3G Femtocell Market Gathers Steam - Analyst Blog

Femtocell is quickly emerging as a fundamental technology enabler in the deployment of high-speed 3G as well as emerging next-generation (4G) wireless network infrastructure. A femtocell is a small cellular base station, typically designed for use in a residential or small business environment. This access point communicates to the wireless service providers’ network through a broadband connection.

Using femtocell, a wireless operator can improve both coverage and capacity especially indoors where access would otherwise be limited or unavailable in a highly cost-effective way. This will reduce the carrier’s operating costs as well as capital expenditure.

U.S. is likely to undergo a massive wave of 3G femtocell in 2010. In September 2009, AT&T (T) became the first U.S. wireless service provider to deploy 3G femtocell base station. The company has started selling home base station radios in some select markets of the country. With this, AT&T beat its closest rival Sprint Nextel Corp. (S) that was claiming to become the pioneer in deploying 3G home base stations.

AT& T has developed its 3G femtocell using Cisco System Inc’s (CSCO) technical expertise. Recently, Sprint Nextel started shipping 3G CDMA EV-DO femtocells. Although Sprint Nextel is providing 2G CDMA femtocell since 2007 using Samsung Electronics’ chipset, the company is using Airvana Inc’s (AIRV) chipset for 3G femtocell.

Meanwhile Verizon Wireless (VZ), which launched its first 2G femtocell in January 2009, recently announced that 3G femtocell is one of its key projects and it is working hard to introduce it mainly targeting the business segment.

On the other side, in May 2010, Qualcomm Inc. (QCOM), the largest manufacturer of 3G mobile phone chipset based on CDMA technology, declared the technical details of its 3G femtocell chipset. The major innovation of Qualcomm’s 3G femtocell is that it will support both CDMA and GSM standards and the chipset will integrate femtocell base station with the baseband architecture. The product will be smaller and cheaper than the existing 3G femtocells.