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Femto competition driving free offerings

T-Mo is using wifi to boost coverage at home

A growth in markets with multiple femtocell offerings is driving operators to offer the products for free, according to a new study from Informa Telecoms & Media. Femtocell services are currently available in 23 countries around the world, and 43 per cent of these countries have multiple operators offering the technology, the firm said. For the majority of these countries, at least one operator offers the devices free of charge.

Informa identified that the growth is being driven by the falling costs of femtocell technology as economies of scale and competition increase. Over the past quarter, important progress has been made in the evolution of femto chipsets with new launches from Cavium, Freescale, Qualcomm and Texas Instruments. These join existing chipset vendors – Broadcom, DesignArt, Picochip and Mindspeed.

“We are seeing evidence that once one operator deploys femtocells in a market there is strong pressure on its competitors to offer a rival service. This competition is in turn starting to drive free femtocell offers as operators look to differentiate their services. These free offers have become commercially viable as the costs associated with femtocells start to fall due to vendor competition and economies of scale,” said Dimitris Mavrakis, principal analyst at Informa.

New femtocell deployments in the past quarter include Vodafone Netherlands, Vodafone Czech Republic, Vimpelcom in Russia and Cosmote in Greece. There are currently 36 femtocell deployments globally, 14 further commitments, and, as of June 2011, in excess of 2.3 million femtocells active both privately in homes and offices, as well as publically in metropolitan and rural environments.

There are more 3G femtocells than conventional 3G base stations globally and Informa forecasts growth to continue with 48 million access points in use globally by 2014. Eight of the top ten mobile operator groups by revenue offer femtocell services, including AT&T, France Telecom, NTT DoCoMo, Sprint, Telefónica, Deutsche Telecom, Verizon Wireless and Vodafone.

The expansion of the femtocell industry is also reflected in the growing membership of the Femto Forum, the femtocell industry association. Its newest members include Asahikasei Microdevices Eircom, Femtocell Communications Zimbabwe, Free Mobile, Idirect, Nomor, Polska Telefonia Cyfrowa S.A. and TOT PCL. The Forum’s membership includes 70 vendors and 66 mobile operators representing over 1.94 billion mobile subscribers worldwide, across multiple wireless technologies and accounts for 34 per cent of total mobile subscribers worldwide.

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