Pipeline Publishing, Volume 4, Issue 1
This Month's Issue:
Come Together:
Fixed-Mobile Convergence
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Who's Your Daddy?
The Characteristics and Drivers of FMC

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Telcordia’s Grant Lenahan, executive director of wireless mobility and chief strategist, declared in a session on the operational impact of IP multimedia subsystem that the traditional operator business model is dead “The new paradigm, according to Lenahan, splits the layer in two: the operator layer and the third party layer.” [Telcordia: Operator business model is dead By Tim McElligott] Success of Blackberry is an example of third-party cooperation. Blackberry’s simplicity for delivering email and low power usage resulting in long battery life, made it an enterprise favorite. Blackberry’s network-based mail repository and push server also meshes very well with the architecture of FMC.

Never dismiss the Java and the open source community. A smart phone Linux is likely.

mobile devices. In its current product release announcements, Motorola is banking on video-enabled phones to reclaim their flagging market share. Getting more TV and Movies on phones is their stated strategy. Motorola’s president says they are moving away from depending on the success of one phone and will focus more on how the phone will deliver applications such as mobile video and music. Is this an opening up to FMC? Are they committed to the FMC multi-modal network device?

IDC finds mobile operators hesitant to embrace FMC in their report on FMC market

 

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Despite the views that the mobile service providers are set to be the big winners, we know that all is not well with mobile providers. They must find ways to increase the Average Revenue Per User. Many of these services rely on content provided by third parties, and that creates a myriad of content management, quality of service, and content vendor partner management challenges. The fastest growing market segment for mobile operators is the youth. They will leap on a newly introduced service and drive it to immediate profitability. They did this with text messaging; ring tones, and taking and sending pictures on their phones. Yet, they are famously not loyal to brands and will switch to another provider lured by the offer of cooler capabilities. And using those cooler capabilities requires ever increasing sophistication in the handsets as well as the networks. So to get that increase in ARPU, mobile providers must provide substantial subsidies of the cost of mobile phones/devices to improve stickiness; most tie that shiny new handset into an extension of the contract too - or their customers will skip to their competition.

Currently the hot trend in the mobile phone market is video, and on even thinner phones. “Thinness” and increased power consumption required for video add more expense to

evolution: “As yet, most pure mobile operators have not been as active in developing FMC services in comparison with fixed and integrated operators. It can be assumed that these operators do not see the benefit of partnering with fixed-line operators to offer FMC services. Rather, many pure mobile operators appear to believe that they can offer end users the benefits of FMC services on their own.” [IDC, CG29M]

Another source of higher revenues and margins are Enterprise customers, ripe for the introduction of advanced services. The devices which support advanced services and FMC network capabilities (smart phones with WiFi & USDPA or equivalent) are very expensive retailing for $400-$700 USD - beyond the budget threshold of most consumers. Mobile service providers are hoping to get unified services first to enterprise customers: in part because the enterprise customer can afford the high cost of smart, convergent devices; in part because they want the higher prices business customers pay.

More fuel for the continued merger of wired and wireless service providers, driving the rush

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