Fixed-Mobile Convergence: opportunities and strategies for the mass market

Table of Contents

• 0 Summary
• 1 Fixed--mobile substitution raises the stakes in the battle for customer ownership
  • 1.1 Mobile services are taking an ever greater share of telecoms spend
  • 1.2 Fixed and mobile operators are targeting the same markets in pursuit of growth
  • 1.3 Some operators are responding to (and pre-empting) fixed-mobile substitution with convergence strategies
• 2 Technological advances are paving the way for fixed--mobile convergence but customer demand remains uncertain
  • 2.1 FMC standards are emerging but the lack of converged handsets is delaying roll-out of services
  • 2.2 Many of the potential demand-side drivers for FMC remain unproven
• 3 Fixed-only operators are driving current fixed--mobile convergence initiatives
  • 3.1 FMS poses the biggest threat to operators with substantial circuit-switched telephony revenues
  • 3.2 FMC encourages call substitution but could protect subscription revenues
  • 3.3 Lessons can be learned from BT Fusion, the first seamless residential FMC service on the market
  • 3.4 Fast-moving altnets are starting to differentiate themselves with FMC services (and are being snapped up)
  • 3.5 Altnets are partnering in mobility to differentiate their services and gain market share
  • 3.6 Broadband voice services provide a strong base for the launch of FMC services
  • 3.7 The opportunities for most fixed-only players far outweigh the threats, if they can obtain leverage in the mobile value chain
• 4 Integrated operators are in pole position to deliver fixed--mobile convergence but must watch margins
  • 4.1 Mobile is being redefined as personalised mobility services and bundled with broadband in the quest for future growth
  • 4.2 CPE is also evolving to capitalise on growth in non-voice services
  • 4.3 Integrated operators have to segment their market to minimise margin erosion
  • 4.4 Competitive pressures will dictate when integrated operators introduce converged services
• 5 Mobile operators could go-it-alone, but will need to effectively address the broadband market
  • 5.1 Cellular-only FMS strategies fit well with 3G plans but lack an adequate solution for Internet access
  • 5.2 Mobile-only players are currently active in FMC through partnerships but increased interest in broadband could spur deeper involvement
  • 5.3 Mobile operators may use FMC as a complementary strategy to FMS
• 6 Fixed--mobile convergence may act as a catalyst for wider industry transformation
  • 6.1 Fixed--mobile convergence will drive service providers to take a greater role in the provision of end-user devices
  • 6.2 Ownership of infrastructure improves the bottom line for FMC
  • 6.3 Customer service will be key in a world of seamless networks
  • 6.4 Integrated operators are best positioned to take advantage of the new landscape but have many challenges to overcome
  • 6.5 FMC is likely to spur consolidation of smaller players exposed by a lack of broadband or mobile services
• 7 Our forecasts show that fixed--mobile convergence services will be adopted by 16% of broadband households by 2010
  • 7.1 The French market is the most promising for long-term FMC adoption, followed by Italy and Germany
  • 7.2 Adoption of FMC services is closely aligned with broadband penetration among the mobile subscriber base
  • 7.3 FMC services are unlikely to achieve significant penetration of the addressable market until 2007

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List of Figures and Tables

• Figure 4.1: An illustration of the home gateway as the centrepiece of residential convergence strategies
• Figure 7.1: Number of households with broadband and mobile subscription(s) in Western Europe, 2005--2010
• Figure 7.2: Western European FMC subscriber households as a subset of households with broadband and mobile subscriptions
• Figure 7.3: Individual subscribers associated with FMC services
• Figure 7.4: Dual-mode FMC handset sales in Western Europe, 2005-2010
• Table 2.1: Network architectures for dual-mode FMC services
• Table 3.1: Dual-mode FMC initiatives by fixed-only operators
• Table 3.2: BT Fusion service characteristics
• Table 3.3: Service characteristics of freenet.des iP1
• Table 3.4: Opportunities and threats for fixed-only operators
• Table 4.1: Mass-market dual-mode FMC initiatives (actual or planned) from integrated operators
• Table 4.2: France Telecoms residential FMC services (includes bundled services)
• Table 4.3: Opportunities and threats for integrated operators
• Table 5.1: O2 Germanys KPIs in comparison to market average at March 2005
• Table 5.2: Service characteristics of Vodafone D2s Zuhause portfolio
• Table 5.3: Opportunities and threats in dual-mode FMC for mobile-only operators
• Table 6.1: Positioning of service providers for FMC
• Table 7.1: Market prospects for FMC services in Western Europe