Femtocells look promising, but care is needed

Carriers should be careful when developing a plan to deploy femtocells, according to a new report from Analysis.
The firm said widespread deployment of the indoor base stations could begin as early as next year, but that large-scale rollout of femtocells is risky because many early business cases are not commercially viable.
“Femtocells are progressing rapidly from being an interesting emerging technology to being ready for mobile operators to deploy,” said Alastair Brydon, co-author of the report. “Engineering departments within mobile operators have generally led the evaluation of femtocells but the next critical step is to define a profitable business case, based on clearly targeted and compelling customer propositions.”
However, the report says widespread use of femtocells used solely to provide low-priced voice service in the home could be disastrous because the revenue benefits are highly uncertain. Analysis said operators should target key market segments and resist very low pricing.
“A strategy underpinned by a range of multimedia service propositions will result in a much stronger business case for femtocells, bringing the potential to increase revenue and save substantial costs, and offering operators the chance to recoup their investment within one to eight months, depending upon the scenario modeled,” said Analysis. “Applications such as mobile TV, video and audio services will significantly broaden the consumer appeal of femtocells.”