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Femtocell - The Emerging Wave

Zacks Equity Research

Femtocell is rapidly emerging as a fundamental technology enabler in the deployment of next generation (3G/4G) wireless network infrastructure. Femtocell - is a small cellular base station, typically designed to be used in a residential or small business environment. This access point communicates to the wireless service providers’ network through a broadband connection.

Using femtocell, a wireless operator can improve both coverage and capacity especially in an indoor area, where access would otherwise be limited or unavailable, in a highly cost effective way. This will reduce the carriers operating costs as well as capital expenditures.

According to a recent report in Light Reading, five major global wireless operators are on the verge to install femtocell extensively for their next generation 4G LTE networks. These wireless operators are AT&T Inc. (T), NTT DoCoMo (DCM), Sprint Nextel Corp. (S), Vodafone Group plc. (VOD) and Telef S.A. (TEF).

AT& T became the first U.S. wireless service provider to deploy 3G femtocell base station beating its nearest rival Sprint Nextel. The company developed its 3G femtocell using Cisco System Inc.’s (CSCO) technical expertise. This base station radio is 3G-handset compatible, fully secured, and supports enhanced indoor coverage up to four voice or data users at once and also support seamless call handover.

In 2013, AT&T will extensively deploy femtocells for its 3G HSPA+ networks. 4G LTE femtocells will be deployed in 2014. Management has decided to install 40,000 femtocells by the end of 2015. On the other hand, Sprint Nextel is providing 2G CDMA femtocell since 2007 and so far the company has installed more than 1 million CDMA femtocells. Sprint Nextel will deploy 4G LTE femtocells more extensively in late 2013 and 2014.

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