Femtocells in the Consumer Market: business case and marketing plan

• 0 Summary
• 1. Interest in femtocells is growing, and business cases and service propositions must be prepared
  • 1.1 MNOs are investigating commercial deployment of femtocells
  • 1.2 Key questions remain over the success of femtocells
• 2. Operators and equipment vendors must keep a clear commercial focus on femtocells
  • 2.1 MNOs are preparing to launch consumer femtocell propositions in 2008
  • 2.2 Operators and vendors must build the case for commercial roll-out using realistic costs
  • 2.3 A business case framework helps MNOs to formulate and execute an effective femtocell strategy
  • 2.4 MNOs should develop compelling service propositions for key market segments
  • 2.5 MNOs should examine alternatives to femtocells
• 3. For voice services alone, the business case for femtocells is uncertain
  • 3.1 MNOs and femtocell vendors have focused first on voice telephony
  • 3.2 Increasing affordability of traditional mobile will reduce the appeal of femtocells
  • 3.3 Consumer inertia, mixed marketing messages and possible health concerns may dampen demand
  • 3.4 Voice is not network intensive, limiting 3G network cost savings
• 4. Mobile TV, video and audio make the business case for femtocells
  • 4.1 Femtocells could be highly effective for mass-market mobile TV, video and audio services indoors
  • 4.2 Much mobile TV and video usage will be indoors, where femtocells perform well
  • 4.3 Femtocells bring similar benefits for the delivery of radio and audio in the home
  • 4.4 Femtocells are essential to the profitable delivery of affordable video and audio services in the home
  • 4.5 Femtocells could enable big savings on 3G macrocell network costs
  • 4.6 Femtocells could allow operators to deploy less dense broadcasting networks
  • 4.7 Mobile video and audio improve the business case for femtocells
• 5. Broadband access and location-aware services add to the case for femtocells
  • 5.1 Femtocells could enable MNOs to offer compelling and profitable mobile broadband services
  • 5.2 Femtocells could enable new location-aware services
• 6. Femtocells are preferable to the alternatives, and MNOs should start developing propositions
  • 6.1 Alternatives to femtocells are less attractive when a broad service mix is required
  • 6.2 MNOs should start to develop compelling propositions based on femtocells
  • 6.3 MNOs should include a video and audio portfolio prior to femtocell launch

Actions

• Vodafone
• BT
• France Telecom
• ip.access
• Tatara Systems
• Sprint
• O2.

• Figure 0.1: Major revenue and cost elements of an MNO' s business case for femtocells
• Figure 2.1: Major revenue and cost elements of an MNO' s business case for femtocells
• Figure 3.1: Increase in the proportion of mobile-originated voice traffic in Western Europe as the mobile price premium has decreased, 1Q 2004 to 4Q 2006
• Figure 3.2: Increase in the proportion of mobile-originated voice traffic in Finland with lower average spend per mobile minute, 1Q 2004 to 4Q 2006
• Figure 3.3: Mobile-originated voice traffic compared to mobile price premium in various Western European countries, 4Q 2006
• Table 3.1: Comparison of network capacity consumption by a range of services
• Table 3.2: Summary of the business case for deployment of femtocells to support voice services in a variety of scenarios
• Figure 3.4: MNO' s costs associated with femtocell deployment for four voice telephony scenarios
• Figure 3.5: MNO' s revenue gains associated with femtocell deployment for four voice telephony scenarios
• Table 4.1: Estimated indoor usage of mobile TV services based on DVB-H trials
• Table 4.2: Estimated indoor usage of mobile radio services based on UK DAB-IP trials
• Table 4.3: Estimated revenue per megabyte from indoor service use, taking into account variable network cost
• Table 4.4: Amount of data diverted from a 3G macrocell network by femtocell use: an example usage profile
• Table 4.5: Summary of the business case for deployment of femtocells to support voice, video and audio services in a variety of scenarios
• Figure 4.1: MNO' s costs associated with femtocell deployment for four voice and non-voice scenarios
• Figure 4.2: MNO' s revenue gains and cost savings associated with femtocell deployment for four voice and non-voice scenarios
• Table 5.1: Examples of mobile broadband services currently offered by MNOs
• Table 6.1: Examples of femtocell service propositions to appeal to different market segments