Femtocells: analysing the business case

Operators' business cases for femtocells have three main components: the cost of deploying femtocells, the infrastructure cost savings due to the off-loading of macrocell traffic, and the additional revenues coming from new consumer offerings introduced with femtocells.

Strategies for building the femtocell business case may depend on the specific market and operator context, but overall we believe operators need to build a business case that is based on both infrastructure cost savings and new consumer offerings. It will be extremely challenging to seek a return on the femtocell investment from cost savings alone (without any new revenues) or from incremental end-user revenues (without any anticipated infrastructure cost savings).

This report primarily aims at helping vendors and operators understand the economics of femtocell deployments. Our main focus is to understand the cost impacts of rolling out femtocells and how various market parameters can influence the outcome of the business case.