Heavy Reading

Fixed-Mobile Convergence Reality Check

Fixed-mobile convergence the integration of wireline and wireless technologies and services to create a single telecommunications network foundation has quickly captured the collective imagination of the telecom industry, for some very obvious reasons. FMC promises to obliterate some of the physical barriers that now prevent telecom service providers from reaching all of their potential customers with all types of services. With FMC, wireline service providers may no longer be tethered to landline networks, while wireless network operators will be able to use the most robust network resources available to meet growing demand from mobile subscribers.

Fixed-Mobile Convergence Reality Check explores the perceptions (and misperceptions) that service providers and technology vendors have of FMC at this early stage to determine the most likely course that FMC development will take. The report is based on extensive interviews with key service providers and equipment vendors, as well as an online survey of more than 100 service provider professionals worldwide. Together, the interviews and survey results offer a thorough and accurate portrayal of how FMC is perceived in the telecom industry today, and what the most likely steps in its evolution will be.


The main purpose of the vendor interviews was not to acquire detailed technical information on vendor FMC products (which in any case do not fit into neat and discrete categories), but to ascertain vendors' overall views on FMC in terms of the catalysts, barriers, benefits, anticipated timelines, and likely rollouts of products. This approach reflects the overall objective of this report, which is to provide a high-level progress report on the current status of fixed-mobile convergence, and to evaluate its prospects over the balance of this decade.

Key Findings

Key findings from the report include the following:

The 2006-2007 timeframe will be critical to FMC technology and service development. Vendors interviewed for this report and service providers responding to our online survey consistently targeted 2006-07 as the period in which FMC will make the transition from theory to reality. This means that the time to prepare for FMC is already at hand.

In the core network, the boundaries between fixed and mobile technologies will be largely dissolved by 2010-2012. In backbone networks, FMC is driven mainly by the universal migration to an all-IP network, in which many of the core subsystems are identical across the boundary between fixed and mobile networks. The general acceptance of the principle of layered networks, and the adoption by ITU NGN standards-setters of key related mobile standards, especially IMS, is a key turning point. For incumbent telcos, this should enable the transition to a single core network able to handle the needs of both fixed and mobile subsidiaries, which are largely separately handled today.

Access networks are likely to continue to include a wide range of technologies even after FMC is established in the network core. In access networks, FMC is driven partly by competition among emerging (and established) vendors to enter or improve their position in the mobile and nomadic communications space, and partly by established and emerging service providers with the same objectives. Because this is a technically dynamic field in which there is no consensus at present, access networks are likely to remain hybrid and various, with a mix of single-bearer and multimode devices used to connect to them.

Service providers are taking a fairly optimistic view of FMC, and by and large they believe it is going to bring fundamental changes to the structure of telecommunications markets. Results from our online survey indicate a strong belief that FMC will eliminate the barriers that now exist between wireline and wireless networks over the next decade, although there's no consensus on the timing for this convergence.

FMC poses technological, organizational, and even marketing challenges that make it difficult to predict timing. As with other paradigm-changing initiatives, FMC will require more than technology to take root. While many service providers are positioning themselves to take advantage of FMC by playing in both the wireless and wireline markets now, others have declined to make that move, with some most recently AT&T actually having abandoned heterogeneous portfolios. In short, service providers have yet to prove that they can make the organizational and marketing transition to FMC.

For both service providers and equipment vendors, the central message here is that no one approach to the emerging converged environment will be successful. Instead, the keys to success will be twofold. First, equipment and service providers will need to focus sharply on the specific convergence needs of particular market segments, with a commitment to tactical adoption of technologies to meet those needs where necessary. Second, the industry will need to adopt highly flexible platforms that can be adapted to emerging requirements and can help to realize the long-term vision of access-aware devices and access-neutral networking.

Report Scope and Structure

Fixed-Mobile Convergence Reality Check clarifies the misconceptions and ambiguities now surrounding FMC in its critical formative stage of development. By using data and qualitative information gathered directly from technology vendors and service providers, the report delivers a complete and accurate accounting of FMC's expected development and its likely role in the transformation of today's segregated wireline and wireless networks into an integrated infrastructure.

