Fixed-Mobile Convergence Called Disruptive

The convergence of fixed and wireless voice and data access is "seismic shift" for the telecom industry and users alike, a study released Wednesday by Yankee Group claims. However, the report's author says that even the telecom operators that are leading the fixed-mobile convergence (FMC) charge probably won't get it right at first.

In a typical fixed-mobile convergence scenario, subscribers can use the same phone for both cellular and landline voice-over-IP access and switch seamlessly between the two. It's eventually going to be big stuff, but it will be a while before landline and cellular operators as well as infrastructure and phone vendors get it right, according to Philip Marshall, a Yankee Group vice president for wireless and mobile technologies.

"Fixed-mobile convergence has clearly emerged as a disruptive trend affecting communication business models, the distribution of content and the development of advanced new service offerings," Marshall said in a statement. "Most FMC solutions will fail--and those that cannot transform their fundamental business models to embrace disruption will be the victims."

In an interview, Marshall added that the first batch of FMC initiatives, such as the widely-discussed one by U.K. telecom giant BT, may not work.

"BT's initiative is flawed," Marshall said. "It's trying to institute a legacy business model without creative massive change in terms of what they're doing." In particular, Marshall said BT is trying to subsidize the service to make it more attractive to consumers, but that can't overcome the fact that few devices are available that can handle both types of calling."The converged services need to be creating adequate value to the subscriber and we're not seeing that yet, at least not combined with a positive business case," Marshall said.

Another problem, Marshall said, is that the traditional telecom operators don't yet understand their competition.

"The telcos underestimate the new players, the Skypes of the world," Marshall said. "Those new players think of FMC more from a distribution standpoint and aren't encumbered by a lot of legacy issues."