Femtocells: An Attractive Alternative?

Femtocells, which are the small base stations installed in homes, basements to provide you with additional cellular capacity, coverage and potential cost savings, are being seen as an alternative to Wi-Fi cellphones. But Indian market is yet to gear up for this emerging technology despite its advantages.

In India, demand for Wi-Fi cellphones is gradually picking up. If operators are ready to deploy femtocells in line with the hue and cry from subscribers about the poor quality of services, it could dent the growth of Wi-Fi enabled phones.

Sprint is one of the pioneer companies offering femtocells to consumers in Denver and Indianapolis for $50 apiece, along with an offer of lower-priced calling plans. Once the prices are negotiated and set low,it would be a threat to the Wi-Fi modems as well.

Chris Taylor, director of Strategy Analytics' RF & Wireless Component Service says, "We believe that femtocells will attract wireless operators and consumers alike. However, the bill of terials for femtocells will have to fall close to that of cellphones that include Wi-Fi chipsets for femtocells to really take off."

Recently, picoChip has developed inexpensive baseband processors for very low-cost femtocell base stations that can be installed in the home. These femtocells, according to the research firm, can potentially reduce the demand for cell phones that include Wi-Fi-a trend believed to emerge in high volumes over the next years to support the convergence of fixed and mobile communications.

Nonetheless, analysts all over the world are eyeing femtocells as a viable option for successful growth. ABI Research has projected the growth of femtocells around 70 mn in use by 2012. However, In-Stat forecasts have not been that positive as they forecast 40.6 mn femtocells to be distributed around the world by 2011.

With 3G nearly knocking the doors of the subscribers, Femtocells could be the next awaited buzz though Indian operators have yet not shown a positive stance on it. Reliance, Bharti Airtel and Vodafone had joined Femto Forum sometime back but they haven't started deploying femtocells. The cost of femtocells is a deterrent. Besides, there are some technical challenges associated with femtocells. Experts believe that it should be able to take care of the challenge of radio interference between femtocells
and the public infrastructure macrocells.

The femtocell market, which was expected to be initially at $434 mn in 2009 will reach $9 bn by 2014. The rapid growth is expected to occur because of the large size of the wireless handset markets, the billions of subscribes that must be supported. The femtocells provide core infrastructure at a lower price than other alternatives which could be seen as a possible challenge to the Wi-Fi. By using a femtocell, customers will send their voice and data traffic out their own DSL, cable, or fiber connection to the Internet, and then to the carrier's network. Thus the emergent need to be connected via a Wi-Fi phone will reduce to a greater level.

Cisco is even opening up the possibility of femtocells being integrated into other consumer entertainment hardware, such as set-top boxes. As of now the response to the femtocell market by the Indian operators has been dismal but with the multi-dimensional use, femtocells might be just another buzz that Indian operators may eye on.