Can T-Mobile launch an FMC arms race?

Fixed-mobile convergence has always been seen in the United States as one of the pawns in the game of RBOCs vs. cable companies. Now T-Mobile is taking an early FMC position that may cause both RBOCs and cable companies to jump-start their own efforts.

Now T-Mobile, a player in neither camp, is taking an early FMC position that may cause both RBOCs and cable companies to jump-start their own efforts.

T-Mobile's offering, HotSpot@Home, is based on a new series of handsets that roam between Wi-Fi and cellular services. This means a Wi-Fi voice can be used with a home network or a T-Mobile hot spot. The service is available only in certain areas, but the company expects to roll it out nationally in 2007.

For consumers, a handset that can roam between Wi-Fi hot spots (including a home network) and the cellular network represents a potential savings in airtime charges on their cell phones. You can walk into your home (or another qualifying hot spot), and a call in progress will roam over onto your home network, saving you minutes. You also get reliable reception in areas where T-Mobile has hot spots, such as airport lounges. In theory, it will let you give up your landline for a purely untethered life.

Which, of course, may be why you're getting this from T-Mobile and not AT&T or Verizon. The RBOCs' quarterly numbers have shown declines in their access lines, so you would hardly expect RBOCs to jump out in front of the dual-mode handset trend. The cable companies, on the other hand, have every reason to want to support the kind of FMC T-Mobile offers.

This kind of FMC is a boon to the cable companies, because it could eliminate the problem of voice installation. Give customers a couple of Wi-Fi/cellular handsets, and they don't need to rewire their internal phone connections to use a cable voice service with multiple home phones. The problem is that the cable companies don't have cellular service; most have a relationship with Sprint for "quad-play" capability. With the RBOCs on the sidelines, it appears the cable guys are content to sit and not empower Sprint with new industry power and revenue.

T-Mobile changes all that, threatening both parties with loss of voice customers. If T-Mobile can get the handset and operations software tweaked correctly in these early trials, it could roll out the service nationwide and cause some serious competitive headaches for RBOC and cable company alike. That would shake up the voice market big time.

There are issues, and security is a big one. T-Mobile has some control over which Wi-Fi networks carry customer calls, but attempting to make the concept more widely available and useful could introduce security holes. Imagine a rogue Wi-Fi setup that's designed to snare your phone and record calls, steal the numbers you call and steal transactions you make.

A second issue is regulatory, including emergency calling. Wi-Fi setups right now would not necessarily record E911 data or may not comply with the Communications Assistance for Law Enforcement Act or other lawful intercept requirements.

It's clear T-Mobile hopes to work through these issues in early deployments, and the stakes are high. If T-Mobile can get a lead here, it could become one of the top players, easing out troubled Sprint. This kind of FMC is probably the killer application for new-generation voice, the force that will create the kind of revolution in the voice arena that has been predicted for a decade and has yet to arrive. It may be the force that creates universal broadband access that empowers municipal Wi-Fi networks, drives WiMAX deployment and even promotes content. T-Mobile has changed the game, and the changes may show up even in 2007.

Learn more about this topic

Where should FMC be on your radar?

11/20/06

FMC: What's in it for the enterprise?

09/05/06

The state of fixed mobile convergence

05/08/06

Copyright © 2006 IDG Communications, Inc.

The 10 most powerful companies in enterprise networking 2022