Femtocells have moved into the mainstream following deployments by a range of cellular operators around the world. AT&T, Sprint, and Verizon offer services nationwide in the U.S., as do many other major operators globally including Vodafone, NTT DoCoMo, and China Unicom. The reason is simple—no other technology can economically provide such a comprehensive improvement to cellular voice and data services.

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Since the Femto Forum inaugural market status report last November, operator commitments to femtocell deployments have surged by 75%. The technology has now been deployed across three continents with a total of 10 live commercial networks and four further commitments.

But operators aren’t the only ones demonstrating a growing interest in femtocells. ABI Research says that 50% of U.S. consumers are interested in a femtocell for their home. With more and more services being rolled out globally and operators refining their propositions, femtocells are set to become a mass market phenomenon.

Growth Drivers

The rapid growth in operator interest in femtocells has been aided by the fact that the barriers to femtocell deployment have tumbled. Chief among these have been the challenges surrounding the business case and the need for industry standards. It is difficult to overstress the importance of cellular industry standards.

Put simply, proprietary infrastructure technologies are never widely deployed. As such, the recent completion of the 3GPP2 femtocell standard taking place simultaneously with the first plugfest for its 3GPP counterpart is enormously important. The specifications describe all aspects of an SIP/IMS-based femtocell architecture for CDMA2000 networks and devices. It will ultimately ensure that devices and network elements from different vendors interoperate effectively.

Simon Saunders, chairman of the Femto Forum, is an independent wireless communications specialist with more than 20 years of industry experience. He has consulted for a range of companies including O2, Ofcom, NTL, BT, Motorola, and BBC. In May 2007, he was appointed to Ofcom’s Spectrum Advisory Board as well.

But ensuring that the standard really delivers on this promise requires interoperability tests, also known as plugfests. The first of these plugfests was recently carried out to verify and ensure support for the 3GPP W-CDMA femtocell standard, which was completed in April last year. The plugfest featured more than 20 companies including major equipment vendors and niche providers.

Equally important has been the increased clarity surrounding the femtocell business case. The Femto Forum updated its business case research in February and found that operators can realize an overall return of 10 times on their femtocell investment mainly through cost saving arising from macrocell data offload. The flexibility of the femtocell business case is already being demonstrated by the wide variety of operator propositions on offer. These include packages where the femtocell and associated service are provided for free to loyal customers.

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