ABI: Picocells' Future Linked to Femtocells, SMB Market
December 15, 2008 // Published as a news service by IHS
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Much attention has been devoted to femtocells' potential to improve indoor cellular coverage, even though an older technology - the picocell - has existed for about a decade.
According to ABI Research, picocells provide larger coverage and capacity than femtocells, making them well-suited to small and medium businesses.
Yet global shipments of picocells will total only about 18,000 this year.
"One major reason for picocells' low penetration has been their high total cost of ownership," said ABI Research senior analyst Aditya Kaul.
"Picocells are mostly operated and maintained by mobile operators, and every installation and service call costs them money. Many operators underestimated these costs when they initially opted for picocells."
The market has also focused on the minimal ownership costs of femtocells, analysts said. Operators have avoided picocells because they've been waiting for femtocells to be thoroughly tested and trialed, and for standards to be established.
How can the leading picocell vendors, such as RadioFrame Networks and ip.access, remedy the situation? "An important step will be the introduction of an innovative 3G (third generation) picocell," said Kaul. "Today, there are only a few 3G picocells in the market, but they still have high ownership costs."
Analysts said 3G's architecture should permit integration of the controller with the base station, reducing cost and allowing picocells to more closely approach femtocells' plug-and-play ease of use.
There is a time-limited chance for picocells to secure a larger market. "There is a gap between the small capacity provided by femtocells and that required by SMEs [small and medium enterprises]," Kaul said. "Picocells can fill that gap, but only if the next generation has drastically reduced ownership costs.
"'Super femtos,' which are essentially femtocells with picocell capacities, are also being prepared for this market, and home-grade femtos could see some use in the SMB [small to medium business] market, once interference and handover issues are resolved. Therefore picocells have a limited window of opportunity."
Source: ABI Research.