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Convergence not always the answer

By Georgina Tang, ZDNet Asia on June 20, 2007

Summary

It could be more cost effective for Asian operators to introduce different services for fixed-line and mobile subscribers, say industry players.

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SINGAPORE--Operators and service providers may choose to continue rolling out separate services for fixed-line and mobile subscribers, instead of offering fixed-mobile convergence (FMC) services.

Speaking at a CommunciAsia panel discussion Tuesday, Don Rae, chief operations advisor of Philippine mobile operator Smart Communications, said this divergence from a FMC strategy is spurred by the need for operators to be cost-effective. While operators want to deliver broadband services such as Digital Subscriber Line (DSL) over fixed lines, they also want to take advantage of falling mobile infrastructure costs to deliver more affordable mobile voice services, Rae said.

Following this strategy, delivering mobile broadband services is sometimes used as a tool to test the market's reception to broadband services, he said. Rae said: "We use wireless technology such as 3G base stations as a market finder, sometimes, to lay [fixed-line] infrastructure later.

Commenting on convergence, Rae said it is "an all-purpose word" which could refer to anything from bringing together the physical backhaul services to reduce infrastructure costs, to the bundling of fixed and mobile service offerings.

Such mobile bundle offers include free minutes over a fixed-line voice service, a mobile service and broadband streaming over mobile devices, he said. However, he noted, true integration via a shared infrastructure and dual-mode phones that can switch between fixed-line and mobile base stations, still needs to be worked out.

Fellow panelist Zamzamzairani Mohd Isa, CEO of Malaysia Business at Telecom Malaysia, said: "Creating synergy between Celcom (the mobile arm of Telecom Malaysia) and the fixed provision service is a challenge."

Noting the current infrastructure limitations, Zamzamzairani said: "We need a strong backbone and a next-generation network platform." This includes IP Multimedia Subsystem (IMS), an architectural framework that uses a common horizontal control layer to aid the access of multimedia applications--including voice and video--across wireless and wireline terminals.

Zamzamzairani said FMC will take off in three years' time, after the technology matures and costs fall.

Rae said: "The price disparity is an accident of history. Operators should move toward a bucket-type pricing, giving one price for the same service. It doesn't matter where you are calling from."

"Bandwidth is bandwidth, regardless where it is coming from," he added, pointing out that all customers care about is the service.

However, fixed and mobile services occupy different places in users' minds. A mobile service is more personal, while a fixed line is more functional. That means operators will struggle to effectively market an FMC-type service, Rae noted.

Georgina Tang is a freelance IT journalist based in Singapore.

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