Fixed-mobile convergence was a particularly hot topic at 3GSM, and promises to make even more noise for the rest of the year. The underlying premise is that people will be able to make cheap calls from their home or office connections by using a Wi-Fi or Bluetooth link to a fixed-line Internet connection, but Tomi Ahonen has poked a big hole in that assertion, pointing out that in 23 of the 30 OECD countries, mobile calls are already cheaper than fixed-line calls.
It’s an astute observation, for certain, but to dismiss FMC simply because of this wouldn’t be wise. When talking about FMC or mobile VoIP, the impact of the technologies as a disruptive force may well overshadow their actual use. Mobile operators, as slow-moving as most of them are, don’t operate in a vacuum. They’ll respond to competitive threats, and won’t let new entrants simply waltz in and steal their markets (well, their close-minded approach might make that happen, but that’s another post). One example would be Germany, a pretty ruthless telecom market, where operators have found a great deal of interest in their home-zone calling plans, where users get discounted calls made from the cell that covers their home. These plans came as retaliation to cheap fixed calls and have served as a buffer against VoIP.
Two FMC announcements came out of CeBIT this week, one from German ISP/DSL provider Freenet and the other from Deutsche Telekom’s fixed-line unit, T-Com. There aren’t a lot of details yet, but what’s interesting is that both of these companies have corporate relations that are mobile operators — Freenet is owned by German mobile reseller Mobilecom, while T-Com is obviously related to T-Mobile — but the announcements came from the fixed-line units, showing how dual-mode devices can empower new entrants into the mobile market.
The other point to make about FMC is that it has non-price benefits as well. For instance, in the US, improving in-home coverage will be a strong selling point, while the ability to link with corporate IP PBX systems will help FMC enter the enterprise market. It’s these types of things, along with the increased competition it will bring that will make FMC a big deal, not just cost. There are plenty of existing VoIP solutions that offer dirt-cheap calls, for example, but haven’t yet unseated mobile phones. Price is but one element in the mix of how FMC can shake things up.
FMC is like running after the train that has left the station
Hi Carlo and fellow readers of Mobhappy
Thanks for the kind mention of my blog. I’d like to clarify it a bit. In my blog I made the point that calls on mobiles are already cheaper than calls in fixed wireline networks on most OECD countries and thus “price” or cost savings to the caller as the reason why wait until landline connection, is becoming a moot point.
But I also point out that there are many more mobile phone users than fixed lines, and that 25% of all internet access is via mobile. The whole trend worldwide is to mobile access to all communications. Much more money is already generated on mobile networks than on fixed networks.
Yes, there is a huge interest in FMC - Fixed-Mobile Convergence - but this is primarily from those players who are stuck with fixed assets, and are trying to catch up with the mobile world. Not unlike BT in the UK after it sold off O2. Today it is trying desperately to get back into mobile with the Fusion (formerly Bluephone) solution and its MVNO arrangements in the UK. FMC for fixed line telecoms is like running after the train that has left the station. Yes it is activity and yes it can even get you somewhere, but you will never catch the train.
In my blog I suggest that FMC is a distraction to mobile operators and really not worth their while. That FMC is really a desperation move by fixed line operators trying to catch onto the huge global mobile wave that has passed them by.
I should also point out that VoIP on mobile is not fixed-mobile convergence. It is a technology on mobile, and VoIP is inevitable. But just because the voice is packet-based (IP) voice rather than circuit-switched based (”traditional” cellular voice) makes it no more “fixed”. Yes, VoIP is an IP trend, but that is not fixed/mobile in any way. We can have IP on fixed as 75% of internet access is; and we can have IP on mobile as 25% of internet access already is (mostly obviously in Japan, China and Korea).
Thanks Carlo, and keep up the excellent work at this blogsite, always a must-read to me
Tomi Ahonen
IS FMC WORTH TRYING IN ENTERPRISE SECTOR FROM CONVENIENE & FLEXIBILITY ANGLE.
……….reddy.