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Tech Watch: The business case for fixed-mobile convergence

Fixed-mobile convergence is a potential windfall for both networking vendors and the channel. The challenge is picking how to get involved, when, and with which vendors.

Shifting a cell phone call to an internal IP network would save business customers millions of dollars a year in telecommunications costs, according to Tom Marcin, director of global communications for DuPont, who is responsible for about $100 million in global telecom spending every year. He used his spot on a Spring Interop panel to tell networking and telecom vendors to put together practical FMC options for customers quickly.

"We have 20,000 cell phone users, and people just love to use their cell phones," Marcin told the panel. "We've tried to change that with policies, but they love cells -- they have people on speed dial, know how to use them. We're finding it's not practical to change that behavior, and we're trying to drive the costs out in other ways."

Studies from In-Stat and Juniper Research Ltd. estimate that about a third of business calls are received on cellular phones when the owners are at their desks.

About 41% of all residential cell phone minutes are used from the home, according to Stuart Carlaw, mobile and wireless analyst at ABI Research Inc.

"But the home is also the environment that's most hostile to mobiles," Carlaw said. "So if you make [FMC] affordable using home networks and make it as stable and functional as it needs to be, that's an option that's incredibly attractive to consumers -- and that's where the volume is."

Allowing a call to a cell phone to be routed through a corporate WiFi network would drastically cut the number of cell network minutes customers use -- which is one reason U.S. carriers have been slow to deliver that ability.

Routing a call through WiFi also gives end users access to central telephone directories and all the call-control features of a VoIP network, without forcing them to move from a cell phone to an office-based landline.

But only a few cell phone service providers currently offer any level of cellular/WiFi integration, primarily for customers who use dual-mode handsets that are able to connect to both WiFi and cell networks.

France Telecom, for example, is testing FMC under its Orange brand, and has signed up close to half a million consumers, Carlaw said. British Telecom has close to 40,000 users on its service.

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In the U.S., T-Mobile offers a service called HotSpot, starting at $19.99 per month, that will shift a call automatically and invisibly from the cell network to a local WiFi network as the customer moves from place to place. Cincinnati Bell offers a similar service, as does Embarq, an Overland Park, Kan.-based telco that operates in 18 states and supplies residential, business, broadband and satellite services.

Those carriers are at the forefront, at least in the United States, Carlaw said. But they won't have the converging market to themselves for long. The demand is so obvious -- especially among consumers -- that 80% of carriers plan to offer some form of FMC by April 2008, according to an Insight Research Corp. survey of carriers.

But whatever happens to the carriers' business, FMC is a potential windfall for both networking vendors and the channel. An Insight Research report on the impact of FMC estimates the total worldwide market for FMC carrier services and equipment within the enterprise market alone will rise from an estimated $199 million this year to $15.9 billion in 2012.

Fixed-mobile convergence: Plenty of potential for the channel
  Home: Introduction
  1: The business case for FMC
  2: Opportunity for the IT resellers

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