The Hindu Business Line : Hear the `convergence' beat?

How about a two-in-one phone - one that offers you the voice clarity of a fixed phone and the mobility of a mobile? The `fixed-mobile' marriage experiment is resurfacing...

IN recent times, both Bharat Sanchar Nigam (BSNL) and Mahanagar Telephone Nigam (MTNL), the PSU players, have been losing their share of fixed-line subscriber additions to the more nimble-footed fixed-line peers in the private sector.

Or, for that matter, some fixed-line subscribers have disconnected the cord altogether and gone mobile.

Almost as a vindication of this trend, recently, the mobile subscriber base overtook the fixed line base, the feat accomplished in less than 10 years.

If it is of any consolation to the Indian majors, a similar trend of erosion in fixed-line subscriber base has been seen across the telecom sector in the developed and developing world.

So, what's new, you may ask. After all, this has been a classic conundrum facing the fixed-line community for the past couple of years. Is it time to put on the out-of-the-box thinking cap to revive the flagging fortunes of the fixed line sector?

No, not really. Ideas about possible solutions have been debated in the past. Some of that are being dusted and brought back into shape.

Yes, we are talking about the much hyped, `fixed-mobile convergence' idea, which had made waves in the International Telecommunication Union show - Telecom 99 + Interactive 99 at Geneva five years ago.

Since the brutal technology slowdown in late 2000, the whole idea was given a quiet burial. However, over the past six months, the concept is staging a comeback.

What is so special....

The concept of fixed-mobile convergence is simple. It essentially means having a single phone that seamlessly caters to both fixed line and mobile requirements. It is truly a `marriage of convenience' that combines the attributes of clear voice services of a fixed-line phone with the true mobility offered by a mobile phone.

Apart from this, the benefits of having a single phone are straightforward: one common phone number, one common bill for fixed line/mobile phone use, common value-added services such as text messaging, call forwarding or caller ID across both services, common Internet access, anytime and anywhere, using plug-in and surf devices, and common customer care services.

Intuitively, this concept is so appealing that the telecom sector has been working towards this goal for over a decade. The biggest impediment, however, to the evolution of true converged services so far has been `technology' and `a common standard'. And these barriers are beginning to be addressed one by one.

In 2003, the UK-based British Telecom announced a grand experiment on fixed-mobile convergence called Project Bluephone. And in June this year, BT also announced the launch of a `Fixed Mobile Convergence Alliance' to promote a one-phone service, which already has drawn about half a dozen members from across the globe so far.

.......about Project Bluephone and FMC Alliance

Project Bluephone, promoted by BT, is actually a one-phone convergence network being developed by a seven-member consortium for BT. The seven companies involved in this project are Alcatel, Motorola, Ericsson, Norwood Systems, Inventel, IVL and MBT.

The network, as structured by this consortium, uses a Bluetooth (the other option being Wi-Fi or wireless fidelity) wireless access point to connect to a fixed line network. As long as one is at home or in office, the calls are considered as fixed line calls. Once the users move out of the Bluetooth coverage range, the calls are handed over seamlessly to Vodafone's GSM or 3G network, with whom BT has entered into an agreement for this service. Still in the trial stages, Project Bluephone is slated for launch maybe in the later part of 2005.

To encourage the development of this project, BT has decided to use an `Unlicensed Mobile Access' (UML) standard developed by leading telecom players such Nokia, Nortel, Siemens, Alcatel, Motorala and Ericsson. UML, which is similar to GSM or 3G, is likely to become a new worldwide open standard for fixed mobile convergence, if the BT project succeeds.

By kicking off the UML initiative at an early stage, BT expects to help different manufacturers to quickly interoperate their network equipment and infrastructure and also provide a wide range of handsets/devices for consumers.

Besides this, to spread the idea, six telecom operators spearheaded by BT launched a Fixed-Mobile Convergence Alliance from different parts of the globe. The founding members include BT, Brasil Telecom, NTT of Japan, Swisscom and Rogers Wireless, Canada.

The crucial triggers for the success of Bluephone will be:

Consumer acceptance: While surveys done in the UK have projected growing interest for the Bluephone, the reality may turn out to be vastly different. While first-time users may straightaway opt for the Bluephone, making the existing fixed line and mobile phone users who already possess separate handsets to switch to a single handset can prove to be a tricky proposition.

Even if this fails to take off for any reason, the focus on enterprises can become the USP of Bluephone.

A simple, but popular application of Bluephone will be to reach employees who are away from the desk, but still in the office. Instead of one trying to reach them on the mobile phone, their having a single phone will help one to reach them anywhere.

With the right incentives in terms of tariffs, this can turn out to be a popular application for this concept, at least to start with.

Tariffs/Cost: Very little is known about the tariff structure that Bluephone is likely to adopt for the marketplace. Since the network infrastructure will help BT to carry and share voice calls across a common network, voice calls are bound to get cheaper than in the past.

Since this concept is likely to coincide with the sharp pick-up in the 3G (third-generation) mobile phones across Europe, the strategy for data services will be closely watched by consumers.

If this BT experiment succeeds, several benefits are likely to flow, such as:

An option to integrated (fixed-cum-mobile) operators: For integrated operators across the globe, especially the telecom incumbents say, Deutsche Telecom in Germany or France Telecom in France, NTT of Japan or even BSNL or MTNL in India, this may turn out to be the winning formula that can combine the best of both worlds — of fixed and mobile.

Incentive for standalone or greenfield operators: Since fixed-mobile convergence offers good scope for differentiation in a competitive market, standalone operators will be in a position to step in and capitalise on the value added by this service. Even the licence fees may not be a big deterrent, if the penetration by Bluephone turns out to be fairly large.

In a sense, this whole idea of fixed-mobile convergence has definitely moved away from being a mere pie in the sky. But there are several glitches to be ironed out, both on the technical and commercial side, before this experiment can turn out to be successful. Till then, we can only track the developments and keep our fingers crossed.

maverick@thehindu.co.in

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