Slower adoption by mobile operators blamed

The mobile phone industry is plagued by a number of issues that are common between all major providers. One of the biggest of these issues is that fact that inside some homes and offices the mobile signal is not strong enough to provide a consistent call quality for mobile users.

The lack of a consistent signal inside the office or home means that users experience dropped calls and slower data speeds. The answer to this problem seemed to be femtocells. A femtocell is a small device that looks similar to a router for internet access that picks up the wireless call and sends it over the user's broadband network rather than the mobile phone network.

Femtocells were also looked at as a way for mobile network operators to improve speeds and reduce the overall load on their networks. The reality is that femtocells have been deployed in much lower numbers than was predicted by analysts and mobile providers.

ABI Research today issued a notice that it had reduced the expected number of femtocells that will ship this year by 55%. The research firm blames the reduction in its estimates on the fact that mobile operators have been slower to adopt the technology than expected. ABI now estimates that 350,000 femtocells will have been shipped by the end of the year.

ABI's Aditya Kaul said, "Even femtocell vendors are a bit surprised that the operators haven’t pushed femtocells as much or as soon as expected. We expect that deployments in 2010 will pick up but will be slower than expected – our data suggests about a 40% reduction on previous estimates."

As for why carriers are slow to adopt the technology the reason is unclear. ABI reports that some feel femtocells have yet to prove their worth. Others believe that the poor economy is contributing to the slow adoption. The economy is a good reason. Femtocells require users to pay more each month to provide better signal. A strong signal is something that many users expect their carrier to provide for the money they already pay each month.

Kaul said, "We still believe in this market’s potential. We anticipate that by 2014, shipments will only be about 10% lower than our previous estimates. The drivers are real, but it will take longer than anticipated. Next year will be critical: if conditions don’t improve by the end of 2010, some smaller vendors may find themselves in trouble."

ABI reported in March that femtocell deployment was slow due to the economy. At the time, the number of femtocells shipped was expected to climb to over a million units in 2010.

The launch of femtocells from Verizon was expected to happen in 2008, which never really materialized. Verizon then reported that it would launch femtocells in early 2009 along with handsets that would support Femtocells. Verizon is currently offering femtocells to its customers for an extra $10 to $20 per month added to the phone bill.

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