FMC missing the point

With the initial hype around Fixed Mobile Convergence (FMC) fading, analysts have warned that a narrow focus on services based on Unlicensed Mobile Access (UMA) could distract operators from achieving market breakthroughs with alternative FMC approaches.

A number of operators have already launched dual mode UMA services, such as US operators T-Mobile USA and Sprint Nextel, Orange and BT in the UK and TeliaSonera in Sweden. But analyst house Analysys warns that operators are in danger of overlooking more significant opportunities presented by market convergence.

“Many people regard FMC as being dual mode handset services that use WLAN for voice communication in the home and workplace, while using cellular services elsewhere,” said Analysys analyst Alastair Brydon.

But device convergence – where operators offer dual mode mobile devices that can access both fixed and mobile network services – is only one form of FMC. Early consumer UMA services lack simplicity, face strong competition and fail to target receptive market segments. Both BT and Deutsche Telekom have experienced disappointing take up of their respective FMC services.

“There may be much better alternatives than dual mode handsets if operators want to deliver successful FMC services,” said Brydon. The analyst suggested operators combine the marketing of fixed and mobile services – for example, with bundled pricing, special promotion and/or utilising common distribution channels – without necessarily delivering the services to a single device or using a common integrated network.

“Innovative converged marketing of fixed and mobile services can result in propositions that are much more appealing to end users than completely separate services,” said fellow analyst Mark Heath. “Marketing convergence can also avoid non-integrated operators being disadvantaged compared to integrated operators by their more limited opportunities with device and network convergence.”

Analysys acknowledges that a number of developments to UMA-based voice services – such as an improved range of handsets during 2007 – will enhance their attractiveness, but also believes that these advances will be countered by improvements in cellular only services, which will become more affordable, for example.