Fixed-mobile convergence (FMC) has set in motion profound changes in the telecom industry. From dual-mode handsets to IMS infrastructure, FMC is rippling through the industry from subscribers, through equipment vendors, and into the service providers themselves.
Just a few years ago, subscriber ownership was clear. A mobile user making calls over the mobile network generated revenues for the mobile operator, while subscribers making calls on the fixed-line network generated revenues for the fixed operator. Currently, however, with the rapid maturing of disruptive technologies such as broadband, VoIP, WiFi, and dual-mode handsets, these scenarios no longer hold true. For example, mobile subscribers will soon be able to make mobile calls over fixed networks as well as fixed calls from mobile devices. As a result, a major new battle in the telecom industry is rapidly taking shape--the battle for the building-that will determine which operators will ultimately own voice services within homes, offices, and other indoor/fixed locations.
Today, four primary forces have collided to construct this new battleground. First is the rise of broadband, which has achieved significant penetration in major markets. Broadband now offers any service provider an independent, cost-effective means to deliver compelling new IP-based services to consumers independent of the broadband access provider.
The rise of broadband leads to the second force, which is a dramatic increase in VoIP competition for fixed-line minutes of use. As we have all witnessed, new low-cost, feature-rich consumer VoIP services such as AT&T's Call Vantage, Vonage, and Skype are hastening the decline of traditional fixed-line revenues.
Next is the rise of WiFi and local-area mobility. When combined with broadband and VoIP, WiFi begins to present a real threat to mobile operators. With wireless VoIP (wVoIP), new VoIP providers can now mobilize their services and begin to directly attack the mobile operators' mainstream voice business.
Last, and at the heart of the battle for the building, are new dual-mode cellular/WiFi handsets. With these devices, subscribers will have the ability to receive services over both cellular networks as well as fixed broadband networks. When all is said and done, the battle for the building is really over the following key issue: When a dual-mode handset is connected to the fixed broadband network via WiFi, should the voice service belong to the fixed operator or the mobile operator?
A case can be made for both sides. In one camp are the fixed-line operators that have traditionally owned in-building voice revenues. The use of the fixed-line broadband network to transport calls certainly highlights the advantages of their network for service delivery. Based on escalating losses in their fixed-line voice revenues, we should expect to see fixed operators aggressively pursue ownership of services delivered to mobile devices when connected via WiFi.
Conversely, when consumers sign up for a mobile service they should expect to receive it at home over WiFi no differently than they receive it over the outdoor cellular network. Companies such as Vonage and Skype do not share revenues with the underlying broadband providers, so why would a mobile provider share its revenues just because the call is delivered over the fixed network?
The weapons being employed in the battle for the building are also taking shape, with each operator type choosing a technology that supports its goals. Fixed-line operators are looking to an upcoming technology known as Voice Call Continuity (VCC), for which specifications are still being developed. VCC has set out to define how a dual-mode handset can be controlled by the fixed-line VoIP network when on a broadband/WiFi network in the home and how a fixed VoIP call can be transferred to the mobile network when the subscriber walks out the front door.
On the other side is Unlicensed Mobile Access (UMA), a 3GPP global standard developed by mobile and integrated operators to extend mobile voice, data, and IMS services over WiFi and broadband access networks. In the case of UMA, the mobile operator always controls the dual-mode handset, whether it is connected via the outdoor cellular network or the fixed network via WiFi. With UMA, subscribers continue to receive the same mobile experience, including the same services and user interface; however, the services work better and cost less when connected via WiFi.
In addition to fixed and mobile operators, there are integrated operators who own both fixed and mobile assets. For integrated operators, the end goal is the convergence of the fixed and mobile core networks together around IMS, yet the paths to this goal are wide and varied. Looking to a five-to-ten-year horizon, operators need to consider where to invest their time and money to resolve and win this battle for the building. Fundamentally, the battle comes down to personal communication services, specifically voice and the new generation of applications designed for consumers. Does the integrated operator increase its investment to deliver these services on the mobile network or invest in a transitional technology to link the fixed network to mobile service delivery?
This is a fight that will continue to be waged in the marketplace. The battle for the building will reshape personal communications services, while also shaping the future of fixed and mobile operators.
Steve Shaw is director of marketing for Kineto Wireless. He will be speaking at the industry's first dedicated UMA Conference, June 27-29 in Barcelona.