GreenBkk Tech | Network congestion lifts home 3G station market

Network congestion lifts home 3G station market

Credit: Reuters (http://www.reuters.com)

Large snowflakes fall as people walk up Lexington Avenue in New York in this December 16, 2008 file photo.

Credit: Reuters/Chip East

By Tarmo Virki, European technology correspondent

Technology that improves mobile phone reception indoors is starting to break into the mass market as operators struggling with network congestion have started to distribute these devices for free.

A femtocell is a small, low-power indoor base station for 3G mobile phone networks, enabling operators who struggle with network capacity to improve indoor coverage at a much lower cost than the alternative of adding more large mobile phone towers.

The emerging femtocell market has so far remained a small business partly due to the high costs of technology, but this year the wholesale price has dropped below $100, enabling operators to give them away for free.

Google-backed Ubiquisys -- one of the top firms in the new market -- told Reuters it expects millions of femtocells using its technology to be sold next year, compared with 2010 volumes in hundreds of thousands.

"Operators around the world will follow Softbank in Japan by offering free (or bundled) home and retail femtocells," said Keith Day, marketing chief at Ubiquisys.

Several industry analysts are forecasting the market to surge in coming years, helped by falling prices, and to top $1 billion in two to three year.

Research firm In-Stat analyst Allen Nogee said he expected total market to top 1 million femtocells this year, compared with his 400,000 forecast unveiled six months ago.

"There have been some launches since summer and a few operators have started giving them away free to customers, like AT&T in some cities," he said.

In-Stat forecasts the femtocell market volume to grow to 31.8 million in 2014.

In addition to Ubiquisys, major technology firms like Cisco , Samsung Electronics, Alcatel-Lucent and Huawei make femtocells.

The devices are plugged into a customer's broadband Internet connection, like a wireless Internet base station, and allow users to make calls or use data services with their regular 3G mobile phones.

With near $100 smartphones starting to hit the stores, and use of video on phones starting to proliferate, most telecoms operators around the world are struggling with network capacity.

Fearful of losing customers, only a few have publicly admitted to the problem of keeping pace with data traffic, but 63 percent are experiencing difficulties, a global survey of 30 operators by telecoms software firm Amdocs showed last week.

Telecoms operators around the world are looking to upgrade their network technologies in coming years, with increasing use of femtocells seen as part of solution for many carriers.

In addition to Google Ubiquisys owners include Accel Partners, Advent Venture Partners, Atlas Venture and T-Mobile's

In 2010 Ubiquisys raised $14 million from investors including 5 Continents Consulting Group (5CCG), SerComm Corp. , UMC Capital Corporation, Pacific Venture Partners and Yasuda Enterprise Development Co.

(Editing by Greg Mahlich)

Credit: Reuters (http://www.reuters.com)