Fixed Mobile Convergence: The buzz is for the real

BANGALORE, INDIA: US cellular operators are headed toward a loss of $3.3 billion a year by 2011 due to Fixed Mobile Convergence (iLocus report on FMC)

Fixedmobile convergence, combined with VoIP, will allow corporate customers to reduce their voice spend by over 30% (Analysys Report FMC)

Fixed mobile convergence is poised to revolutionise the telecommunications market over the next five years. (Informa and telecom)

Fixed Mobile Convergence or FMC is the buzzword in the telecom Industry.  The excitement is reflected by the fact that FMC is currently being trailed by over 250 service providers worldwide.

FMC or Fixed Mobile Convergence essentially entails the convergence or confluence of fixed-line and mobile wireless technologies such that service providers can seamlessly blend two or more of these technologies to deliver enhanced user experience over a unified framework.

FMC is the convergence of fixed and mobile networks and using a single terminal that is capable of moving seamlessly across different types of environments (e.g., home, work, road, mobile).  The common use of these networks and above all, their services is Fixed Mobile Convergence

Analysts predict FMC market to be  $100 billion dollars in the near future

Why the sudden traction towards FMC

FMC is just not a mere convergence of fixed & mobile networks rather it is more comprehensive and intricate.

FMC has taken centre stage in the business strategies of fixed-line service providers. As fixed-line revenues continue to dwindle due to alarming dip in their subscribers base due to stiff competition from mobile operators and VOIP service providers eating into their cake. 

Amrish Kacker,  Head Wireless & Multimedia, Asia, Analysys Consulting, says , “FMC offers a lucrative option to not only curb fixed-mobile substitution (FMS), but also create profitable revenue streams. The advent of FMC services is expected to trigger a paradigm shift from a voice-centric model to a feature-rich content-based model.

Kacker adds FMC is also an opportunity for landline operators to diversify and grab cellular customers. “For operators operating on both landline/broadband and wireless, they can leverage existing subscribers for either of the two services and get them subscribed to other service”.

Ramdev Sharma, CTO, Huawei Telecommunications India , opines that as markets saturate and there is no more growth in mobile voice, companies look for greater customer ownership to support their overall business. Mobile-only operators see this as an opportunity for new revenues - fixed voice and potentially fixed broadband. Integrated fixed and mobile operators see this as a way to differentiate their broadband product and reduce churn on it.

“This in turn will help the mobile network operators in decongesting their mobile networks by offloading some traffic on the fixed networks. This will result in more efficient utilization of the spectrum resources (that is quite stretched today) for handling additional mobile calls (voice/data) and/or provide better network experience.” adds Sharma

Also very large proportion of mobile calls are made from 'fixed' locations. A service that offers lower cost calling from fixed location can help customers reduce their monthly spend.

Why did it take industry so much to wake to its potential?

So has industry suddenly woken to the fact that FMC can change the telecom industry overnight.

Jahangir Raina who has been tracking telecom market more than  15 years now says Fixed Mobile Convergence is not a new concept, but has been a FMC has been tried before as well.

“It is not new. Using IN (Intelligent Networking) architecture vendors like Alcatel and service providers like BT tried FMC in nineties. The subscriber could use a DECT based landline connected set while at home and use the same handset while in the cellular cloud.

And why did it fail

 “There were no tangible benefits and the technology was not sound. The billing aspect  specially was not ironed out properly and there was no value add apart from voice.

Sarah, analyst at Frost and Sullivan says that the evolution of access technologies such as DSL, UMA and GSM, along with the growing demand for enhanced user experience has created a strong business case for FMC services.

Jahangir Raina opines that VoIP changed things a little via WiFi.

“The present FMC is mostly about WiFi-Cellular convergence. So while if WiFi cloud your calls/sessions are routed via public Internet and while in cellular could they go over GSM/GPRS” says Jahangir adding  the difference is that the WiFi part is taken care of the VoIP technology which is now mature. So the underlying technology is now mature.

"Billing is not a problem. And you can continue value added sessions (like IM) seamlessly across WiFi and cellular zones”. adds  Jehangir.

FMC deployments happening around the world

Globally service providers have slowly stated waking to the concept of fixed mobile convergence

FMC deployments are already happening and there are operators in Western Europe, USA are doing field trails before they roll out commercially.

Countries like Korea are doing trials of Wireless Broadband (Wibro) which will enable convergence.

Chief Marketing Officer, South Asia, Alcatel-Lucent A. Sethuraman, says that for some service providers, the boundaries between fixed and mobile operations are blurring. “To a large extent, this comes from the search for new sources of revenue to compensate for revenue loss in their traditional market segment, and from end users (especially business users) looking for a unified solution for all their telecom needs: fixed, mobile voice (and video), and also data connectivity” says Sethuram.

“Today, combined operators (operators with both fixed and mobile assets) are operating their fixed and mobile operations as separate businesses. This is starting to change, as e.g. FT/Orange and AT&T/BellSouth/Cingular are looking to integrate organization and service offers, driven by the challenge of responding to end–user expectations and reducing costs”

BT started it Fusion which can be considered as one of the first really converged service offers. But given the assets and business configurations of combined operators, it is clear that it is only a matter of time before they will try to find innovative ways to tie their services together.

Mobile operators are focused on fixed substitution, whilst extending their service portfolio by introducing DSL (Orange/Cable & Wireless, Mobistar, Vodafone).

Azaire Networks which has been among the earliest venodros to jump the FMC bandwagon haqs has been working with many several operators in North America, Europe, and Asia, and includes T-Mobile, SingTel Optus, Rogers Wireless, Chunghwa Telecom, and Mobilkom Austria.

The company has been doing deployments with  T-Mobile (Germany) for first European wireless service to include uninterrupted service across 3G, GPRS/EDGE & WiFi networks

In China, Azaire has been working with . Chunghwa (Taiwan) for its 3G walled garden services (music, video) give data users complete service parity between 3G & WLAN with seamless integration into Chunghwa’s 3G packet core network.

Drawing an pattern to the global deployments Tom Hussey, CTO, Azaire Networks says the Residential FMC market has been very well served in Europe by the likes of Orange and T-Mobile from the mobile side, with FT and BT offering solutions on the fixed side.

It has been clear that success has come to those that understand user requirements, communicate the benefits and market the offering and retail aspects properly.  Enterprise success has not been widespread but some wireless operators have been able to market hosted Centrex only to the SMB space with some success. RIM has captured the large enterprise data market, while not offering PBX synergies nor relief from cellular roaming on the voice side. “