Femtocells (News - Alert) increasingly are getting attention as a fundamental physical layer underpinning for fixed-mobile convergence in the consumer and small business space, along with providing capital investment and backhaul charges. At the same time, femtocells might create a new revenue opportunity for mobile providers, who might add fixed broadband services. Integrated providers with both fixed and mobile broadband assets can use femtocells to create a new category of broadband services that obliterates the difference between “fixed” and “mobile” broadband access.

 

Just as important, femtocells might prove a valuable physical layer instrument for creating a new partner revenue stream for mobility providers. Where today all revenue comes from retail end users or wholesale services sold to other mobile or service providers, in the future it is at least conceivable that FMC enabled by femtocells could create a new revenue stream from application providers who benefit from enhanced signal coverage, quality and bandwidth.

 

“We expect the FMC in-building market sector to become strategically important to mobile operators as they adopt new business models based on revenue share with Web and media partners instead of per-megabyte data pricing,” says Catharine Trebnick (News - Alert), America’s Growth Capital analyst. That especially would be the case if mobile TV and other bandwidth-hungry data services become commercially successful.

 

Femtocells would allow operators to deliver low-revenue or low-margin broadband applications more affordably if operators can offload video traffic, for example, onto the wired network. Femtocells help in two ways. Removing indoor data sessions from the macro network reduces the number of users each macro cell needs to support. Second, if indoor users are served by femtocells instead of from the macro cell, the capacity of the macro network increases in proportion to the number of users who have been removed from the cell. Both advantages reduce capital investment.