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Enterprises to dominate femtocell market

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Enterprises are set to dominate the femtocell market, accounting for 97 percent of a sector worth €3.1 billion by 2019, according to new research.

ABI Research's latest report said enterprises will increasingly become convinced of the benefits of femtocells, compared to Distributed Antenna Systems. The market is currently skewed towards 3G cells, although there is greater demand for 3G/4G devices especially in North America and Asia-Pacific. 

It said Cisco, Alcatel-Lucent and Broadcom were leading the market with multimode femtocells. North America will be the largest market for femtocells thanks to leaps in demand for LTE and small cells, according to the research firm.

Ahmed Ali, Research Analyst at ABI Research, said: "The femtocell business model becomes clear for small and medium enterprises. The cost of a Distributed Antenna System cannot be justified for these firms, but yet there is an increasing demand for voice services."

Ali added value added services would be key, particularly location-based analytics. He said: "Although enterprise femtocells cost more and deploy in larger numbers, in the long term, device prices are bound to come down. Operators will look for additional customized services to maintain margins."

The report could be encouraging to small cell vendors who have seen a slow start to the market in Western Europe. Late last year, Infonetics downgraded its predictions for small cell growth, saying it would only growth by a CAGR of 48 percent, compared to its prediction of 73 percent in 2012.  

The researchers said rollouts of macro cells and small cells had too little in common to drive the latter market.