LONDON — The emerging home basestation, or femtocell market represents a semiconductor opportunity that could show a compound growth rate of 138 percent over the next four years and reach $1.5 billion by 2012, according to market research group Forward Concepts.

Forward Concepts (Tempe AZ) says cellular operators are very enthusiastic, due to the lower CAPEX and operational advantages of femtocells. They see a significant "pull" as compared to the typical technology "push" from product vendors.

The market researchers suggest global femtocell equipment revenues will grow at a CAGR of 126 percent from 2008 to $4.9 billion in 2012. Western Europe will be the largest market, driving 32 percent of the revenue, followed by North America with a 22 percent share. They add femtocell integrated home gateway shipments are projected to exceed 23 million units in 2012, passing stand-alone femtocells for over half of the market.

Forward Concepts estimates femtocells will capture the dominant Fixed Mobile Convergence (FMC) market share by 2010, as UMA is deemed to be a transitional technology and cellular carriers will ultimately transition to IMS-enabled femtocells. However, they caution the most significant technical challenge for femtocell operators will be RF interference which will require proper frequency planning by the operators.

According to Satish Menon, who has just authored a report on the topic for Forward Concepts:"Cellular subscribers will benefit through cheaper and more reliable calls through their local broadband connections when indoors. Cellular operators will benefit as femtocells will quickly evolve to have advanced management capabilities with support for features such as remote diagnostics, configuration, and management updates."