Value of FMC still lost on consumers

Although many new fixed mobile convergence (FMC) services have launched in Europe over the past year, many of the operator launches have highlighted how difficult it is to get the service off the ground, analysts said on Monday.

Industry analyst IDC believes that operators considering consumer FMC services should avoid positioning the technology as a new standalone product. Instead, it should be positioned as a complement to existing broadband and mobile services.

IDC warns that in particular, operators planning on launching an FMC service need to ensure that a significant number of their existing broadband subscribers are already familiar with home networking equipment. Home broadband penetration combined with home network penetration is the necessary prerequisite for the launch of an FMC service, the company said.

“Though Orange has had the most positive start with its Unik service in France, other operators have struggled,” said Jill Finger Gibson, research director for IDC EMEA.

“This shows that FMC technology is moving in the right direction and is not the major hurdle to FMC adoption, at least in the consumer segment. That hurdle is getting the customer proposition correct, launching the service only once the necessary prerequisites are in place, and positioning an FMC service as a ‘must have’ rather than a ‘nice to have.'”

IDC estimates that the FMC services market in Western Europe will grow at a compound annual growth rate (CAGR) of 173 per cent between 2006 and 2011, reaching $2.65bn by the end of the forecast period.

The major opportunities for FMC will be in the consumer and small/medium business segments rather than the large enterprise segment, the company said, as long as the messaging, pricing, and device offers are right.

The analyst believes that significant penetration of FMC in the enterprise sector will only occur after 2011, as the technologies needed for enterprise FMC to appeal to business technology decision makers are still in the development stages, and enterprise adoption of new technologies is a gradual process.