The Uneven Growth of FMC

Carl Weinschenk

The evolution of fixed mobile convergence (FMC), which is succinctly defined at Network Teks' Computer News Blog, continues.

 

As with any major transitions in technology, FMC is rife with both dangers and opportunities for telecommunications companies, vendors and, ultimately, users. Silicon.com uses a marine life analogy to position the players in this long-term drama.

 

The biggest threats are to incumbents, who the writer refers to as the whales. These companies must make long-term investments in their infrastructures while remaining profitable today.

 

Service providers who don't own infrastructure -- including new players who came into existence to take advantage of these opportunities -- are referred to as sharks. They can address the market without doing much of the heavy network lifting. In many cases, however, they lack the substance and familiarity of the facilities-based players.

 

The minnows in this briny analogy are businesses and services that want the best deal possible. There are, however, more than one type of minnow. The writer concludes that individuals, small businesses and cost-conscious departments in large enterprises will favor the sharks, simply due to lower costs. In many cases, however, larger enterprises will find these approaches too complex and will go with the whales, which can offer more comprehensive and easier-to-implement services.


 

Last week, the Yankee Group suggested that the bloom is off the rose for FMC. The bottom line, summed up near the beginning of the release, is that vendors need to shift from a market approach focusing on saving customers money to one that emphasizes productivity. The study points out that FMC uptake is 2 percent of large enterprises in Europe and is even lower in North America.

 

The reasons that FMC is in the doldrums are significant, the study says: Alternative approaches are viable, the technology is immature and -- perhaps worst of all -- decision makers see FMC as "nice to have," but not "critical."

 

FMC got some good news recently from the analyst corner, however. An Infonetics Research study released about a month ago said that almost 80 percent of responding service providers plan to offer FMC-based services by next April. This represents what the company calls a sharp increase over the portion that planned to do so in last year's study. The study also shows less desire to use the IP Multimedia Subsystem (IMS) as a way to achieve FMC.

 

Events bear out that prediction, as FMC solutions move into the marketplace. For instance, last week Sprint Nextel announced Airave, a femtocell-based approach that deftly switches calls between the cellular network and the Internet.

 

The Motley Fool says the traditional telephone and cellular companies have gotten over their initial reticence about FMC. The author provides three examples of telco-sponsored FMC, and says the sudden attraction is due to the digital phone and nascent wireless services being marketed by the cable industry. The bottom line, at least for this writer, is that FMC is just another battle in the endless war between the traditional phone companies and the cable companies.

 

FMC progress likely will grow in a staccato manner for the foreseeable future. Companies will continue to deploy tactical solutions that provide FMC benefits. However, the real and deeper value of FMC will be realized over the long haul only by implementing approaches that go to the core of how telecom systems work. The payback on such technology is much longer term and far less certain. The juxtaposition of the short- and long-term evolution will make progress look uneven.



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