November 04, 2010, 1:15 PM — Interest in femtocells is growing rapidly as mobile operators looks for ways to handle increasing data traffic, according to Alcatel-Lucent's CEO Ben Verwaayen.
The growing interest can be seen in the number of contracts the company has signed, Verwaayen said during a conference call on Alcatel-Lucent's third quarter results. Of a total 14 operator contracts the provider has signed, 12 have been secured in the last three months. The company is also involved in a number of trials, he said.
The rising popularity of femtocells is due to a combination of increased smartphone use and an underlying technology that has matured, according to Jean-Pierre Lartigue, vice president of wireless marketing at Alcatel-Lucent.
Simon Saunders, chairman of the Femto Forum, agrees: "the emergence of standards has also helped increase operator confidence," he said.
Femtocells are small base stations that can improve voice quality and increase mobile broadband capacity, at home, in the office and in public areas, according to Alcatel-Lucent. When a user is making calls and surfing the Web with a smartphone or laptop equipped with wireless broadband, signals are sent via the femtocell and a fixed broadband connection.
So far, mobile operators have mainly rolled out femtocells in homes, but are now setting their sites on the enterprise, as well, according to Lartigue. Of the 12 new contracts, four customers are planning enterprise offerings, Lartigue said.
For carriers, they also provide a chance to offload users and data from the regular mobile network, and in the process save money. Delivering data over femtocells is a hundred times cheaper than sending it over the regular mobile network, according to Verwaayen.
Alcatel-Lucent isn't the only vendor that wants a piece of the femtocell pie. At the end of October, chip maker Broadcom acquired Percello in a effort to get into the sector, it said. Competing chip makers Qualcomm, Texas Instruments and FreeScale have already entered the market.
Increased interest from chip vendors will help bring down the cost of femtocells, according to Saunders. Already, costs have come down to a level where operator can offer femtocells for free, he said.
Over the past quarter the total number of operator femtocell deployments globally has increased to 17, market research company Informa Telecoms & Media recently said. By 2014, 114 million mobile users will be accessing mobile networks through femtocells during that year, Informa said.
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