(The following is taken from Rich Tehrani's VoIP Blog:)

While the recent ABI FMC report gushes with optimism regarding the FMC market, I get the feeling their numbers are off by a bit, if not a great deal. ABI says fixed mobile convergence technology will cost operators more than $450 million during the next five years.

ABI also predicts that in 2011, operators will generate $97 billion (yes, that’s billion, not million) in FMC service revenue.

Here is the problem, in my opinion. First of all, operators will likely spend more than they first intend on this equipment, so I would say the $450 million could exceed a billion pretty easily. Is this based on hard and fast research by yours truly? No. I just see massive opportunity to get into the space and roll out leading edge services.

I am seeing more and more announcements of FMC rollouts, which leads me to be pretty optimistic about this market. For example, Broadsoft just enabled the Faroese islands to have fixed mobile convergence. Then there is Reef Point Systems, which recently rolled out new FMC products. Nortel is pushing to be a leader in this space as is Brix Networks (News - Alert) and Radisys.

So while it is tough to predict how much spending there will be, certainly many companies are trying to get into the game and as they do they will evangelize and get more service providers to consider such solutions.

But once consumers get accustomed to phones that work on WiFi, I get a bit pessimistic.

I think it will be tough for service providers to generate $97 billion dollars. Here is the challenge. People will be able to speak over WiFi (News - Alert) networks for almost nothing. They will have a tough time paying for carrier wireless networks. The perceived value will be lower than anticipated.

But then again the whole issue here comes down to coverage. Will people have to speak wherever they are? Possibly. Will they pay for this privilege? Certainly business customers will. Also, will there be WiMAX and other wireless competitors coming onto the scene? I imagine mesh network technology could easily cover major cities, allowing new service providers to compete in these areas at a very low cost.

So, major service providers have a tough, competitive challenge ahead of them. The market could be absolutely massive for FMC solutions, but a bevy of disruptive technologies could change the outlook.

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Rich Tehrani is President and Group Editor in Chief at TMC. In addition he is the Chairman of the world’s best attended VoIP event, Internet Telephony Conference & Expo.