An excellent blog posting by Alan Quayle discusses the reasons for the failure of FMC services from Korea Telecom and Deutsche Telkom, and the relative success of Orange’s Unik.
The critical lessons are: keep the service as transparent as possible with respect to user experience; keep the saving as simple to understand and as significant as possible for the customer.
Quayle thinks that FMC will come in the form of femtocells bundled into single boxes from converged consumer service providers like Verizon. His comments are spot-on, for example concerning who benefits from network off-load:
Femtocell enables mobile broadband traffic to be off-loaded in the home and office, this is an important benefit for the operator not the customer.
Quayle mentions “and office,” but while Wi-Fi FMC seems to compare unfavorably to femtocells for consumers, the picture for offices is more ambiguous. Businesses that want PBX features on their phones have two choices when it comes to FMC. They can keep their PBX and extend its features to the mobile phones, or they can use a Centrex/hosted PBX service from their mobile provider. In both cases, particularly the first, dual-mode phones will be preferable to femtocells for many customers.
There are several reasons for this. First, Wi-Fi in cell phones is becoming common – IDC predicts that by 2011 30% of phones sold will be smart phones, and Wi-Fi is fast becoming a must-have feature in smart phones. Second, handset Wi-Fi technology is improving, particularly battery life. Third, Wi-Fi coverage good enough to support voice is becoming more common in businesses. Fourth, many companies prefer to maintain control over their internal voice networks and network client devices. Put these together, and the motivation to spend on femtocells is weak.