The Hindu Business Line : Best of both worlds

The ever-dynamic world of technology saw fixed-mobile convergence (FMC) move from industry theory to a closer certainty in 2006. The dream of using one telephone with one number, whether at home, at work or on the street, and of networks smart enough to hand over a call in progress is now almost a reality. In fact, doing away with multiple wires in one’s home is close to reality with one operator catering to Mobile, Fixed Phone and TV service.

With the onset of FMC, the union of wireless and wireline services, wireline service providers are no longer strictly confined to landline networks. Instead, they compete and partner with the wireless providers, moving towards the day when that distinction between what is considered wireless and what is wireline will become meaningless.

As is the case with any product or service, FMC is also driven by the forces of demand and supply. At one time, services such as voicemail, call forwarding, etc, common for wireline, were considered advanced features by mobile users. With mobile service providers concentrating on increasing the value of their networks via next-generation services, mobile subscribers have become accustomed to having these services at their fingertips, while also enjoying the flexibility of mobile telephony, the result being that more and more users are bidding adieu to the world of landline. This could spell disaster for the traditional telephony providers who are yet to participate in the technological revolution.

However, with FMC, wireline service providers may no longer be restricted to the landline networks, and wireless network operators will be able to use the most robust network resources available, to meet the growing demand from mobile subscribers.

The ‘converged operator’

With every new technology comes the key question: who will be the first mover in adopting this new technology — wireline or wireless carriers?

The answer lies in collaboration between the wireline and wireless service providers or the advent of the “Converged Operator”.

Wireline carriers serving enterprise customers are likely to be one of the early adopters in a bid to reverse their loss of voice-service minutes and revenue to cellular providers. Additional revenue would also be generated by the delivery of high-end multimedia services such as IPTV through the use of the same network. According to an Instat report, in 2004, more than 14.4 per cent of total wireline usage was lost to cellular, and the trend is continuing. If this goes on, in the worst-case scenario, wireline carriers could risk losing their customer base entirely, becoming nothing more than wholesalers of high-bandwidth pipes to wireless carriers and businesses.

Mobile operators are also keen to adopt FMC as it lets them expand services into the landline space while maintaining control of the call.

The wireline operators, on the other hand, use this to deliver the call via their networks thus, lowering the cost of delivery and optimising the usage of spectrum. Another advantage of FMC would be the delivery of multimedia services such as IPTV via the wireline networks to low coverage areas where voice delivery already exists.

The result is a win-win situation for both types of operators.

The demand for Fixed Mobile Convergence will also stem from enterprises wanting to control costs and users looking for more convenient, more user-friendly and higher quality services. In fact, looking at the above, one can easily predict the emergence of one-stop-shops for both purchase and support too.

Coming to the end users of the technology, today’s users are an empowered lot, having greater control over who will emerge as the leading provider. They will demand flexibility of location, premium content without any latency or performance issues and they will require personalisation.

For instance, services such as ‘personal ring-back’ are rapidly gaining popularity among subscribers of the world’s forward-thinking service providers. A personalised ring-back service can take the form of an advertisement whereby a department notifies a subscriber of a sale while a location-based service may include a restaurant — located in the city where the subscriber happens to be at the time — sending a menu and/or video clip of the dining room to a mobile handset. All in all, leading to an environment where wireline and wireless providers join hands to leverage their strengths and keep customer churn to a minimum.

Applications vs Networks

The world of telecom is moving from a network-centric view of capabilities to a subscriber-centric view of demands. In the past, subscribers’ choices were limited, based on what the network was designed to do. Now, the subscriber is king, demanding more content and services, forcing a new network designed to support myriad capabilities and content. The type of services being delivered is not the traditional network-centric single services (call forwarding) but subscriber-centric offerings (e.g., presence & buddy lists w/conferencing and messaging). Few would have predicted that SMS and ringtones would prove to be the cash cows that they are today.

The price disparity does, however, offer convergence opportunities for fixed-line operators to develop products that mirror some of these features. The recent rise in broadband adoption has also created a demand for convergence in the opposite direction. Users now want to see the new services they receive at home or office to be replicated on the move, with devices such as smartphones, which allow mobile access to e-mail, address book and calendar. Additionally, presence information is becoming a key to deliver newer types of services such as Multimedia conferencing, IPTV, Push to Video, etc.

Gaming services too enthrall and captivate subscribers because of the nature of a highly interactive, personal and media-rich experience. The ability to inject tones, sounds, voice and both Web and media content into riveting peer-versus-peer prepaid gaming services will engage subscribers by offering a rich and dynamic service experience. Here, subscribers can identify other available subscribers via presence and engage them in an online game, simultaneously talking to each other while playing.

Adding to the pressure

The emergence of Fixed Mobile Convergence has put more pressure on the already highly competitive and saturated telecom market. On the one hand, the telecom space is witnessing the emergence of newer technologies while on the other it is bogged down by the challenges facing policy makers and regulators. While one cannot influence the technological development in this fast-paced industry, it is imperative that regulatory uncertainties are removed for existing players and potential entrants, to make informed investment decisions in the area of Fixed Mobile Convergence.

The author is Vice-President, Wireless & Convergence, Strategic Business Unit, Aricent.

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