Telecoms operators are pushing to get the cost of a 3G femtocell in the home down to €40 – well below the current $99 (€63) target.

"For the femtocell to be economically viable compared with the macrocells, it has to be less than €40 in the total cost of ownership per access point," said Thierry Berthouloux, head of network evolution at French mobile phone operator SFR, speaking at the European Femtocell conference.

"It is not €100, that is far to expensive, and that is really the challenge," said Berthouloux.

The company is in the process of acquiring broadband operator Neuf Cegetel, so that it can use the broadband link to a femtocell in the home. At the same time, a standard for femtocells is expected by the end of the year to drive up volume and drive down costs.

"This is a challenging target," said Malcolm Latham, marketing manager at Motorola, which makes network equipment and femtocells.

Will Franks, founder and chief technology officer of Swindon-based femtocell maker Ubiquisys, said, "It is essentially down to the chip suppliers. We will get there in time, but who knows how long or what price that will get to as the market matures."

Chris Cox, marketing manager at Cambridge-based femtocell maker ip.access, said, "Integrating the RF makes quite a difference to the cost and there is a lot of work going on that, but there are other ways to reduce the cost. For example, we do not use a SIM card, and that saves cost."

Radioframe, which supplies 2G and 3G femtocells based on its own silicon, is integrating the radio into the baseband to bring cost down even further.

"3G femtocells will be in volume because of the standard," said Mark Keenan, general manager of Radioframe in Europe. " We couldn’t get our bill of materials without our silicon, but the radio is the least of the worries to make a system work, and we will have our femto product at the end of this year. We have not integrated the RF into the second generation processor, but that is what we are looking at for the next generation."

Peter Claydon, founder and chief operating officer of picoChip, which supplies ip.access and Ubiquisys, said, "What they are talking about isn’t a complete box but integrating into a DSL modem."

PicoChip has launched a processor to integrate more the functions of a femtocell and bring down the system cost.

"That €40 is possible and for a femtocell box it will be substantially under $99 in mid-2009 for volume production. We don’t need to integrate the RF to reach that cost," said Claydon.