Fixed-mobile convergence

Fixed mobile convergence makes global progress

T-Mobile is launching its broadband voice @Home service throughout the US, which prepares them for an agressive FMC position. French telecom carriers are also expected to push harder on FMC and wireline broadband expansion as the consolidation in the market finally draws to a close, but that we believe is mirroring a worldwide trend.

Consolidation hasn’t been holding other projects back, it’s simply been a safer early response to declining revenue per bit. We believe that operators worldwide are preparing for a “transformation test” around FMC, broadband services, partnerships with Internet companies and developers, and other new areas. They’ll fund what works and cease funding what does not, and this could result in some pockets of spending and reductions as everyone takes the measure of their market. We think the situation will be more predictable in 2009 than in 2010 through 2012, when only some successful revenue initiatives will drive spending growth in service provider infrastructure.

Verizon backs LiMo

Verizon’s backing of LiMo is being perceived increasingly as a shot across Google’s bow, and also something that may be linked with an operator shift toward FMC and a more software-driven mobile strategy that moves away from IMS. The latter issue is, we believe, an important one for the industry, since any open platform strategy like LiMo or Android will devalue the network if no features are hosted there; everything becomes “over the top” by necessity.

Verizon open handset policy could promote loyalty

Verizon Wireless is launching its “open handset” strategy, a move that may have more impact on cellular voice pricing than its cap plan did a short time ago. Under the new program, handset makers can certify against what Verizon says will be minimal requirements and then sell directly to consumers, who will have to sign up for Verizon service but would not be required to sign service contracts. We hear that the non-contract services will be pricier than contracts offered, but that contract prices sans phone will likely be better. This will create additional slide in wireless cost and, we believe, further reduce infrastructure investment by wireless operators until an alternative revenue model is validated. We also believe it will promote FMC as a means of securing loyalty that was previously cemented through handset deals.

T-Mobile takes VoIP/wireless integration step

T-Mobile has announced it will be offering a limited trial of an unlimited VoIP calling service to broadband customers of any sort for $10 per month plus the cost of the equipment ($50). The new service may be a step toward integration of home voice services and wireless voice using dual-mode handsets, something T-Mobile has also pioneered. This is likely to create a price war in VoIP and may also hasten the FMC evolution of US providers, which will bring the femtocell/WiFi debate to a head.