Fifty-six percent of U.S. cell phone subscribers that have broadband connections at home found the idea of femtocells “appealing,” far outweighing the 21% who were “neutral” to “negative,” according to femtocell market research conducted by Parks Associates for the U.K.-based Femto Forum. Unfortunately for femtocell advocates, only 10% of survey respondents were familiar with femtocells. Parks’ U.S. research findings, part of a planned multinational study, indicate that in addition to potentially lowering operator costs and providing better indoor coverage, femtocells offer cellular service providers an opportunity to gain additional advanced service-based revenue streams and reduce customer churn.
“Evidently femtocells meet a clear market demand and that is not simply about improving indoor coverage,” Femto Forum chairman Simon Saunders commented. “This research demonstrates that consumers are also excited about advanced femtocell services. This opens up new vistas for operators as they assess how best to monetize the new technology. We’ve known for some time that femtocells can help alleviate growing operator costs but evidently they can also supply new revenues in interesting and unexpected ways.”
Service providers need to come up with revenue and business models that go beyond just selling the devices if they expect to cash in on the opportunity, however, cautions Parks Associates’ director of mobile product research Harry Wang. “The clear message from this whitepaper is that consumers want femtocells and operators have every reason to provide them. Consumers receive great indoor coverage and new services while operators can increase revenues and reduce churn. That said, for operators to be really successful they need to build business models based on market share gains and new service revenues, not simply charging for the device.”
Improved in-home coverage garnered the most appeal from survey respondents. Secondary benefits included better handset battery life, faster mobile broadband, advanced femtocell services and home-zone calling tariffs, according to the research report, entitled U.S. Consumer Attitudes on In-Home Mobile Services and Femtocells.
Seventy-two percent of those who found femtocells appealing “were very interested in at least one advanced femtocell service, such as a Virtual Home Number, which rings every cell phone in the home.” Half of this group said they would be willing to pay $4.99/month for their favorite service or $9.99/mo. for a bundle of three.
Femtocells also hold out the promise of reducing customer churn, according to Parks’s findings. Forty-four percent of respondents who said they were likely to switch providers over the next 12 months would reconsider if offered a femtocell. Thirty-five percent living in a multi-service provider household said they “would likely consolidate their services around a single provider who offered a femtocell,” according to the Parks report.