Femtocells: Price remains stumbling block to early uptake, claims report

While some vendors of femtocells are forecasting unit shipments as high as four million by the end of 2010, the limited number of commercial deployments is making predictions difficult for market researchers. However, according to a new report from Unstrung Insider, the biggest single concern for operators and vendors is consumer reluctance to pay the high price being asked today.

The report's author, research analyst Tim Kridel, believes that around 500,000 femtocells will ship this year, but claims that femtocell vendors are expecting that individual orders from carriers aren't likely to be larger than 10,000 to 20,000 units until at least late 2010.

Some vendors are expecting an eightfold increase in shipments to 4 million units by the end of 2010. "Other vendors expect the 2010 volume to be about one million," writes Kridel.

A US$100 wholesale price for femtocells is generally seen as the cost point that will encourage better adoption by operators, but there have to be more orders booked before that target could be hit, maintains Kridel. "Vendors and operators agree that US$100 is the sweet spot in terms of triggering large orders and aggressive deployments. However, that price point is unlikely until late 2010 because it will take that long before carriers start to place the large orders necessary to drive down costs."

On a brighter note, the report states that femtocells will shoulder the additional task of reducing the macro network's Capex and Opex by diverting 3G data traffic onto the broadband provider's network, thereby reducing the need to split cells, add radios at existing cell sites, and/or expand backhaul capacity.

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