10 Jan 2013

ABI Research: Femtocell rebound spells good news for industry

Femtocell sales bounced back in the second half of 2012, following difficult market conditions in the first half of the year, reports ABI Research.

Writing in its latest femtocell forecast update, the analyst business claims shipments, come the end of 2012, reached a little more than 2 million units.

Shipments in the second half of that year more than doubled from the first half, making up for some of the lost momentum.

“The appetite for femtocells continues to persist as suggested by this second half bounce, which can be attributed largely to inventory levels needing a refresh, but also due to renewals of contracts driven by newer versions of access points," says Aditya Kaul, practice director, mobile networks. "This is also evident in the continued growth in contracts which have reached a total of 130 globally, as per our estimates.”

Airvana, Alcatel-Lucent, and NEC/Ubiquisys remained the top vendors in terms of shipments, making up 78% of the total shipments in 2012.

“The lack of operator willingness to use femtocells as a competitive network quality differentiator, rather than a defensive churn reduction tool, continues to plague the market," adds Kaul. "Nevertheless, it is encouraging to see demand back up, with new markets such as Latin America and Russia lighting up."

"Competitive factors in certain markets are causing domino effects with one operator leading and the others following. This is enough to keep the momentum going forward, with new business models like femtocells as a service, adding to that momentum and bringing lower tier operators into the fold. Overall the market looks like it might be turning a corner,” he concludes.

The forecast covers the enterprise and consumer femtocells market, with enterprise femtocells making up one-third of the total shipments. Revenues from enterprise femtocells made up to two-thirds of the total revenue for femtocell access points.

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