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Survey Finds Femtocells Appeal to 56% of US Consumers
Posted: 22-Jun-2010 [Source: Femto Forum]

[Survey finds consumers unfamiliar with femtocells but after learning about the femtocell and its benefits 56% found them "appealing" with the driver being improved in-home coverage.]

London -- International research firm Parks Associates today announced the results of the most comprehensive survey to date of U.S. consumer attitudes to femtocells, conducted on behalf of the Femto Forum. The survey, U.S. Consumer Attitudes on In-Home Mobile Services and Femtocells, found that more than half of U.S. broadband households with mobile phones are interested in femtocell benefits, and are willing to pay for the devices and associated new services. The findings also indicate femtocells can significantly improve subscriber satisfaction and lead many households to consolidate with a single operator.

The survey found that fewer than 10% of consumers were previously familiar with femtocells. However upon exposure to a description of the femtocell and its benefits, 56% of respondents found femtocells appealing - of these, two thirds found the technology either “very” or “extremely” appealing. Additionally, 89% of those respondents who were already familiar with femtocells found them appealing, suggesting that interest will increase as awareness grows.

The primary driver for femtocell interest was improved in-home coverage. Important secondary drivers included increased mobile handset battery life, faster mobile broadband, advanced femtocell services and home-zone calling tariffs. The survey found that 72% of consumers who found femtocells appealing were very interested in at least one advanced femtocell service. Examples of such services include Virtual Home Number, which rings every cell phone in the home, or Family Alerts, which warn when a subscriber has left or returned home. Furthermore, half of these respondents indicated a willingness to pay $4.99/month for their single favorite service or $9.99/month for a bundle of their favorite three services, illustrating a new revenue opportunity for operators.

Although Wi-Fi is sometimes viewed as a femtocell alternative, the survey showed that 84% of people who heavily use Wi-Fi on their 3G devices found femtocells appealing. Improved voice coverage and battery life were the top drivers for femtocell demand among these Wi-Fi users.

The study also revealed that femtocells can have a major impact on consumer satisfaction and loyalty. Among consumers who consider themselves likely to change operator in the next 12 months, 44% said that they would very likely reconsider if their current operator offered a femtocell. Similarly, 35% of consumers in multi-operator households said they would likely consolidate their services around a single provider who offered a femtocell.

Although over 90% of those who found the technology appealing expressed willingness to pay upfront for the device, respondents demonstrated sensitivity to the actual price level. Demand is highest when upfront device costs are in the $20-$50 range. This demand halves when in the $50-$100 range and halves again when the cost exceeds $100.

“The clear message from this research is that femtocells have widespread appeal and consumers are willing to pay for them. There is a major opportunity for operators to gain new subscribers by taking over the contracts of whole families, and by better retaining their existing subscribers,” said Harry Wang, director of mobile product research, Parks Associates. ”However, operators need to build their business models on market share gains and new service revenues rather than on upfront device purchase revenues alone.”

“It is rapidly becoming clear that there is widespread consumer interest in the benefits that femtocells bring. This research has shown that consumers want the core benefit of improved indoor coverage, but they are excited about the advanced services femtocells can offer as well. The survey also neatly illustrates how femtocells and Wi-Fi are actually complementary rather than competitive,” said Simon Saunders, The Femto Forum’s Chairman. “From an operator perspective, this survey presents persuasive evidence of the opportunity femtocells pose for mobile operators to improve customer satisfaction and loyalty while providing new and enhanced services.”

U.S. Consumer Attitudes on In-Home Mobile Services and Femtocells surveyed 1,100 mobile consumers in the U.S. over a 2-week span in May 2010. All respondents were 18 or over and had an equal or greater share in household decisions. The Femto Forum commissioned Parks Associates to conduct this custom consumer research in the U.S. as the first phase of a multi-national project. Parks Associates’ research director John Barrett will present the results of this study at the forthcoming Femtocells World Summit conference in London on 23 June at 2:10pm. A slidepack summarizing the results will be available on the Femto Forum website after the event.

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