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June 23, 2010

Survey : Femtocell Technology Finds Appeal With the Masses

By Mini Swamy, TMCnet Contributor

Commissioned by the Femto Forum to conduct a custom consumer research in the U.S., Parks Associates (News - Alert), an internationally recognized market research and consulting company specializing in emerging consumer technology products and service, announced the results of the most comprehensive survey ever conducted.

The survey -'U.S. Consumer Attitudes on In-Home Mobile Services and Femtocells' (News - Alert), found that over 50 percent of U.S. broadband households with mobile phones were interested in the benefits of femtocells, which is expected to significantly improve subscriber satisfaction. As a result many households were found to be willing to consolidate with a single operator.
A very significant factor which surfaced was that households did not object to paying either for the device or for the femtocell service. This was in spite of the fact that not many of them were familiar with the new concept. 
However upon exposure to a description of the femtocell and its benefits, 56 percent of respondents found femtocells appealing, and at least two thirds found the technology 'extremely appealing'
89 percent of those respondents who were familiar with the femtocells found the technology 'appealing', indicating that interest would increase as awareness grew.
The primary driver for femtocell interest was improved in-home coverage. Important secondary drivers included increased mobile handset battery life, faster mobile broadband, advanced femtocell services and home-zone calling tariffs.
Results from the survey showed that 72 percent of consumers who found femtocells appealing were very interested in at least one advanced femtocell service, such as Virtual Home Number, which rings every cell phone in the home or family alerts warning when a subscriber leaves or returns home.
More than half of such respondents expressed willingness to pay $4.99/month for their single favorite service or $9.99/month for a bundle of their favorite three services, illustrating a new revenue opportunity for operators.
Although Wi-Fi is sometimes viewed as a femtocell alternative, the survey showed that 84 percent of people who heavily use Wi-Fi on their 3G devices found femtocells appealing. Improved voice coverage and battery life were the top drivers for femtocell demand among these Wi-Fi users.
Regarding the impact of femtocells on consumer satisfaction and loyalty, the study revealed that 44 percent of the consumers who were likely to consider a change of operators within the coming year, indicated a preference for the current operator, if offered a femtocell. Likewise 35 percent of consumers in multi-operator households preferred to consolidate their services around a single provider, if offered a femtocell.
Although over 90 percent of those who found the technology appealing expressed willingness to pay upfront for the device, the survery found that the demand was highest when the device costs were in the $20-$50 range, and lowest when the cost exceeded $300.About 45 percent were willing to buy the device when it was in the $50-$100 range.
"The clear message from this research is that femtocells have widespread appeal and consumers are willing to pay for them. There is a major opportunity for operators to gain new subscribers by taking over the contracts of whole families, and by better retaining their existing subscribers," Harry Wang, director of mobile product research, Parks Associates, said
Wang added that operators needed to build their business models on market share gains and new service revenues rather than on upfront device purchase revenues alone.
Simon Saunders (News - Alert), The Femto Forum's Chairman, summed up the situation rather neatly by the consumer was interested not only in the core benefit of improved indoor coverage, but were excited about the advanced services femtocell could offer.
As far as mobile operators were concerned, Saunders said that the survey indicated that femtocells provided an opportunity for them to improve customer satisfaction and increase brand loyalty, while providing new and enhanced services.
U.S. Consumer Attitudes on In-Home Mobile Services and Femtocells surveyed 1,100 mobile consumers in the U.S. over a 2-week span in May 2010. All respondents were 18 or over and had an equal or greater share in household decisions.
Parks Associates' research director John Barrett presented the results of the study at the Femtocells World Summit conference in London on 23 June at 2:10pm. A slidepack summarizing the results will be available on the Femto Forum (News - Alert) Web site after the event.

 Founded in 1986, Parks Associates creates research capital for companies ranging from Fortune 500 to small start-ups through market reports, primary studies, consumer research, custom research, workshops, executive conferences, and annual service subscriptions.

The Femto Forum has been set up to promote the wide-scale adoption of femtocells. It has over 120 members including over 55 operators representing 1.4 billion mobile subscribers,  27 percent of the global total. The Forum supports and drives the adoption of industry wide standards and common architectures to enable the widespread adoption & deployment of femtocells by operators around the world.

Mini Swamy is a contributing editor for TMCnet. To read more of her articles, please visit her columnist page.

Edited by Alice Straight

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