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Global Femtocells Market: Robust Demand for Residential Use the Single-most Important Factor Supporting Growth, finds TMR

Posted on Nov 08, 2016

The global femtocells market was a consolidated one with five dominant players accounting for over 80% of the market share in 2012. Of them Cisco and Airvana held over 20% market share each. While Cisco attained a solid foothold by the way of acquisitions, Airvana made its way to a superior position through futuristic innovations such as the world’s first end-to-end LTE femtocell solution for operators. The remaining three key players, namely ip.access Ltd., Samsung Electronics, and Alcatel-Lucent commanded somewhere between 11% and 15% of market share circa 2012.

Down the line, however, the analyst of the report predicts, the market dynamics would change with new players foraying into the space to make it fragmented. The scope for product differentiation is high and superior substitutes for femtocells such as picocells, which can cover far more devices than femtocells and are relatively cheaper, with higher capacity and lower operational cost, would negatively affect their demand.

The opportunity in the global femtocells market was worth US$375.3 mn in 2015, and it is predicted to be worth US$ 2,209.4 mn by 2019.

Demand for Residential Use, the Main Driving Force in the Market

Femtocells find application in bettering mobile network coverage. Wobbly indoor coverage in flats, residential buildings, and housing complexes – where almost 70% of mobile phone usage happens – have accounted for maximum demand in the femtocell market. To placate the large chunk of mobile phone users, complaining about poor network coverage inside their rooms and flats, mobile operators have given them femtocells to improve the network.

The residential femtocell market was worth US$1.2 bn in 2015 and is expected to reach US$2.7 bn by 2019. The enterprise world, not one to be left behind, has also leveraged femtocells, to cover large complexes which cause high signal attenuation. While larger companies with spacious buildings have installed superior quality picocells and DAS systems, smaller have mostly resorted to the relatively cheaper femtocells to boost the network. Femtocells are also being used to provide seamless services in various public spaces, where people use voice and data services on-the-go.

Besides the aforementioned applications, the global market for femtocells can also be segmented by technology such as 2G, 3G, and 4G. While 3G accounted for a lion’s share in the market a couple of years back, 4G is slated to overtake it in terms of growth to command over more than half of the market by 2019.

Geographically, North America led the global femtocells market in 2015, with a market value of US$581 mn and is expected to keep up the robust performance till 2019, when its market value is predicted to reach US$1548.5 mn. Europe would follow North America vis-à-vis growth, with Asia Pacific coming in third and Rest of the World in a distant fourth position.

Problem of Interference of Signals Taking a Toll on Market Growth

The unprecedented smartphone penetration, soaring use of data intensive services, namely browsing, emailing, and video streaming videos coupled with the rising ranks of demanding consumers has filliped the global market for femtocells. Its market, however, is experiencing stiff competition from Wi-fi and picocells, which provide better services on many counts. Wi-fi, for example, can offload data far better than femtocell and have other advantages such as ability to operate independent of spectrum, wide indoor coverage, and cancellation of interference. Again, picocells help avoid certain problems associated with femtocells.

The issue of interference is one of the major factors inhibiting market growth. The analyst of the TMR report explains, “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 (macro cells). This interference degrades the original network quality and results in poor performance.”

It not only degrades the consumers connected to femtocells, but can also cause interference problems to customers using the main macro cellular network. There are multiple scenarios where interference takes place, such as, femtocell interfering with base station using the same frequency, base stations interfering with femtocell on the same frequency and closely placed femtocells interfering with each other.

This review is based on the findings of a TMR report titled “Femtocells Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2013 – 2019.”

Global Femtocells Market, by Form Factor

  • Standalone
  • Integrated

Global Femtocells Market, by Technology

  • 2G
  • 3G
  • 4G

Global Femtocells Market, by Application

  • Residential
  • Enterprise
  • Public

Global Femtocells Market, by Geography

  • North America
  • Europe
  • Asia-Pacific
  • Rest of the World

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