Market update for week of 10 Mar 2008

Softbank to launch femtocells in October

Softbank’s femtocell launch is being planned for October. Interestingly, they have been using in-home repeaters to test the concept, which suggests a basic coverage proposition - repeaters don’t provide any of the other, more interesting benefits that femtocells offer (private cell capacity for the home, homezone discounts, femtozone services…).

Softbank says it has architected its femtocell system around an IMS core, which again is interesting as most other operators have adopted Iu over IP. One remaining hurdle is that the Japanese regulator currently insists that only a qualified engineer can install a femtocell (despite the fact it’s no more complicated than switching on a kettle). Softbank is in negotiation to get this changed, allowing end users to install their own femtocells at home.

AT&T hints at femtocells

Commenting on AT&T’s “three screen initiative” (seamlessness mobility between your PC, mobile phone and laptop), senior vice president of consumer marketing, Michael Antieri, mentioned that AT&T is developing a single voice-plan that covers both mobile and home phone lines, and a single data plan for fixed and wireless broadband. Broadbandreports.com speculates that these bundles will be enabled by femtocells.

Femtocells in the International Herald & Tribune

The IHT reports a now familiar tale - massive uptake of data services (data traffic on T-Mobile’s high-speed wireless networks surged 61% in Q4) is driving demand for femtocells, which improve the quality of 3G mobile reception inside buildings.

Ericsson says wireless hotspots are doomed

“Hotspots at places like Starbucks are becoming the telephone boxes of the broadband era,” according to Ericsson CMO Johan Bergendahl. At a conference in Stockholm he said that WiFi hotspots will no longer be needed as more people start using mobile broadband. This accords with comments this week from Matthias Reiss, Head of LTE for Nokia Siemens Networks, who said that mobile data will increase a hundredfold by 2015, by which point 70-90% of the world’s internet traffic will be handled via mobile connectivity.

Techworld and ZDNet both point out that indoor 3G coverage will need to get a lot better before this vision becomes a reality (cue 3G femtocells, which Ericsson has so far overlooked).

But operators are concerned about mobile data profitability

The other issue Ericsson and NSN glossed over is whether mobile operators can afford to carry this much data traffic. Speaking at a Next Generation Mobile Networks (NGMN) meeting at the CeBIT technology fair in Germany, senior executives said flat-rate mobile-data tariffs meant usage was set to increase at a far greater rate than operator revenues. Therefore, they said, they would have to drive down the cost of providing mobile data connectivity if they were to continue to make money (cue femtocells again).

T-Mobile International CEO, Hamid Akhavan, said “We will see a complete decoupling of traffic and revenues. It is only a matter of time before we lose all profitability on mobile data.” He also said “the world doesn’t need any more cell sites”, and pointed towards femtocells as a potential solution. Hartmut Kremling, CTO of Vodafone Germany, agreed. “Site acquisition is more difficult these days. We need a technology based on existing density. Backhaul is already very challenging”. Lots more reasons for femtocells.

It’s not just Europe - mobile broadband use jumps 154 percent in US

The number of mobile devices accessing the internet via wireless broadband skyrocketed 154 percent in Q4 2007 compared with Q4 2006, according to research released by ComScore.

Informa comments on femtocells in its MWC roundup

“While 2007 was the year that the femtocell concept seeped into the consciousness of the mobile industry, 2008 will see the first operator trials. A number of operators have expressed interest in femtocells including Vodafone and Telefonica/O2 but there remains huge uncertainty about price and performance levels. France Telecom said retail prices would need to be below €100 for femtocells to be viable but some operators were being quoted wholesale prices of up to €300 in Barcelona. In terms of timing, operators expect that it could take 6-12 months to refine the software in femtocells and to address issues relating to interference.”

Forward Concepts publishes femtocell study

“Femtocells: The Emerging Solution for Fixed Mobile Convergence” concludes that…

• Femtocells will predominantly address the post-paid cellular subscriber base. As a result, North America, Western Europe, Japan and Korea will be the largest markets for them.
• Femtocells will capture the dominant Fixed Mobile Convergence market share by 2010, as UMA is deemed to be a transitional technology and cellular carriers will ultimately transition to IMS-enabled femtocells.
• The most significant technical challenge for femtocell operators will be RF interference which will require proper frequency planning by the operators.
• Global femtocell equipment revenues are forecast to grow at a CAGR of 126% from 2008 to $4.9 billion in 2012. Western Europe will be the largest market, driving 32% of the revenue followed by North America with a 22% share.
• Femtocell integrated home gateway shipments are projected to exceed 23 million units in 2012, passing stand-alone femtocells for over half of the market.
• Semiconductor revenue from both stand-alone and integrated home gateway femtocells will grow at a CAGR of 138% from 2008 exceeding $1.5 billion in 2012.

ABI reports on the Asian femtocell opportunity

A new study from ABI Research indicates that femtocells will generate revenue of nearly $5 million in 2008 from device shipments in the Asia-Pacific region. “While $5 million is a relatively modest sum in global terms, it is important to remember that it is generated from a market that barely exists yet, and as such it represents quite satisfactory early growth,” said ABI Research director Stuart Carlaw.

Regulatory complications may play a role in femtocells’ regional deployment too. The South Korean government has yet to finalize its fixed-mobile convergence policy, and ABI Research believes commercial femtocell services will not be introduced in the country until 2009. Femtocell prospects in India and China are heavily dependent on those countries’ 3G license developments.

Femtocells are girly crap

Interesting viewpoint.

Low power GSM back in fashion

Telco 2.0 review’s PMN’s enterprise proposition using low power GSM, powered by ip.access picocells. Elsewhere, Dean Bubley’s interest in low power GSM is reawakened.

Femtocells to be demo’d on the HSPA Mobile Broadband Pavilion at CTIA

Some of the demonstrations planned for the Pavilion include services that might be used “At Home” such as the “three-screen revolution,” using an HSPA femtocell to integrate the home IPTV experience with a mobile device and a PC.

In other news…

• Does T-mobile’s investment in Ubiquisys signal Google’s MVNO plans?
• Ubiquisys appoints new chairman
• picoChip & BitWave announce femto demo
• Details of Thomson’s femto-enabled TG870 home gateway