2010 Femto Market Inhibited by Legislation

Global femtocell shipments generally met the expectations of ABI Research analysts in 2010, but one salient exception demonstrates how a simple regulation can impede a market’s growth.

“About 1.3 million femtocells shipped into world markets in 2010,” says Practice director Aditya Kaul. “That number is in line with ABI Research’s forecasts. The total could have been significantly higher – perhaps 20% higher – were it not for the continued low performance of the Japanese femtocell market.”

That low performance can be traced to a simple cause: the Japanese government’s unique requirement that every femtocell be installed by a qualified technician. When those truck-rolls are multiplied by hundreds of thousands of installations, the drag on the market is no longer trivial. Mobile network operators have long called for the removal or relaxation of this rule and the regulator presaged action early last year, but no change has been seen as yet.

Other regions do not carry that burden, and other markets have been further stimulated by offers of free femtocells from operators: AT&T generated good traction when it started shipping free femtos in 2010. Its reward for the largesse? Customer retention and greater “stickiness.”

“Based on contracts awarded, ABI Research expects 3-4 million femtocells to ship in 2011,” Kaul continues. “If operators start shipping femtos to their top 2% ‘data hogs’, that would really drive the case for data offload. Used as strategic tools, femtos not only retain customers but relieve network strain, enable femtozone apps and other services, and partner well with devices like the iPad. We should see that trend start to take off in 2011 or 2012.”

ABI Research’s “Femtocell Market Data” provides a biannual update to the core forecasts included in ABI Research's "Femtocells" Research Report. It is designed to provide an update incorporating all major changes in the market over the previous six months.

It is supplemented by the firm’s Femtocell Ecosystem Chart which maps out the equipment vendors, operators, system vendors and silicon suppliers across the femtocell value chain. The chart provides a snapshot profile and recent femtocell activity for each value chain member, and helps to clarify the relationships between the vendors, operators and suppliers.

Both are part of the Femto and Small Cell Research Service.

ABI Research provides in-depth analysis and quantitative forecasting of trends in global connectivity and other emerging technologies. From offices in North America, Europe and Asia, ABI Research’s worldwide team of experts advises thousands of decision makers through 29 research and advisory services. Est. 1990. For more information visit www.abiresearch.com, or call +1.516.624.2500.