,” he says. “But ABI Research expects that 2010 will see shipments climbing well above a million units.”

Why the optimism amid so much gloom? “The signs are there that vendors are gearing up for a big push,” says Kaul. “For example picoChip, one of the industry’s main silicon suppliers, recently announced a multi-million dollar injection of funding, probably geared towards a ramp-up. There is a lot of similar activity behind the scenes, and new partnerships which point to preparation for a major market expansion.”

Femtocell investment can be done in stages with fairly low entry points, making it easier to justify in a tight financial market.

The starting gun for this race will be an announcement, which ABI Research expects to come late in 2009 or early 2010, of a multi-city commercial femtocell deployment by one of the major mobile operators. That, says Kaul, may encourage other operators to follow suit.

There are, however, near-term challenges facing vendors and operators alike. Price is one: ABI Research believes that although femtocell business models could be enabled at various price points, the psychological barrier of a $100 femtocell cannot be overlooked. Low-cost femtocells are essential to bridge the gap between niche market and mass-market deployments.

Also, until now, large-scale deployments have only been simulated in computer models: real-world rollouts could pose challenges.

Nonetheless, says Kaul, “These challenges are all valid, but none of them are show-stoppers – there’s no ‘elephant in the room’ that will pose a major obstacle to large-scale deployment.”

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