Consumer shift to mobility will transform telecommunications
Telecommunications are undergoing a radical historical change. Although that change is driven by the consumer side of the industry, it is so basic and fundamental that its impact will transform the business segment as well.
The shift, that people are giving up their landlines, is clearly illustrated in two studies featured in a recent Wi-Fi Planet article. The first is a report from the Yankee Group that says about 40 percent of mobile calls are made from home. The complementary and perhaps even more surprising finding in a Harris Interactive report is that only 58 percent of adults in the US subscribe to landline phone services, while 74 percent have cordless phones.
This transition, dubbed by some FMS, may not seem like a big deal to anyone under 30, but it’s surprising to those who grew up in the landline era. The transition from wired to wireless clearly means that a lot of money will be redistributed over the next decade and that there will be a new set of winners and losers. The story points to some of the game’s early moves, such as T-Mobile’s HotSpot @Home and Sprint Nextel’s Airave.
Mobilized reports on a study from Insight Research that verifies that the demand for fixed-to-mobile convergence (FMC) is on the consumer side, while companies remain reticent. Over the next five years, Insight predicts, FMC will generate $35 billion worldwide. The article quotes Insight president Robert Rosenberg as saying that the United States is behind Europe and Asia in the development of FMC. The study also states the obvious: as consumers switch more to wireless technology, revenues for local and fixed long distance providers will decline. This will put a lot of money on the line and the smartest players will prosper.
This part of Siemens Enterprise Communications published in The Lippis Report The site ends with a product launch for HiPath MobileConnect. Before I get to that point though, he gives a good overview of FMS and FMC.
The report begins by showing how the phenomenon is growing: by 2010, it says, nearly 80 percent of adults worldwide will have a mobile device. The increased use of the mobile network that will accompany the proliferation of devices will drastically reduce lower-cost wired connectivity. The writer then says that 40 to 80 percent of wireless use occurs when the person is at home or at the workplace. This is inefficient, as cellular networks are comparatively expensive. Siemens sees FMC as a way to reduce costs as FMS grows.
This transition is further along outside of the United States. Late last month, Seeker Wireless said that its SeekerZone technology is being used for provisioning of virtual landline services in Eastern Europe. SeekerZone, the story goes, encourages FMS by offering special pricing plans based on the user’s location. The statement says the approach is efficient because it relies on subscriber identity module (SIM) cards rather than Cell-ID technologies. This, the company maintains, allows reliability in the area of 99.5 percent.
Fixed mobile convergence is a wide area, and this post on Alan Quayle WebLog It is useful for establishing a landscape. There are three forms of FMC, he says. The first is a “phone-centric” approach that relies heavily on the cellular network. Other approaches (Wi-Fi, Digital Enhanced Cordless Telecommunications (DECT), or Bluetooth) handle the more challenging local connectivity. The second approach uses virtual private networks (VPNs) to exert control, the post says. Desk phones and mobile devices are also used. The third, the replacement approach, swaps out large portions of the wired network with their wireless counterparts.