Abstract
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.
Table of Contents
Key messages
Introduction
- Different business models for femtocells
- Components of the femtocell business case
- References
Component 1: femtocell costs
Component 2: macrocell network off-load cost savings
- Voice and data usage in the home
- Cost modelling
- Understanding the impact of service usage and 3G market conditions
- Understanding the impacts of deploying femtocells in suburban areas
- Understanding the impacts of targeting heavy users
- Understanding the impacts of promoting family offerings
Component 3: femtocell consumer propositions
- The starting point is voice
- Data services
Table of figures
- Figure 1: Overview of business model options for femtocells
- Figure 2: Contrasting femtocell business case scenarios
- Table 1: Summary of macrocell network assumptions
- Table 2: Macro-network parameters (macrocell network cost savings model)
- Figure 3: Annual macrocell network cost savings: different scenarios for network usage and 3G market conditions (per customer)
- Figure 4: Annual macrocell network cost savings for different scenarios of network usage and 3G market conditions (per femtocell)
- Table 3: Parameters for urban/suburban macrocell network cost savings model
- Figure 5: Comparison of annual macrocell network cost savings for urban and suburban environments
- Table 4: Parameters for usage level macrocell network cost savings model
- Figure 6: Macro-network cost savings for different service usage levels (per femtocell)
- Figure 7: Cost saving gains by targeting heavy users (% increase of macrocell network cost savings)
- Table 5: Femtocell family offering parameters
- Figure 8: Macro-network cost savings by average users (per femtocell)
