While it's still early days for commercial 3G femtocell rollouts, NEC Corp. (Tokyo: 6701) has already started work on developing a residential femtocell for next-generation Long Term Evolution (LTE). (See Who Does What: Femtocell Services.)

The move marks a shift in the vendor's femtocell strategy, which has relied on using femto access points and network elements from partners -- such as Airvana Inc. , Kineto Wireless Inc. , and Ubiquisys Ltd.

Now for LTE, NEC wants its own home base stations.

"For 3G, we've gone to market with a partner; for LTE, things are different," says Shahram Niri, director of global LTE/SAE strategy and solutions at NEC Europe. "NEC plans to go out with our own product."

NEC is mulling a number of options for in-house LTE development. Those options include using its own chipset, buying third-party chipsets and adding its own software, or partnering with chipset or femto software vendors to develop its own product.

The vendor is in discussions with femto silicon suppliers about its LTE plans, according to Niri.

Another option at the other end of the product development spectrum is that NEC could simply acquire another femto access point or silicon vendor, but Niri says this is "unlikely."

The new strategy for LTE does not mean that NEC will dump its current femto partners, Airvana and Ubiquisys. Niri explains that NEC will support its partners' next-gen products for existing customers.

Covering the LTE femto bases
For LTE, there are broadly two flavors of femtocells: the metro femto, or small cell, for outdoor hotspot deployments; and the residential femtocell, which is similar in form to today's 3G femtos. NEC plans to have platforms for both small cells and residential femtocells. The company, in fact, unveiled its LTE small cell at the Mobile World Congress in Barcelona in February this year. (See Operators Eye LTE Metro Femtos, Vodafone Dreams of Metro Femto, Backhaul Clouds Metro Femto Vision, MWC Preview: Femtos Go Macro, MWC 2010 Photos: NEC Booth Tour, AirWalk Preps LTE Picocell Proto for CTIA, and picoChip Showcases LTE Femtocell Silicon.)

NEC believes its early experience with LTE, as well as its self-organizing network (SON) capabilities, will help it to develop its own next-gen femto product. The vendor is one of NTT DoCoMo Inc. (NYSE: DCM)'s LTE equipment suppliers and is involved in LTE trials with Singapore Telecommunications Ltd. (SingTel) (OTC: SGTJY) and Telefónica SA (NYSE: TEF). (See Globe Checks Out LTE With NEC, NEC Supplies More LTE to DoCoMo, Telefonica Lab Tests NEC LTE, NEC Joins LTE Interop Tests, and NEC Ships LTE Equipment to DoCoMo.)

NEC is not likely to be alone in its preparations for LTE femtos, and the market opportunity is longer term, according to Peter Jarich, research director at Current Analysis .

"I think LTE is firmly part of the roadmap for most femto vendors -- with metro femtos prioritized over residential," says Jarich. "I don't, however, think it's a near-term item. "

NEC's target availability of an LTE home base station for friendly user trials is the end of 2011, while its commercial product is expected in 2012.

As the LTE femto market begins to takes shape, NEC has had some success with its 3G femto solution, which is commercially deployed at SoftBank Corp. and SFR . (See NEC, Ubiquisys Win Softbank Femto Deal, NEC Helps SFR Femto Rollout, and France Fires Up Femtocells.)

— Michelle Donegan, European Editor, Light Reading Mobile