Demand for femtocells set to soar

Demand for femtocells, which boost mobile reception inside buildings, is set to surge as new research predicts an installed base of nearly 70 million devices by 2012.

ABI Research said that this represents a turnover equal to one third of the Wi-Fi market.

Stuart Carlaw, a director at the analyst firm, said: "Carriers are generally enthusiastic about femtocells but are struggling to get a working, comprehensive business plan in place.

"It is important to consider that, no matter how attractive the service offerings a femtocell-based solution can bring, the sheer savings from backhaul and energy costs could equate to over $70bn by 2012.

"This will outshine service revenues and provide enough financial incentive for carriers to actively support this solution."

ABI Research also found that a third of consumers would be willing to spend a "considerable sum" on an upfront purchase of a femtocell just for the better in-home coverage it provides.

"This may contradict some of today's vociferous pressure from carriers on price erosion as a primary concern, and may suggest that there is room for a hybrid business model of up-front purchases with subscription fees," added Carlaw.

• ABI Research report: Femtocell Market Challenges and Opportunities: Cellular-Based Fixed Mobile Convergence for Consumers, SMEs and Enterprises