Who Will Lead The Way To FMC? The Enterprise, Or The Consumer? - InformationWeek

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6/12/2007
10:52 AM
Eric Ogren
Eric Ogren
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Who Will Lead The Way To FMC? The Enterprise, Or The Consumer?

Well, that depends a little bit on how you look at the entire picture. Informa Telecoms & Media is forecasting that there will be 170 million fixed mobile convergence subscribers by 2012. While 145 million of them will be consumers, Informa believes that enterprises wil

Well, that depends a little bit on how you look at the entire picture. Informa Telecoms & Media is forecasting that there will be 170 million fixed mobile convergence subscribers by 2012. While 145 million of them will be consumers, Informa believes that enterprises will adopt more readily, and push for more advanced services.FMC will ramp up to 5.1% of the overall voice market and rake in $33.4 billion in revenue in the next 5 years. Even though the actual number of consumer users will outnumber enterprises (145 million and 25 million, respectively), the percentage of penetration shows that the enterprise is more interested (4.8% of consumers, 8.8% of enterprises).

Enterprises obviously face much higher telephony costs than your average household. Anything that can be done to lower those expenses will be seen as worthwhile in the eyes of bean counters.

Paul Merry, senior analyst with Informa Telecoms & Media, said, "This disparity is a good indication of one of the major challenges facing FMC. 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."

ABI Research agrees, in part, but feels the use of femtocells is going to disrupt some adoption of FMC on the operator side of the equation.

"Today, consumer FMC services that are based on Wi-Fi use UMA to manage the connection choice and handover between Wi-Fi and cellular networks," said ABI Research principal analyst Philip Solis." These services are ramping up quickly in Europe, due to intense competition between Orange, BT, and other mobile operators. In North America, T-Mobile USA is about to go nationwide with its UMA-based FMC service as well." "However," adds research director Stuart Carlaw, "mobile operators such as Vodafone, SFR, Softbank, and Sprint are at the leading edge among carriers exploring femtocell technologies. With their ability to work with any handset, and their potential for encouraging high data use, femtocells are very attractive when compared to VCC and UMA-based Wi-Fi services."

Since enterprises and consumers can only choose from what their operators are offering, this first step is an important one for wireless operators to take. T-Mobile has already cast its dice with Wi-Fi-driven FMC. None of the other U.S. wireless operators have chosen a path. Will Sprint's upcoming UbiCell femotcell product shape its FMC offerings? Time will only tell.

Whatever technology the operators choose for FMC, there's 170 million customers waiting to sign up.

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