The acronym, FMC (Fixed Mobile Convergence) is being thrown around a lot lately. It is the predicted technology bundling strategy that consistently points to fixed wire-line merging with mobile wireless. The combination is an inevitable surety as consumers continually look for ways to connect to content from any device, while doing it with the simplest access possible. This is what service providers who offer traditional wire-line broadband must contemplate for future revenue growth while staying consumer competitive and relevant.
Integrated Service Provider
An Integrated Service Provider offers both fixed wire-line service with a mobile wireless service to customers thereby combining the technologies for the most economical and competitive customer experience. Historically this has not been the case, and is only now beginning to surface as key industry players like Verizon (NYSE: VZ), AT&T (NYSE: T), and now the cable industry are seeing the benefits of integration and bundling to capture demand in the convergence of both mobile and wire-line broadband strategies. Recently, the cable industry and Verizon concocted a vision to marry fixed wire-line and mobile wireless strategies to provide the growing demand for content on any device. This proposed marriage has yet to be solidified. Telecom providers have been using convergence of fixed wire-line and mobile wireless technology bundling for years but need cable’s fast broadband, content, and reach to solidify synergies.
Bundling Dynamics: Key factor in Integration
The advent of mobile-wireless solutions to content delivery through IPTV has generated a demand that continues to grow exponentially, extricating the traditional TV platform as the only equation, and moving to broadband, mobile, and wireless access. This phenomenon is not only seen as a content viewing platform but as an application based and social media integration platform as well. The bottom line indicates that if service providers, whether they are cable, satellite, or IP delivered, must have a mobile-wireless plan to address potential revenues opportunities and cost saving advantages. The benefits of integration for service providers are depicted eloquently by Cisco (NASDAQ: CSCO) in a white paper on Fixed/Mobile Convergence.
Generating revenues from future applications associated with a fixed wire-line/mobile-wireless integration cannot be under-estimated as potentially lucrative from a consumer and business demand metric. In addition, cost savings from having an off-load solution for spectrum use are seen as providing another catalyst for complete integration of the Fixed-Mobile Convergent model. If current triple-play providers move to a quad-play and quad-play plus scenario, potential for success as a competitive bundler of services will out-strip those companies who lag behind the technology curve. It is a must for providers to quickly and responsibly add mobile to the mix.
Cisco sees the convergence model as a platform where Devices – connect across Content, Services, and Applications; then across networks – Cable/DSL, WiMAX, WI-Fi, RFID; to Femto Cell, Satellite, Enterprise, and 2G-4G. The combination is designed to give the consumer the advantages of cross-connectedness which implies the demand generated as convergent technologies continue to merge. It is an irreversible force which must be reconciled by services providers wanting a continued relevance in an increasingly connected world across all devices.
Image courtesy of Cisco