The report offers an in-depth analysis of current technologies and standards that are likely to play a significant role in the development of fixed-mobile convergence over the next few years, as well as a close look at services that are laying the groundwork for more advanced FMC offerings.

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Results from an exclusive, worldwide survey of telecom service providers conducted by Heavy Reading specifically for this report shed important light on service provider perceptions and long-term strategic plans regarding wireless/wireline network and service convergence.

Question: Which of the following scenarios do you believe is most likely to occur in the voice telephony business over the next five years? [109 responses]

25.7% Cellular substitution (Most voice calls will be made over cellular networks using a cellular or similar handset, and the wireline network will be used mainly for broadband, entertainment, and data services)
60.6% Fixed-mobile convergence (Most customers will own a multimode phone that will be used to make calls over the most appropriate available network wireline or wireless)
13.8% Status quo (The current situation, in which customers use wireline phones on wireline networks and mobile phones on mobile networks, will continue to be the norm)

The report is structured as follows:

Section I provides an introduction and complete key findings of the report.

Section II delivers a detailed analysis of the various components that make up fixed-mobile convergence, with FMC defined within the framework of services, devices, and network technologies.

Section III looks at the potential economic impact of FMC on different types of service providers.

Section IV provides a detailed look at emerging services that include elements of FMC, focusing on case studies of innovative services from three providers: BT, iPass, and Swisscom.

Section V presents and analyzes results from a worldwide online survey of service provider professionals regarding their perceptions of and attitudes toward FMC.

Section VI identifies the various technologies that are now seen as likely components of FMC and assesses the value of each technology to convergence.

Section VII presents a series of scenarios for FMC development and analyzes the potential impact of each scenario on different types of service providers.

The report is essential reading for a wide range of industry participants, including the following:

Wireline and wireless service providers: Does your understanding of fixed-mobile convergence match the perceptions and expectations of your competitors and technology suppliers? Is your timetable for FMC development and deployment in synch with the rest of the industry? Which elements of FMC are your competitors likely to bring to market first? Which technologies are likely to play an integral role in FMC, and which ones may fall by the wayside?

Technology suppliers: What key priorities do your service provider customers have regarding fixed-mobile convergence? What steps are they taking now to get ready for full-scale FMC deployment? What are the main technology ingredients that will help them to make the transition to FMC? What are the most promising market opportunities in the FMC sector? Which carriers are taking the lead in deploying converged services, and how do your products fit into their plans?

Investors: When will the telecom industry's movement to fixed-mobile convergence reach critical mass? Which service providers and equipment makers will be in the best position to capitalize on the arrival of FMC? What are the critical technologies that will enable FMC to reach its full potential, and which companies are supplying those technologies? What are the potential stumbling blocks to FMC deployment? Which regions of the world are likely to be most aggressive in moving to FMC?

Fixed-Mobile Convergence Reality Check is published in PDF format. Purchasers of this report also gain access to a searchable database of results from the exclusive online survey of service providers regarding their FMC plans.

PRICE: $3,495
Senior Analyst, Heavy Reading
Graham Finnie has been tracking the telecom industry for nearly two decades as a journalist, analyst, and consultant...
2006-07 will be critical in the development of fixed-mobile convergence
Core networks will be the first network components to be integrated under FMC
No single access technology is likely to dominate FMC, even in the long run
Wireline and wireless service providers are optimistic about the benefits of FMC
Organization and marketing issues will affect the timing of FMC's arrival
Flexibility will be key to success in FMC for both vendors and service providers
59 pages of analysis covering the emerging fixed-mobile convergence market

Overview and analysis of key wireless and wireline technologies that will play a role in FMC

Case studies of early-stage FMC deployment plans at service providers worldwide

Survey results gauging telecom service provider plans and expectations for FMC

Responses from more than 100 service providers worldwide

Searchable online database with demographic breakouts

PRICE: $3,495
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