Proximus' Wireless Office and Movistar's Uno Professional: FMS or FMC?

Summary

Issue

Fixed-mobile convergence (FMC) is the new baby of all the major service providers in Europe, with individual carriers playing to their strengths to launch a consumer and business-focused FMC offering. Key FMC players and products focusing on the corporate market segment include BT Fusion (WiFi) for SMEs, Orange 'Unik' for SOHOs and SMEs, Telecom Italia's Unica for prosumers and SMEs and T-Com's T-One and Neuf Cegetel's TWIN for SMEs, respectively. However, the feature sets being supported in most FMC offerings find their genesis in fixed-mobile substitution (FMS) offerings, such as a single number for the desk and mobile phone, PBX functionality such as short extension dialling and call forwarding, lower calling costs within the office 'zone,' etc. Therefore, the question is, will products such as Proximus' Wireless Office and Movistar's 'Uno Professional' be able to survive in the evolving market trend towards FMC?

Current Perspective

Proximus has launched Wireless Office as a FMS service for the enterprise and SMB segments, and Movistar (Telefónica Spain) has launched of 'Uno Professional' for the prosumer and SOHO segments in Spain. These launches strengthen the respective players' position in their domestic markets. However, while Proximus positions its Wireless Office as a FMS service in Belgium, Movistar positions its Uno Professional as a FMC service in Spain. Both solutions are similar in terms of the functionalities and benefits they bring to their respective target customers, but essentially neither is a fixed-mobile convergence service; they are well-packaged fixed-mobile substitution services.

On comparing the differences between a FMS and FMC service, we need to consider the feature sets supported as well as the technology deployment on the network core (which is more important than development at the access).

Metrics	Fixed-mobile Substitution (FMS)	Fixed-mobile Convergence (FMC)
Similarities
Short-code Dialling	Yes	Yes
Conference Calling Facility	Yes	Yes
Max Conference Call Participants	Typical range is six to ten	Dependent on PBX functionality
Call Transfer	Yes	Yes
Calling Restrictions	Yes	Yes
In-coming Call Management	Yes, a PBX feature	Yes, a PBX feature
Corporate Address Book	Yes	Yes
Differences
IP Support on Access	Not essential	Yes
IMS Integration at the Core	Not essential	Yes, true FMC cannot take place until there is convergence at the network infrastructure level; this is a result of IMS or IMS-like functionality in the network core allowing all traffic to be ‘IP’-based.
Handset Dependence	Low, workable with standard GSM device	High, requires a dual-mode device; costs for the handsets, though declining, remain significantly higher than those of GSM/GPRS-enabled devices.
Coverage	Easy to deploy in a campus or building environment	Requires in-depth study of surroundings and site survey for inter-hotspot switching
Handover between Home Zone and External Environment	Not an issue; works both ways	Although service providers claim seamless handover both ways, there are concerns while moving into a home zone from an external environment during an active call.
Scalability	Not an issue	Dependent on PBX and box functionality for simultaneous voice channels
Related Solutions	VPN, iVPN	iVPN, mobile applications, presence-based management

Therefore, the foundation of a FMC service lies in the network core, which is essentially IP-enabled and has IMS capabilities. These IP capabilities can then be extended to the access through WiFi or other access technologies to facilitate true FMC. Hence, the differentiator is not significant at the base feature level, but it is visible as we move up the value chain and look into the level of application functionalities.

While market hawks eagerly follow the moves made by 'Fusion,' 'Unik' and their peers, the service providers have to note that integration capabilities with the enterprise IP environment will define the success of their respective solutions. Interestingly, the service providers in advanced stages of FMC solution development are those that have deployed IMS capabilities in their network environment.

So, what should the major players do to address the market?

Recommended Actions

Vendor Actions

. Through BT Fusion (WiFi edition), BT Global Services has a more complete FMC offering than other players in the market. Along with PBX functionality and IP support, BT Fusion offers application integration capabilities as well. However, BT Fusion supports a limited number of handsets and none of these is a smartphone. Therefore, while launching its much-awaited BT Corporate Fusion, BT Global Services should ensure that it offers a good handset portfolio for the enterprise market.

. Telecom Italia, T-Com and Neuf Cegetel need to work towards stronger application integration with their respective FMC offerings in order to make their solution more compelling to the enterprise and SME market. In addition, they should consider providing remote IT support capabilities (application, security and access) for SME customers.

. Vodafone should work towards integrating an IP-centric offering with its FMS service. Vodafone's Wireless Office is a market leader in the FMS space and has significant presence across 14 markets. Given the uptake of its solution (over 1.5 million business subscribers), it should leverage its recent partnership with Fiberlink (see 'Vodafone UK Steps into the Total Communications Provider Market,' November 27, 2006) to offer home-zone roaming capability in WiFi hotspots over a secure mobile SSL VPN connection for enterprise customers.

. Orange Business Services' 'Unik' is a strong FMC service offering in the making (see 'Orange Business Services Launches Unik for Business,' December 15, 2006). However, Orange Business Services needs to work more towards integrating a host of applications with 'Unik' and explore the feasibility of integrating it with its RAS proposition: Business Everywhere. Currently, 'Unik' is limited to the French market, but it will be available across the Orange footprint in Europe over the next year and this is when integration with Business Everywhere will start paying dividends.

. Major operators will face issues over handset compatibility with their FMC plans, and the same can act as a major hindrance to their FMC rollout strategy. The handset is still perceived as a personal device, rather than a 'company-owned' one. Therefore, service providers should consider partnering with multiple vendors for compatible handsets, rather than taking a white-label approach, and offering integration capability with existing end user devices.

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