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November 09, 2006

ABI: Operators Will Spend $450 Million On FMC Infrastructure During Next Five Years

Fixed-mobile convergence (FMC), the development of telephony devices and services that enable switching between different types of networks (such as WiFi and cellular), has been getting a lot of press lately.

In a new report out today, market research firm ABI acknowledged the growing excitement over FMC, and projected that upgrading telephony infrastructure to enable the new technology will cost operators more than $450 million during the next five years.
The investment will pay off, though—ABI predicts that in 2011, operators will generate $97 billion (yes, that’s billion, not million) in FMC service revenue.
“Operators are seeing their core voice revenues come under pressure from VoIP, and they need to minimise call substitution,”ABI analyst Ian Cox (News - Alert) said in a statement.
Cox continued: “One way is to provide services over the broadband fixed network using a mobile device. Both dual use and single use devices will be able to do that over Wi-Fi and micro cellular access points in the home and office.”
 Several technologies currently are jostling to become the FMC standard, Cox noted. Those include Unlicensed Mobile Access (UMA), Session Initiation Protocol (News - Alert) (SIP) with virtual channel connector (VCC), picocell access points, and femtocell access points.
Cox said that the competition between technologies “will lead to a dynamic and competitive market developing over the next five years.”

For end-users, the advantage of FMC is ease-of-use (one device that works everywhere, a single contact list) and lower phone bills. But Cox warned that those factors alone won’t be enough to attract customers.

”Call charges need to be simple to understand, and dual-use devices need to be as appealing as single-use devices in terms of battery life, price and choice of models,” he said.

On the vendor side, the advantage of FMC is that it offers another vehicle for developing new SIP-based solutions. And operators save money by being able to use a single database for all subscriber data, across various services.

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Mae Kowalke previously wrote for Cleveland Magazine in Ohio and The Burlington Free Press in Vermont. To see more of her articles, please visit Mae Kowalke’s columnist page. Also check out her Wireless Mobility blog.


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