Technology Assessment: FMC – Fixed Mobile Convergence

    DeLynn Bettencourt – [email protected]

Kevin Cheng - [email protected]

Yuval Elshtein – [email protected]

Qintao Zhang - [email protected]

Overview

• Trends in Spectrum • Fixed Mobile Convergence Technology • Industry Overview • Proponents of technology • Industry reaction • Strategic considerations

Spectrum trends

Source: Federal Communications Commission

Source: Cisco

FMC

Multi-Mode Mobile Device

Diagram of Multi-mode Mobile Device Usage Office (IPBX/WLAN) Coffee Shop (Hotspots) Airport (Hotspots) Driving (Cellular Network) Home (Wi-Fi or local wireline provider) USER

Multi-Mode Mobile Device

Diagram of Multi-mode Mobile Device Usage Office (IPBX/WLAN) Coffee Shop (Hotspots) ?

Airport (Hotspots) Driving (Cellular Network) Home (wi-fi or local wireline provider) USER

The Promise of FMC



Single phone and phone number for all locations



Able to choose the lowest rate and SEAMLESSLY transfer calls to take advantage of it



Have decent cell reception indoors

Multi-Mode Mobile Device

Examples of Multi-mode Phones Gigaset SL75 WLAN VoIP cordless telephone for the home or office Motorola CN620 dual-mode phone (not pictured) - roam between cellular and 802.11 networks

Works with about 75 per cent of access points from Avaya and Proxim Corp.

UTStarCom F1000 WIFI VOIP Phone

Industry Overview

Average Monthly Household Telecommunications Expenditures By Type of Provider

Average Monthly Household Telecommunications Expenditures By Type of Provider Year 1995 2003 Local Exchange $30.00

$37.00

Long Distance $21.00

$10.00

Total $51.00

$47.00

Wireless Provider $7.00

$41.00

Total $58.00

$88.00

Source: Calculated by FCCIndustry Analysis and Technology Division staff using survey data from TNS Telecoms

Industry Overview

Top US Wireline Network Operators Company Name Annual Sales (2004) Top US Wireless Network Operators Company Name Annual Sales (2004) Venture of Cingular Wireless 19.4 B$

BellSouth (wireline) and SBC Communications (wireline)

Verizon

AT&T [2]

71.2 B$

30.5 B$ Sprint/Nextel 27.4 B$ Verizon Wireless 27.6 B$ Verizon (wireline) and Vodafone (UK wireless) MCI 20.6 B$ Sprint/Nextel 27.4 B$ Sprint (US Wireless) and Nextel (US Wireless) T-Mobile 9.3 B$ Deutsche Telekom (German Wireline) Top Cable and Satellite Companies (Ranked By Sales)

Company Name Annual Sales (2004) Number of customers 19.3 B$ Comcast Cable

Directv 11.4 B$ 21.5 million - 7 million broadband customers 14 million Time Warner Cable 8.4 B$ 10.9 million – 4.1 million broadband customers Partnered with MCI and Sprint in order to offer Digital Phone, a VoIP telephony service

Pushing FMC Handset Manufacturers

Company Name Annual Sales (2004)

Nokia Motorola Samsung Siemens Sony Ericsson Mobile 39,6B$ 31,3 B$ 9,2 B$ 93,4 B$ 8,9 B$ • Fairly inexpensive to add Wi-Fi capability to a handset, •FMC is a truly disruptive technology that provides both cost savings and convenience to the customer

Affected players

 Wireline • Usually the ones who supply high speed

Internet access to businesses

• Interface to wired service while at home  Cellular Service Providers • Reduce customer churn • Cingular, Verizon, and Sprint/Nextel are

reselling access to a 3,300+ hotspot network operated by Wayport, Inc.

Affected players

  VoIP • Skype, a major VoIP provider, will have its

service installed on the i-mate PDA

• VoIP pureplays will need strategic partnerships

to ensure they remain in the FMC network

Handset Manufacturers • Should partner with service providers to

ensure rollout of FMC “Avaya To Resell Dual-mode Motorola Handset For Cellular, WLAN Networks”

Affected players

 Handset OS • Meanwhile, Microsoft is

partnering with Sleipner-Calypso to provide seamless transfer capability using software

• “Kineto Wireless, has joined the Symbian

Platinum Partner program and will port the Kineto UMA Client Software to the Symbian OS

platform”

Strategy Issues

  

System Effects:

• FMC relies on the interworking of several components: the handset, the cellular network, the VoIP technology, the WIFI network, among others

Lock-in

• Providing partial call rollover (transition only to authorized networks) might be employed by incumbent cellular carriers

Network Effects?

Strategy Issues

 Standards • 802.11x

• Seamless transition standards are crucial • Kineto wireless ( a startup supplier of

convergence hardware ) was able to sign up most of the major vendors to the UMA (unlicensed mobile access) standard, eventually becoming 3GPP (3rd Generation Partnership Program)

British Telecom Motorola Nokia O2 Siemens Cingular Ericsson Nortel Networks Research in Motion Sony Ericsson Rogers Wireless T-Mobile US

Questions?

       FMC – Fixed/Mobile Convergence (also called WCC - Wifi/Cellular convergence And Cell-Fi) AP - Wifi access point IP PBXs – Digital PBX system that uses VOIP Wi-Fi WLANs - inside the office, wireless phones that use the office WLAN VoWLAN – Combination of IP PBX and WLAN to have an in-office portable phone (also called Voice Over Wi-Fi) Wireline networks - Use wires and cables to connect customers’ premises to central offices maintained by telecommunications companies. Wireless networks - Operate through the transmission of signals over networks of radio towers.

WiMAX — World Interoperability for Microwave Access, also known as IEEE 802.16 — is an emerging global broadband wireless standard LEC – Local Exchange Carriers. Wireline service providers that connect a voice call locally VOIP – Voice over IP. Voice communications are normally split up and reassembled by telecommunications companies’ switching and routing equipment. Voice over Internet Protocol splits up the conversation into packets in the telephone, transmitting the conversation over the Internet.