FIXED MOBILE CONVERGENCE TO REACH 170M SUBSCRIBERS AND 5.1% OF THE TOTAL GLOBAL VOICE MARKET BY 2012

Released: 5th June 2007

Informa Telecoms & Media forecast 170 million Fixed Mobile Convergence (FMC) subscribers by 2012 generating $33.4bn of revenue, but caution that without an increase in cooperation between all of the value chain players involved the industry faces an uphill struggle.

The majority of these subscribers will be within the consumer segment with 145 million by 2012 but relative penetration will be lower than the enterprise segment where 8.8% of the total subscriber base will use FMC versus 4.8% for the consumer.

This disparity is a good indication of one of the major challenges facing FMC, states Paul Merry, Senior Analyst with Informa Telecoms & Media and lead author of the study. FMC is a good idea for operators as it reduces OPEX but is less of an attraction to consumers at least in its early stages. Merry explains, business use of FMC makes sense as it enables a number of attractive services such as unified messaging, IP PBX integration and a single communication account that can be managed by corporate IT personnel.  Consumer FMC in comparison only offers the convenience of a single bill and discounted in-home pricing currently.

"As a consequence, consumer FMC faces a substantial challenge in capturing the consumer imagination", Merry asserts. This process is not helped by a certain lack of forward movement on the issue of standardisation. Uncertainty remains on the technological evolution toward converged networks, Merry concludes. IMS was lauded as the solution that would provide fully standardised convergent capabilities but the timescale and cost of implementation has caused increasing concern within the operator fraternity. Interim solutions have been suggested such as UMA and latterly femtocell's which solve the problems of a lack of dual-mode handsets, but such solutions do not provide the type of rich IP-orientated service envisaged by FMC.

The release of the IMS Voice Call Continuity (VCC) standard toward the end of 2007 will increase the viability of IMS but is unlikely to silence those critics who argue IMS offers little beyond that already available and at a considerably higher price.

Merry cautions that such opinions should not be taken completely at face value. He adds, "there are a number of vested interests at play within the convergent telecommunications marketplace". One just has to consider the major value chain players involved.  There are fixed operators desperate to counteract fixed mobile substitution (FMS) and supportive of IMS as it allows them to keep control of the call event. There are pure cellular operators who are attempting to counteract new entrant moves into cellular and increase FMS and are supportive of UMA and femtocell solutions as they allow the call event to stay in their realm of control.  There, broadband and hybrid operators who wish to offer the fullest selection of services in order to increase customer take-up and retention who are supportive of whatever technology allows them to do this. From this chaos of interests FMC must try to develop.

"Developing FMC to its full potential will be a sizeable challenge requiring financial and intellectual investment as well as a discarding of vested interests" Merry concludes. "Convergence is the purest form of standardisation and requires that all parties submit to the common aim", he adds.

The FMC market faces a number of challenges in the coming months and years that must be tackled through a combination of clarity of focus, concentration on core skills and expertise and a willingness to invest in the long-term future of the telecommunications environment. Whether the goal of FMC is attainable remains to be seen but the level of impetus behind it means any laggards who wish to resist may find themselves overcome in the tide of change.

About Fixed Mobile Convergence Strategic Report

Fixed Mobile Convergence - 2nd edition examines the evolving nature of FMC networks, business opportunities and challenges for all players in the value chain. This edition provides a detailed analysis of the future of FMC and discusses the impact it will have on existing technologies, business models and markets.

For more information, visit www.informatm.com/fixedmobileconvergence

About Informa Telecoms & Media

Informa Telecoms & Media is the leading provider of business intelligence and strategic marketing solutions to global telecoms and media markets. Driven by constant first-hand contact with the industry our 90 analysts and researchers produce a range of intelligence services including news and analytical products, in-depth market reports and Datasets focused on technology, strategy and content.

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For more information please contact:

Natasha Mensah

Informa Telecoms & Media, Media Relations

Natasha.mensah@informa.com

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