3G to be convergence catalyst in China

Fixed Mobile Convergence (FMC) adoption is off to a slow start in China, but the commencement of 3G services between 2008 and 2010 will prompt swift growth, according to new research from analyst In-Stat.

In 2005 In-Stat estimates there were about 400,000 consumer FMC subscribers, but that number is forecast to increase to 11.4 million by 2010.

The introduction of 3G services in China is anticipated to be a significant driver for the development of FMC, In-Stat believes. Three licenses are expected to be awarded early next year.

FMC is designed around a collaboration of capabilities between networks and client devices including the ability for a terminal to access the network anywhere and anytime, regardless of bandwidth and rates.

But In-Stat warns that FMC not only means the convergence of services and networks, but also the restructuring of management departments so as to deliver and bill for these ubiquitously accessible services. The analyst said that its research found that the four Chinese carriers agree that conflicts between departments will be a big obstacle in the development of FMC.

“From 2005-2008, convergence in China will mainly happen in the narrow band voice field,” said Kevin Li, analyst at In-Stat. “From 2008-2010, converged broadband voice and data will dominate the FMC market. After 2010, convergence of multimedia content will emerge,” he said.

In addition, the mobile carriers, China Mobile and China Unicom, in the face of FMC services being provided by full-service-providers China Telecom and China Netcom, are likely to provide new value added services to strengthen their positions in the mobile market. In-Stat cites mobile TV as one example.