Abstract
In this report, Senior Analysts Carrie Pawsey and Angel Dobardziev analyse the
opportunity for mobile operators' fixed-to-mobile substitution (FMS)
strategies. In order to be successful, mobile operators need to understand the
user perspective, recognise the competitive threat from fixed operators'
fixed-mobile convergence (FMC) initiatives and apply best practices from FMS
services and tariffs currently available in the market.
Arun Sarin, CEO of Vodafone, was quoted at the 3GSM Congress in Barcelona in
February 2006, as saying that fixed-to-mobile substitution (FMS) 'is a massive
opportunity' for Vodafone. At the same event, T-Mobile's CEO Rene Obermann was
quoted as saying 'future growth will come from... fixed line substitution', as
well as suggesting that 'mobile will progressively become the primary personal
access to the Internet'. These two statements from two European market leaders
are indicative of the mobile operator's appetite to tak.
Up until the last couple of years, mobile operators could afford to benefit
from FMS largely in a passive way, as the declining mobile prices in
combination with the convenience of mobile have attracted traffic and
subscribers. However, today mobile operators are taking an increasingly
proactive role in promoting FMS, as a way to grow their ARPUs, to compensate
for the slow growth in premium data services and to justify their 3G
investments, but also to counter fixed operators' FMC strategies.
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