FMC goes commercial, but will it thrive?

FMC goes commercial, but will it thrive?

After many starts and stalls, 2007 is shaping up to be the year of fixed mobile convergence. In fact, this summer we've seen two U.S. operators dip into the FMC pool and launch services. And it's likely that others will follow suit if these two early innovators find success with their offerings.

Regional operator Cincinnati Bell Wireless launched its CB Home Run package in June. CB Home Run lets subscribers make wireless calls via the firm's cellular network and via WiFi in their homes and offices and at the company's more than 300 WiFi hotspots. Cincinnati Bell is charging $60 for the Nokia 6086 UMA-based handset with a $15 rebate, and existing customers can add the CB Home Run service for just $10 per month.

On a much larger scale, T-Mobile USA launched its [email protected] service in late June. The service lets customers connect via the firm's cellular network and its 8,500 WiFi hotspot locations across the country. T-Mobile offers two HotSpot-compatible handsets--the Samsung t409 and the Nokia 6086. Each phone costs $49.99 with a two-year contract. To provide an incentive to users to sign up for the plan, T-Mobile is letting existing customers add the service for $9.99 per month for a single line and $19.99 per month for up to five lines for customers on a family plan.

While I commend Cincinnati Bell and T-Mobile for launching FMC at attractive price points ($10 per month for an individual/$20 per month for a family plan), I hope they rapidly add more handsets to their offerings. We know from history that the lack of compelling FMC handsets can limit growth. As we reported back in March, Deutsche Telekom canceled its FMC service called T-One. While the company claimed the cancellation was because it wanted to focus on its mobile Internet services, many industry insiders reported that the real reason the service failed to take off was because it was poorly marketed and lacked a compelling line up of handsets.

Current Analysis analyst William Ho, while slightly bullish on T-Mobile's [email protected] offering, also urges T-Mobile to increase its FMC handset portfolio. In a research note, Ho says "although the launch devices are priced well, the limited selection of two relative to the entire T-Mobile handset portfolio forces a user to make a tradeoff between fashion and functionality (e.g. RAZR, Sidekick, Pearl) for voice value."

To hear more about the FMC debate, tune into the FierceWireless Webinar "FMC Progress Report" on July 17 at noon EST. I'll be moderating the Webinar and my guests include ABI Wireless Research Director Stuart Carlaw, Tango Networks COO Alastair Westgarth and Evan Miller, IT operations strategy director at Texas Instruments. Click here to register. -Sue

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