Technology Assessment: FMC

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Technology Assessment FMC Fixed Mobile
Convergence

• DeLynn Bettencourt delynnb_at_gmail.com
• Kevin Cheng - kkwcheng_at_gmail.com
• Yuval Elshtein elshtein_at_haas.berkeley.edu
• Qintao Zhang - qtzhang_at_berkeley.edu

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Overview

• Trends in Spectrum
• Fixed Mobile Convergence Technology
• Industry Overview
• Proponents of technology
• Industry reaction
• Strategic considerations

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Spectrum trends
Source Federal Communications Commission
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FMC
Source Cisco
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Multi-Mode Mobile Device
Diagram of Multi-mode Mobile Device Usage

• Home (Wi-Fi or local wireline provider)

USER
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Multi-Mode Mobile Device
Diagram of Multi-mode Mobile Device Usage
?

• Home (wi-fi or local wireline provider)

USER
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The Promise of FMC

• Single phone and phone number for all locations
• Able to choose the lowest rate and SEAMLESSLY
  transfer calls to take advantage of it
• Have decent cell reception indoors

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Multi-Mode Mobile Device
Examples of Multi-mode Phones
Motorola CN620 dual-mode phone (not pictured) -
roam between cellular and 802.11 networks Works
with about 75 per cent of access points from
Avaya and Proxim Corp.

• Gigaset SL75 WLAN VoIP cordless telephone for the
  home or office

UTStarCom F1000 WIFI VOIP Phone
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Industry Overview
Average Monthly Household Telecommunications
Expenditures By Type of Provider
Average Monthly Household Telecommunications Expenditures Average Monthly Household Telecommunications Expenditures Average Monthly Household Telecommunications Expenditures Average Monthly Household Telecommunications Expenditures
By Type of Provider
Year Local Exchange Long Distance Total Wireless Provider Total
1995 30.00 21.00 51.00 7.00 58.00
2003 37.00 10.00 47.00 41.00 88.00

Source Calculated by FCCIndustry Analysis and Technology Division staff using survey data from TNS Telecoms Source Calculated by FCCIndustry Analysis and Technology Division staff using survey data from TNS Telecoms Source Calculated by FCCIndustry Analysis and Technology Division staff using survey data from TNS Telecoms Source Calculated by FCCIndustry Analysis and Technology Division staff using survey data from TNS Telecoms Source Calculated by FCCIndustry Analysis and Technology Division staff using survey data from TNS Telecoms Source Calculated by FCCIndustry Analysis and Technology Division staff using survey data from TNS Telecoms
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Industry Overview
Top US Wireless Network Operators
Top US Wireline Network Operators
Company Name Annual Sales (2004) Venture of
Cingular Wireless 19.4 B BellSouth (wireline) and SBC Communications (wireline)
Verizon Wireless 27.6 B Verizon (wireline) and Vodafone (UK wireless)
Sprint/Nextel 27.4 B Sprint (US Wireless) and Nextel (US Wireless)
T-Mobile 9.3 B Deutsche Telekom (German Wireline)
Company Name Annual Sales (2004)
Verizon 71.2 B
ATT2 30.5 B
Sprint/Nextel 27.4 B
MCI 20.6 B

Top Cable and Satellite Companies (Ranked By
Sales)
Company Name Annual Sales (2004) Number of customers
Comcast Cable 19.3 B 21.5 million - 7 million broadband customers
Directv 11.4 B 14 million
Time Warner Cable 8.4 B 10.9 million 4.1 million broadband customers Partnered with MCI and Sprint in order to offer Digital Phone, a VoIP telephony service
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Pushing FMC

• Handset Manufacturers

Company Name Annual Sales (2004)
Nokia 39,6B
Motorola 31,3 B
Samsung 9,2 B
Siemens 93,4 B
Sony Ericsson Mobile 8,9 B

• Fairly inexpensive to add Wi-Fi capability to a
  handset,
• FMC is a truly disruptive technology that
  provides both
• cost savings and convenience to the customer

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Affected players

• Wireline
• Usually the ones who supply high speed Internet
  access to businesses
• Interface to wired service while at home
• Cellular Service Providers
• Reduce customer churn
• Cingular, Verizon, and Sprint/Nextel are
  reselling access to a 3,300 hotspot network
  operated by Wayport, Inc.

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Affected players

• VoIP
• Skype, a major VoIP provider, will have its
  service installed on the i-mate PDA
• VoIP pureplays will need strategic partnerships
  to ensure they remain in the FMC network
• Handset Manufacturers
• Should partner with service providers to ensure
  rollout of FMC -
• Avaya To Resell Dual-mode Motorola Handset For
  Cellular, WLAN Networks

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Affected players

• Handset OS
• Meanwhile, Microsoft is
• partnering with Sleipner-Calypso
• to provide seamless transfer
• capability using software
• Kineto Wireless, has joined the Symbian Platinum
  Partner program and will port the Kineto UMA
  Client Software to the Symbian OS platform

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Strategy Issues

• System Effects
• FMC relies on the interworking of several
  components the handset, the cellular network,
  the VoIP technology, the WIFI network, among
  others
• Lock-in
• Providing partial call rollover (transition only
  to authorized networks) might be employed by
  incumbent cellular carriers
• Network Effects?

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Strategy Issues

• Standards
• 802.11x
• Seamless transition standards are crucial
• Kineto wireless ( a startup supplier of
  convergence hardware ) was able to sign up most
  of the major vendors to the UMA (unlicensed
  mobile access) standard, eventually becoming 3GPP
  (3rd Generation Partnership Program)

British Telecom Cingular Ericsson Motorola
Nokia Nortel Networks O2 Research in Motion
Rogers Wireless Siemens Sony Ericsson
T-Mobile US
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Questions?

• FMC Fixed/Mobile Convergence (also called WCC -
  Wifi/Cellular convergence
• And Cell-Fi)AP - Wifi access pointIP PBXs
  Digital PBX system that uses VOIPWi-Fi WLANs  -
  inside the office, wireless phones that use the
  office WLAN VoWLAN Combination of IP PBX and
  WLAN to have an in-office portable phone (also
  called Voice Over Wi-Fi)
• Wireline networks - Use wires and cables to
  connect customers premises to central offices
  maintained by telecommunications companies.
• Wireless networks - Operate through the
  transmission of signals over networks of radio
  towers.
• WiMAX World Interoperability for Microwave
  Access, also known as IEEE 802.16 is an
  emerging global broadband wireless standard
• LEC Local Exchange Carriers. Wireline service
  providers that connect a voice call locally
• VOIP Voice over IP. Voice communications are
  normally split up and reassembled by
  telecommunications companies switching and
  routing equipment. Voice over Internet Protocol
  splits up the conversation into packets in the
  telephone, transmitting the conversation over the
  Internet.