FEMTOCELL MARKET ANALYSIS

In the telecommunications sector, a femtocell is a small, low-power cellular base station, particularly designed for use in a home or small business. It is typically used to improve mobile network coverage. These plug and play devices use a broadband connection to connect to the cellular operator. Femtocells can improve the transmission of both voice and data and have thus, gained the attention of consumers. There are different types of femtocells available in the market such as 2G, 3G, and LTE. Femtocells are low power wireless access points that connect mobile devices operators’ network using cable broadband or residential DSL connection. These devices enable a network operator to provide high quality and high-performance voice and data transmission to its subscribers.

The global femtocell market is estimated to be valued at US$  6,268.3  million in 2021 and is expected to exhibit a CAGR of 13.3%over the forecast period (2021-2028).

Recent Developments:

In October 2021, Nokia and TPG Telecom announced that they have deployed the Asia Pacific region’s first 5G femtocell in a live network. Using Nokia’s unique modular 4G/5G Smart Node, the solution allows operators to provide their customers with superior indoor 5G coverage from a dedicated femtocell.

In February 2021, Xilinx, Inc., the leader in adaptive computing, announced that the company is supplying its leading UltraScale+ technology to Fujitsu Limited for its O-RAN 5G radio units (O-RUs).

Major market players are involved in product development, in order to gain a competitive edge in the market. For instance, in August 2017, Telefonaktiebolaget LM Ericsson launched three new small cell solutions namely multi-operator dot, multi-dot enclosure, and strand-mount unit.

Figure 1. Global Femtocell Market Value (US$ Mn), by Region, 2020

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North America held dominant position in the global femtocell market in 2020, accounting for 32.9% share in terms of volume, followed by Europe and Asia Pacific, respectively. Owing to rising use of mobile phones and saturating telecommunication market.

Global Femtocell Market: Drivers

Rising use of mobile phones and saturating telecommunication market in developed countries is expected to drive growth of the global femtocell market during the forecast period

The usage of internet data has increased massively in the recent past with high growth of smartphones market. This, in turn, has increased the demand for quality network coverage so that users can enjoy streaming video and browsing seamlessly. According to Coherent Market Insights’ analysis, over 50% of all voice calls and more than 70% of data traffic originate from indoors. Furthermore, consumer use of mobile phone indoor has increased, owing to rising popularity of social gaming. In emerging economies, telecommunication market is at a saturation stage and thus mobile phone operators are adopting strategies to make improvements in their services and enhancing network coverage. Thus, these factors are expected to drive growth of the global femtocell market during the forecast period.

Growing demand for femtocell to cut cost is expected to propel the global femtocell market growth over the forecast period

Increasing adoption of smartphones has led to a massive surge in data traffic. Mobile network operators are offering high-quality network services at low cost, in order to satisfy consumers requires in different regions. As the distance between a receiver and a transmitter decreases, there is an increase in the signal to interference plus noise ratio (SINR), which decreases the system capacity. Through cell size reduction by using femtocells, system capacity can be increased. However, the capital expenditure in the installation and maintenance of these macrocells is very high. The costs of the base station and the required backhaul connectivity are expensive and site acquisition for installing macro base stations is very costly and difficult. Therefore, operators are focused on low-tier femto base stations, which are short-range, customer-owned, low power, and low-cost base stations and are very helpful for improving cell capacity. Hence, these factors are expected to propel the market growth over the forecast period.

Global Femtocell Market: Opportunities

Rising adoption of femtocells in enterprises can present major business opportunities

Although the demand for femtocells has decreased in in-house applications, femtocells are expected to witness high demand in the enterprise segment. In the enterprise segment, these devices can be used to deliver better network indoor coverage and can connect to multiple devices including smartphones, tablets, and other connected devices. Femtocells can also be used as an alternative to picocells or DAS (Distributed Antenna Systems) owing to their cost-effectiveness. In enterprises, femtocells can also be used to route calls through an enterprise PBS (Performance Based Standards) to office extensions and mobile phones.

Increasing applications in heterogeneous networks can provide lucrative growth opportunities

There is an exponential growth in data over cellular networks as users transfer data, download videos, and use smartphones and tablets as their main source for internet usage and communication. As data levels are increasing and cost per bit level is falling, operators need to meet the demand while still retaining their profit margin. To achieve this, operators look for new ways to carry data over a network. One of these ways is the reduction in cell size. As the size of cell is bigger, the capacity per person is low as a large number of users have to share the same capacity. If the cell coverage area is reduced, the capacity of cell is shared among only a few users. This results in high-performance levels with faster data speeds.

Market Trends:

Stringent regulatory policies limiting growth of femtocells

Since the government regulatory policies vary from country to country, the demand for femtocells has been hindered. There are strict regulations for purchasing spectrum and renewing it after the specified period. Furthermore, regulatory authorizations mandatory before introducing any new technology or service in the market. As a result, the delay caused by regulatory procedures defers the entry of product or service into the market thereby hindering product growth.

The market is expected to witness fragmentation in the near future

The U.S. holds the largest market share at present. There are highly mobile and broadband penetration in Western Europe and Asia Pacific region: mainly in countries such as South Korea, Japan, India, and China among others. Thus, these regions offer high opportunities for the femtocells market in the near future.

Figure 2. Global Femtocell Market Share, By Form Factor, 2020

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Key Takeaways of the Graph:

• Among Form Factor, the Standalone held dominant position in the market and accounted for 53.1% share in the global femtocell market in 2020. The segment is expected to reach US$ 7,964.5 million in 2028.  Owing to rising adoption of femtocells in enterprises.
• Among application, the Residential held dominant position in the market and accounted for 58.9% share in the global femtocell market in 2020. The segment is expected to reach US$ 7,901.28 million in 2028. Owing to rising use of mobile phones and saturating telecommunication

Global Femtocell Market: Restraints

Continued competition with Wi-Fi is expected to hamper the global femtocell market growth over the forecast period

Femtocells have been widely accepted by mobile users in both residential and public areas to improve their network quality and bring faster data rates. However, they are facing strong competition with Wi-Fi since these devices can offload data traffic much better than femtocells. Furthermore, Wi-Fi offers various advantages over femtocells such as independency on spectrum, wide indoor coverage, high power levels, interference cancellation, and high data transmission. Rising adoption of Wi-Fi by both network operators and in-house customers is posing a challenge to the femtocell providers. Thus, these factors are expected to restrain growth of the global femtocell market during the forecast period.

Constant interference with macro telecommunication market is expected to hamper the global femtocell market growth over the forecast period

A major restraint associated with the use of femtocells is the problem of interference. Femtocells utilize the same spectrum allocated for cellular telecommunication. These devices are deployed in an ad-hoc fashion without network planning as done in the case of deployment of cellular telecommunication base stations, i.e. macrocells. This interference degrades the consumer connected to femtocells as well as cause problems to the main macro cellular network. Therefore, these factors are expected to hinder the global femtocell market growth in the near future.

Global Femtocell Market: Competitive Landscape

Key players operating in the global femtocell market are Airvana LLC, Texas Instruments Inc., Alcatel-Lucent SA, Samsung Electronics, Cisco Systems Inc., Nokia Solution, and Networks, Telefonaktiebolaget LM Ericsson, Netgear, Inc., Gemtek technology Corp., NEC Corporation, and ip.access, Ltd.