You can’t complain that there’s nothing going on in the area of fixed-mobile convergence, but there are some questions about exactly what is happening. The market has sent three different signals over the last few months, and just how FMC might impact the fixed or wireline service side of networking depends on which signal prevails.
Some of the big cable operators, including Comcast, Time Warner and Cox, finally are launching mobile virtual network operator ventures with Sprint. These services have emerged later than expected and are offered in a small part of the cable giants’ total service area, but they’re still a shot across the bow of the RBOCs. The Bells had hoped that mobile would differentiate them from their cable competitors.
The cable mobile voice offerings are a combination of “passive bundles” that offer integrated billing and unlimited calling between the mobile service and cable voice service, as well as some integration of voice mail, access to e-mail and program listings on mobile devices. But these new services aren’t fully converged voice and data; they’re a step between.
AT&T has seen the obvious threat of the cable move and responded with its own program to make voice calling between its mobile service and wireline voice customers free. Like the cable plans, the AT&T Unity plan lets inter-calling customers talk without extra charges and without consuming mobile minutes. Verizon likely will follow suit.
So far, this seems to be a new example of the telecom arms race. If one player offered wireless/wireline unlimited calling, they’d clearly win the hearts (or at least wallets) of consumers. If everyone does it, the move is nothing but table stakes and an example of continued commoditization of voice services, including mobile.
At least one player doesn’t want a purely price-driven FMC market to happen and expects to make money on preventing it. Ericsson, one of the international equipment giants that supply both wireline and mobile providers, acquired broadband remote access server vendor Redback Networks. While this move gives Ericsson a foothold in the wireline access space, it hardly gives the company a full complement of metro equipment. Instead, Ericsson likely expects to leverage its mobile position, but that can be done only if FMC becomes more than stuffing another bill into the same envelope.
Having an equipment vendor push FMC instead of just singing its praises to look politically correct could provide some interesting market pressures. The dynamic between service providers and equipment vendors has been that the former raise problems that they expect the latter to solve. If none of the vendors wants to rock the boat, or if they don’t see much chance of near-term revenue, they may hang back a bit. Many of the service providers I’ve talked to believe vendors are not presenting a full and compelling offering. Might Ericsson, spurred on by the need to earn a payback on its Redback investment, be more aggressive in making FMC look real?
If so, the cable offerings may hold one of the solutions. FMC can’t be just about getting mobile and fixed voice onto a common infrastructure. Clearly both cable companies and common carriers think most of the benefits of voice FMC can be realized without converging anything but calling plans. TV listings on phones? Why not? Maybe controlling personal video recorders from the mobile handsets would be next. Add in the ability to roam between in-home Wi-Fi and 3G, and you can expect people to watch programs on handsets or portable devices.
FMC is a mass-market process; you can’t do something that fundamental to the way networks are built without a broad customer base. Mass market today means entertainment market and youth market. Ericsson is a strong player in key areas that a shift to FMC entertainment would expose, such as the integration of back-office software to support complex entertainment-based content relationships with FMC customers.
There may be more mergers and acquisitions for Ericsson, which will drive other vendors to respond with their own real-equipment FMC strategies. This will expose another Ericsson weakness that is not so easily addressed: articulation. Other vendors singing FMC’s praises may not be enough to make FMC a reality, but it is definitely part of the equation. Voice lessons, Ericsson?
