Over 190 million FMC users by 2013

Convergence has taken a battering in recent months as operators have failed to deliver the mass of subscribers they promised with the offer of multi-platform converged devices.

Despite this, industry analyst and telecoms.com parent Informa Telecoms and Media forecasts that over 190 million subscribers will be FMC users by 2013.

It’s well known that the propensity to hype new services is an unfortunate characteristic of the cellular industry and more often than not leads to the services themselves being mauled when they do not live up to expectations. Fixed Mobile Convergence is turning out to be a classic example of this phenomenon.

Informa analyst Paul Merry notes that part of the problem is that operators have largely failed to monetise FMC. “Within such an environment the justification for starting along the path to FMC becomes a real issue,” he said.

Of the subscribers forecast the majority will be device-based users – FMC subscribers who use a dual-mode capable device to access services – although femtocell subscribers will quickly grow to deliver 46 per cent of the total FMC subscribers forecast by 2013. Approximately 30 per cent of device-based FMC subscribers will use data services in conjunction with voice in 2009 rising to 42 per cent by 2013.

In order to identify the true value proposition of FMC, the analyst advises operators to look deeper at the changes FMC brings to the telecommunication service provisioning process, such as creating a number of efficiencies in the provisioning, management and quality of telecoms services offered delivering cost savings and providing tools to reduce churn and improve customer satisfaction.

The key to these improvements comes in the technology’s ability to offload data traffic from expensive cellular network platforms to fixed network infrastructure. The level of cost savings can be substantial with savings forecast to amount to approximately $5.3bn by 2013 if operators deploy femtocell solutions in a wholesale manner.

The second major opportunity that FMC provides is as an anti-churn device with bundled service offerings acting as powerful incentives to lock-in customers. Bundled service offerings also allow operators to effectively compete through discounting with losses recouped by the increased use in other services, such as discounting of voice to increase data or internet use within a bundled service offering.