Cisco pours cash into U.K. femtocell developer

A further sign that the femtocell market is gaining increasing legitimacy has been Cisco's investment in the UK-based developer ip.access. This move by Cisco, which has made many speculative investments in wireless networking technology, not all successful, is its first into the femtocell business--albeit for an undisclosed amount.

However, the company was less than open about its plans for the technology: "Our intent and purpose of our investment in ip.access is to learn more about this technology," says a Cisco spokesman. "For ip.access, we hope to provide the benefit of our industry contacts as well as our expertise in IP networks."

Supporting this investment case is a new study from Frost & Sullivan that claims femtocells could find their way into tens of millions of homes in Western Europe in two years' time. The report predicts subscribers in this region will number more than 21 million by 2010, rising to more than 39 million by 2011.

However, the market research firm points out that one barrier to resolve is the need to reduce the cost per unit of the hardware so that consumers are not put off by a high price tag. But Frost & Sullivan suggests operators may get around this by renting femtocells to customers.

Luke Thomas, an analyst with the firm, said, "Operators have realised that it would be a long time before the cost of the femtocell will reach €100. They are now considering renting out femtocells to users for a long contract period, rather than allowing them to buy it outright."

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