The global femtocell market is poised for explosive growth over the next five years, as forecasts predict that the number of units shipped will balloon from 1 million this year to as high as 62 million by 2014.
Analysts expect falling prices, rising demand from enterprises and more metro market deployments to provide the momentum. But operators say their equation is missing an important factor: new femtocell-based services.
"The real adoption of [femtocells] is going to occur not when you have this perfect coverage solution," said Mike McRoberts, director of product management and development at Sprint Nextel Corp., which commercially launched its femtocell, AIRAVE, in 2008. "It's when you go to the next step and [offer] some compelling new services are built to operate on top of it so the customer has both a coverage reason and, more importantly, a service capability they don't have today."
Applications based on presence and location that work in tandem with femtocells not only have the potential to boost demand and a service provider's stickiness, they also give operators the justification to monetize the devices, McRoberts said.
Operators aren't going to get rich off femtocells and will often have to eat the cost of deployment by giving them away to consumers and businesses, acknowledged Rob Riordan, executive vice president for Nsight, the parent company of Cellcom, a regional wireless carrier in Wisconsin. But services and applications will generate new revenue streams and improve customer retention, he said.
The ability to use location and presence information from a femtocell in the home or the office to automate some applications has generated a lot of interest at Cellcom -- specifically, applications built on the Android platform, Riordan said.
Beyond traditional location-aware status update applications, Cellcom is also working on a service via its IMS-based network that would allow customers to queue music downloads on their Android devices, he said. The downloads would commence only when the device detects that it is connecting to Cellcom's network via a femtocell, which provides faster throughput.