Carriers Should Brace for a 3-4 Year Investment Before Expecting Profits From Femtocells

The femtocell industry is at a crossroads. Carriers are directing some of their attention away from the technical aspects of the solution and more towards the fundamental questions around how they can make money out of the technology and what their go-to-market strategies should look like if they are to obtain the best results. 

Recent assessments from ABI Research suggest that carriers need to be thinking more about the long term when formulating their femtocell strategies, as it appears likely that they will only begin to see profits from any femtocell solution three or four years after the inception of the service.

Research director Stuart Carlaw says “Our studies found that the margins carriers would expect to receive from backhaul OPEX savings and subscription revenues alone provide little incentive to adopt this technology.” He adds that, “It is imperative that carriers look to new value-added revenue streams, subscriber capture from other competitors, and innovative service offerings in order to make money out this play. Voice alone will not be a long term winner.”

A new report from ABI Research entitled “Femtocell Business Models” finds that femtocell ASP has far less bearing on cost than the ongoing support and marketing needs that will be essential to making any service launch successful. The study includes a dynamic, user-definable, Excel-based model that incorporates 28 different input variables, from the breakdown of costs to uptake and user traffic. It profiles an exhaustive list of output data on costs, revenues and provides 144 different margin analyses accounting for every potential outcome derived from the mix of variables.

It forms part of the firm’s Femtocell Research Service, which also includes other Research Reports, Research Briefs, Market Data, ABI Insights, the ABI Vendor Matrix, and analyst inquiry support.

ABI Research is a leading market research firm focused on the impact of emerging technologies on global consumer and business markets.  Utilizing a unique blend of market intelligence, primary research, and expert assessment from its worldwide team of industry analysts, ABI Research assists hundreds of clients each year with their strategic growth initiatives.  For information, visit www.abiresearch.com, or call +1.516.624.2500.