A report by communications advisors Analysys, entitled Picocells and Femtocells: will indoor base stations transform the telecoms industry?, points to 3G indoor base stations as a key technology for driving fixed mobile substitution (FMS).

Report co-author and Analysis Associate Mark Heath predicts that FMS services based on indoor base stations will be more popular with enterprises than some of the unlicensed mobile access (UMA)-based or other dual-mode (cellular/wireless LAN) services that are currently being developed. The reason will be because " mobile users will be able to use their existing mobile handsets rather than new dedicated handsets".

"There are already 2G products out there in the market, and [interest] will be stimulated further [in the 2G market] with the commencement of services from organisations that have secured low-power GSM licences recently in the UK," Heath explained.

Another report co-author, Alastair Brydon, said that the rapidly emerging indoor base station concept using femtocells had the potential to transform the telecoms industry. "The trend towards fixed–mobile substitution is increasing in many countries, and 3G networks are at a relatively early stage in their development. In this context, 3G femtocells could not have arrived at a better time for the mobile industry," he explained.

“The potential of femtocells is substantial for mobile operators, but critical implementation and performance issues need to be resolved before they can be deployed widely,” added Heath.