Consumer Move to Mobility Will Transform Telecom

Carl Weinschenk

Telecommunication is undergoing an historic sea change. Even though that change is driven by the consumer side of the industry, it is so basic and fundamental that its impact will transform the business segment as well.


The change -- that people are giving up their landlines -- is starkly illustrated in two studies featured in this Wi-Fi Planet piece. The first is a Yankee Group report that says about 40 percent of mobile calling is made from home. The complementary and perhaps even more stunning finding in a report from Harris Interactive is that only 58 percent of adults in the U.S. subscribe to wireline services, while 74 percent have wireless phones.


This transition -- called by some fixed-mobile substitution (FMS) -- may not seem like a big deal to anyone under 30 or so, but it is striking to those who grew up in the wireline age. The transition from wired to wireless clearly means that a lot of money will be redistributed during the next decade, and that there will be a new set of winners and losers. The story points to some of the early moves in the game, such as T-Mobile's HotSpot and Sprint's Airave.


Mobilised reports on a study from Insight Research that verifies demand for fixed to mobile convergence (FMC) is on the consumer side, while enterprises remain reticent. During the next five years, Insight predicts, FMC will generate $35 billion worldwide. The piece quotes Insight president Robert Rosenberg as saying that the U.S. is trailing Europe and Asia in FMC development. The study also states the obvious: As consumers move more fully to wireless, revenues for fixed long distance and local providers will decline. This will put a lot of money in play, and the savviest players will thrive.


This piece from Siemens Enterprise Communications posted at The Lippis Report site ends with a product pitch for HiPath MobileConnect. Before it reaches that point, however, it offers a good overview of the FMS and FMC.


The report starts by showing how the phenomenon is growing: by 2010, it says, almost 80 percent of adults around the world will own a mobile device. The mobile network usage increase that will accompany the proliferation of devices will cut drastically into lower-cost wireline connectivity. The writer then says that 40 percent to 80 percent of wireless usage occurs when the person is in the home or workplace. This is inefficient, since cellular networking is comparatively expensive. Siemens sees FMC as a way to cut costs as FMS grows.


This transition is further along outside the United States. Late last month, Seeker Wireless said that its SeekerZone technology is being used for virtual fixed-line service provisioning in Eastern Europe. SeekerZone, the story says, encourages FMS by offering special pricing plans based on the user's location. The release says that the approach is efficient because it is based on subscriber identity module (SIM) cards instead of Cell-ID technologies. This, the company maintains, enables 99.5 percent in-zone reliability.


Fixed mobile convergence is a broad area, and this posting at the Alan Quayle WebLog is helpful in setting a landscape. There are three forms of FMC, he says. The first is a "handset-centric" approach that mainly relies upon the cellular network. Other approaches -- Wi-Fi, Digital Enhanced Cordless Telecommunications (DECT) or Bluetooth -- handle the most challenging in-premise connectivity. The second approach uses virtual private networks (VPNs) to exert control, the post says. Desktop phones and mobile devices also are used. The third, the substitution approach, exchanges big chunks of the wireline network with their wireless equivalents.

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