Femtocells advancing slowly in Asia/Pacific region

SYDNEY – Sales of Femtocells, small cellular communications base stations, are only just starting to inch forward in the Asia-Pacific region.

The technology, whose origins date back to 2002, will generate revenue of nearly A$5 million (US$4.7 million) this year from device shipments in the Asia-Pacific region, according to a new study by ABI Research.

“While A$5 million is a relatively modest sum in global terms, it is important to remember that it is generated from a market that barely exists yet, and as such it represents quite satisfactory early growth,” wrote research director Stuart Carlaw.

Considered a last-mile technology, femtocells are designed to provide enhanced coverage at the edge of a wireless network. Promoted by the Femto Forum, work on them is more advanced in North America and Europe. For example, late last year Sprint Nextel began a test in two U.S. cities that work with any Sprint handset.

However, the slow adoption in Asia-Pacific may in part be due to regulatory complications. “Softbank [a Japanese wireless carrier] still needs to get regulatory approval before it can roll out a femtocell service commercially. Hence, its timeline for mid-2008 may slip,” said analyst Hwai Lin Khor.

The South Korean Government has yet to finalize its fixed-mobile convergence policy, and ABI Research believes commercial femtocell services will not be introduced in the country until 2009. Femtocell prospects in India and China are heavily dependent on those countries’ 3G licence developments.

“In-building wireless for enterprise markets in the Asia/Pacific region was approximately a $1.5 billion industry in 2007, with the majority of the earnings coming from distributed antenna system (DAS) deployments,” Lin Khor added.

Currently, most in-building wireless deployments in the region are of passive DAS and repeater-based solutions due to their lower cost. However, ABI Research expects more fiber optic-based active DAS deployments in the next five years, due to migration of customers to 3G technologies on 2100 Mhz spectrum and an increase in the number of buildings larger than 10,000 square meters.

Because there are different, and sometimes proprietary, ways of integrating femtocells into a network, in January the Femto Forum launched an initiative to help harmonize approaches with the goal of setting standards.

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