Qualcomm's British Investment Underscores Europe's Femtocell Strength

Posted by: Jennifer L. Schenker on May 21

IP.Access, a startup in Cambridge, England, added yet another prestigious investor on May 21: U.S. chipmaker Qualcomm. The company makes femtocells, in-home wireless access points that solve the problem of unreliable household mobile coverage. Femtocells look like a typical modem or router and operate as a low-power base station in the home, boosting indoor 3G coverage while connecting to wired broadband services such as cable or DSL. The technology holds enough potential that a phalanx of tech companies are dedicating serious resources to femtocell development.

Investors in IP.access already include network gear-maker Cisco Systems, Intel Capital, and Motorola Ventures. In July, search giant Google joined a group of investors that parked $20 million in Britain-based femtocell startup Ubiquisys, which is currently trialing femtocells with British carrier O2. Femtocells enable mobile operators to strike back against the threat to their business from fixed-line competitors who are offering voice-over-WiFi calls at home via dual-mode handsets.

Privately-funded European start-ups like IP.access and Ubiquisys are competing against Nokia Siemens Networks and Alcatel-Lucent to grab their share of a market that research firm ABI Research estimates will be worth at least $2 billion by 2011. It seems Europe is well placed to extend its dominance in the mobile networking gear space to this burgeoning new opportunity.