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Towards a market-driven policy for FMC

Posted: 16 Feb 2009     Print Version  Bookmark and Share

Keywords:fixed mobile convergence  multi-play services  FMC  broadband Internet 

As mobile service and Internet users, we have put up with call drops and network busy messages, as well as content filtered or policed by ISPs and corporate proxy servers. Perhaps we don't have to anymore.

There is a promising technology that can improve the coverage and capacity of mobile calls especially while indoors, promising seamless mobility with broadband Internet access that breaks the barriers of corporate walled gardens and provides complete "net neutrality" (still under much debate). We are clearly entering a new era of broadband—2.0 you may call it—wherein we migrate from the current "always on" offering to "always available" broadband Internet access. This is fixed mobile convergence (FMC).

FMC is a technology much-debated by industry players and operators alike, and its successful market adoption through policy regulations seems to face many hurdles before operators and consumers can agree on acceptable business models. Service offerings by operators today are more revenue driven, rather than addressing convergence needs and cost effectiveness that consumers demand. It has become mandatory for operators to constantly innovate upon their differentiated multi-play service offerings to stay in the competition and retain customer loyalty while attracting new users, even with tight monthly flat-rate offerings in a favourable economic climate.

Although FMC as a technology might lead to further decline of the per-minute operator revenues, richer blended multi-play services are expected to help service providers attract and retain customers with innovative and value added service offerings, thus increasing the overall ARPU. This article aims to encourage a market driven policy, in which FMC can flourish as a technology advantage while complimentary business models can still emerge and thrive.

We are seeing a noticeable market trend today, where a range of solutions and service offerings around the FMC technology—such as femtocells, UMA and IMS/VCC dual-mode solutions, and DECT phones with integrated VoIP—is being presented by mushrooming companies. Home networking has become even more cost effective with HomePlug (power line communications) and UWB leading to a complete digital home experience. These technologies are slowly being embraced by service providers and retail markets while the variants of FMC technology at the core itself is fragmented due to consumer driven approach and operator (revenue model)-driven approaches, leading to a dramatic delay in market rollouts.

This article proposes an appropriate regulatory framework, to be brought under a common umbrella of policy control, through a case study on mobile TV, which brings in the broadcasting sector into the foray of telecommunications and showcases how businesses around the world are converging on the FMC service delivery platform.

The convergence is happening in three key domains in the context of a mobile device—the terminal device convergence, the network convergence and the service convergence. This, in turn, is fuelling IP multimedia sub-system (IMS) offerings to happen sooner than the industry would have anticipated earlier on. Communication service providers (CSPs) should see FMC as a new technological opportunity to deliver innovative and revenue-generating multi-play services as part of their transition to 3G/4G wireless environments, while wireline operators can view seamless handoff as a way to compete with mobile operators. Operators who offer both cellular and wireline services can offer converged multi-play services in a single flat-rate billing. Originating in-home or in-office calls over the fixed line via the mobile phone interface encourages customers to keep their fixed line. Cable operators can use FMC to gain a new revenue source through VoIP and WiFi offerings. New market entrants such as wireless ISPs can target a previously untapped segment or one that has proved difficult for mobile operators. Mobile virtual network operators (MVNOs) can grow with innovative service offerings and revenue generating business models.

Figure 1: The converging mobile terminal device.

What FMC offers
The concept of FMC itself is very broad, multi-faceted and is continuously evolving, especially in consumer-driven usage models, through innovative solution offerings by technology vendors. Until recently, OEMs used to bring to market a new handset almost every three months, targeting specific applications and end-users leading to fragmented usage models. But slowly, this trend in consumer demand is changing leading to congruence in device offerings driven by convergence in service offerings. Figure 1, depicts the converging mobile terminal device where an array of seamless enterprise, mobile and home applications are available on today's smart phones, bringing a mobile broadband experience that is "always available" any time, anywhere, and on any device and network. It creates a framework for innovators and operators alike to enable and offer integrated multi-play solutions and services.

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