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| Tuesday, 22 January 2008 | |
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There is a war going on for consumers communications spend in their own homes. From mobile operators, to VoIP operators, cable guys to Internet service providers, the fixed line operators that not that long ago dominated domestic communications are being hit hard. Peter Purton files his despatch from the front line: his living room.
Fixed mobile convergence started out as a strategy for fixed network operators to reclaim some of the revenue mobile rivals were taking from them. Now it is being turned on its head to push even more revenue the mobile operators’ way.
Close to half of all calls on mobiles are estimated to take place within ten feet of a fixed phone, either at home or at work. And with the number of mobile phones in use in developed countries well beyond double those of fixed and rapidly heading for treble, it is easy to see why fixed operators should be concerned. The convergence strategies we have seen so far have been based on selling mobile phones with inbuilt Bluetooth or WiFi connection that would allow them to be used as fixed line phones when in range of a home base station. The results have been varied. In the U.K. BT (www.btplc.com) launched its Fusion service in June 2005 but despite over two years of active marketing the number of customers have stubbornly remained in the mid tens of thousands range, a very small number indeed in telecommunications carrier terms. The limited range of compatible handsets on offer has not helped nor has the perhaps mixed marketing message which may leave prospective customers wondering what they are buying – a cordless or a mobile phone. In Germany Deutsche Telekom’s (www.deutschetelecom.com) experience was so bad that it led them to abandoning the project altogether. There things were not helped by the fact that all mobile operators already offered a good value home zone deal designed to promote use of the mobiles in the home. The end result was that the former national carrier found it hard to offer appealing pricing plans from which it could still make a profit. Only France Telecom’s (www.francetelecom.com) And France Telecom is of course equally as significant a mobile network operator as it is a fixed one. The fact is that the operators that now look like taking the best advantage of convergence technologies are the mobile operators, especially those such as France Telecom who have both types of network at their disposal. Many of today’s mobile operators are owned by fixed operators, points out Graham Cobb, director of IMS product marketing at Telcordia Technologies (www.telcordia.com). “They don’t particularly care whether the user uses a fixed or a mobile line as long as it is their line and not one of their competitors.” They will be out to use convergence to counter competition no matter where it comes from, he says. At the end of the day any successful convergence strategy is going to be about services, says Cobb. “Nobody wants to compete on price.” Convergence today is about leveraging the power of IP to provide services that are device and network independent, says Vikram Saksena, CTO at Sonus Networks (www.sonusnetworks.com). Take messaging as an example. In today’s world how we message depends on what device we are using at the time and what network we are attached to. At various times of the day we may use various forms of messaging. We may leave voice mails for business associates when we tried to reach them using our fixed line phones and they did not answer their phones. We might send them emails if we had queries that did not require an urgent answer. Or send them an SMS to let them know we are running late for a meeting. And this is getting more complex all of the time as networks and devices proliferate. If we are to maintain our sanity, and the network operators their customers, we need device and network independent services, says Saksena. The all IP world offers great scope for exciting new services and greater convenience to customers, agrees Dante Iacovoni, marketing director of Swedish home gateway maker Tilgin (www.tilgin.com), but there is a problem. It is not clear how to get the consumer to pay incrementally for all of this new functionality. “It is time to move to a new business model,” he says. Iacovoni suggests that network operators learn from Web2.0 companies and no longer concentrate on their subscribers as their revenue base but look towards earning from advertising and sharing revenues from other service providers. “We are at the threshold of great change both with the technology and the business model. Those companies that are not keen to address this will face extinction.” Another issue is customer management. Jason Grant, head of pre-sales at Reading based OSS fulfillment company Axiom (www.axiomsystems.com), had recent personal experience of a converged offering from a major network operator and he found it a disappointing one. Data rates were lower than he expected and the phone quality average but what concerned him most was that he was receiving separate bills for the mobile and fixed services and that he had to go through different channels to address any issues he had with either. “Quite clearly the mobile and the fixed side were two separate organizations. They had no common provisioning or billing,” he says. This was probably due to the multi-vendor environment most operators work within, says Grant. But that is no excuse. Axiom has been closely involved with the Telemanagement Forum (www.tmforum.org) to create a standard to ensure platforms work in multivendor environments. The finals touches are being put to the Products and Services Assembly or PSA specification which should help fill in this fault line that runs through the convergence story. There is of course a common threat on the horizon for both fixed and mobile operators, the Internet. The emergence of Skype as a provider of telephone services has made everyone sit up and think about convergence in a new light. Here messaging and voice, fixed and mobile services have been merged and interlaced with remarkably little effort and investment. “Web 2.0 will bite our customers if they don’t start doing something about it,” says Sonus’s Saksena. But they do not have to concede defeat either, he adds. They have some significant advantages, says Saksena. “They have information about the customers others don’t,” he says. “For a start, they know where they are,” he adds. Some will team up with third parties to exploit this. Others will sell the information. Yet other will make their own services designed to exploit it. Most, says Saksena, will do a mixture of all three. Those that decide to make more of their own services probably have the best chance of a more prosperous future but they will be competing directly with the Web 2.0 world. “Once you are on IP there is very little difference between network operators and Internet companies, at least from a technical point of view,” says Saksena. Where there still is a big difference, he adds, is with culture. “Mindsets need to change,” he says. Network operators will no longer be able to rely on the tried and tested model of making a business case, then of it stands up designing and creating a service. The world will move to fast for that. They will have to learn from successful Internet companies who have shown themselves masters at launching services and letting the market decide how they go from there. He is optimistic network operators will make the change. “The change will come about automatically,” he says. “The growing influence of the new generation of engineers will see to that.” PANEL
The Home In 2010
A customer is at home watching TV when a call comes in. All the phones ring – whether mobile or fixed, primary or extension. And caller ID information is flashed on to the television screen along with the option for the customer to take the call or push it to the answering machine. Should the customer decide to take the call he can also do so by picking up the closest phone and the TV automatically pauses. Then if a call comes in to someone else in the household, the TV again displays the caller ID information and the phones ring with a personal tone dedicated to that household member. That household member may chose to take the call on his or her cellphone using the cellphone’s WiFi connection to the home gateway. If that household member leaves the house while still on the call, the call automatically and seamlessly transfers to the 3G radio of the cellphone. Household member number one, meanwhile can go back to watching TV – just where he or she left off. Other ideas include receiving friends videos on your home TV, sending texts from TVs to mobiles and vice versa, remotely instructing home devices such as video recorders, central heating or air conditioning and remote surveillance of homes and second homes, a baby’s room or business premises. Swedish company Tilgin believes that this could be everyday technology by 2010 with first trials planned for 2008.
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