Reuters says FMC “years off”

Reuters ran a story today from the FMC World Congress in Amsterdam.
The article cites very weak consumer uptake leading to the cancellation of T-Mobile’s T-One service in Germany, and weak uptake also at Neuf Cegetel. It seems strangely unbalanced, since it doesn’t mention T-Mobile’s imminent national rollout of FMC in the USA, the BT/Vodafone Fusion service and the FT/Orange Unik service. There are several other UMA deployments that would have made the outlook seem less gloomy.
The T-Mobile service was survived in Germany by T-Com’s similar service, Telekom-Vorteil, a “fixed/Wi-Fi” service that routes wireline calls over Wi-Fi, so you can use a Wi-Fi phone or the Wi-Fi of your dual mode phone to pick up calls on your home number when you are at home. This is not UMA based, and drops the call when you move out of Wi-Fi range. People like it.


Today’s Wall Street Journal has a good article about T-Mobile’s UMA trial in Seattle. It says that T-Mobile may be rolling it out nationally as early as next month, despite some trial particpants’ complaints about handoff and battery life issues. T-Mobile will be offering a home router to help with QoS and battery life. I presume that for the battery life this is just WMM Power Save (802.11e APSD) since that is what the phones in the trial (Samsung T709 and Nokia 6136) support. For QoS side I expect these APs will support WMM (802.11e EDCF), but they could also support some proprietary QoS on the WAN access link, the way that the AT&T CallVantage routers do, which would be interesting.

There is some background on the trial here.

The article goes on to put the trial into the context of other FMC deployments, from BT Fusion, Telecom Italia and Orange. The article quotes a Verizon Wireless spokesman saying that they aren’t convinced that Wi-Fi can deliver high enough voice quality to carry Verizon branded calls. This is amusing bearing in mind the usual quality of a cellular call in a residence.

The article also quotes Frank Hanzlik, the head of the Wi-Fi Alliance as saying that business FMC may have more potential than consumer. I agree.

Nokia’s WiMAX “Phone”

Reuters picked up on one little sentence buried in a Nokia press release entitled “Nokia Demonstrates Leadership in Technologies for Internet on Mobile Devices at Web 2.0 Expo.” The relevant paragraph, in its entirety, reads:

“Nokia Shows Commitment to WiMAX as Web 2.0 Enabler

“Nokia is dedicating significant research, development and intellectual property to WiMAX and supports efforts in making it a global broadband standard. The combination of WiMAX broadband technology and Web 2.0 services offers people an enriched high-speed Internet experience free from the desktop PC. Nokia plans to bring its first WiMAX enabled mobile device to market in early 2008.”

With no apparent evidence, the headline of the Reuter’s story mentioned the word “phone,” and the Internet echo chamber commenced to spawn dozens of stories saying that Nokia is going to release a WiMAX phone in 2008. Actually it looks more as though they are talking about an Internet Tablet like their N800, which is much less exciting.

A Nokia phone based on WiMAX would either have to have a regular cellular radio for the voice channel, or it would use WiMAX for voice. A phone that uses WiMAX for voice would most likely be aimed at a wireless Internet provider that doesn’t have a cellular network, for example ClearWire in the USA. This would put a date on their anticipated entry into mobile voice over WiMAX to compete with the incumbent cellular operators.

But that’s not what the press release says.

LG Shine

On the phone front, a review in today’s Journal is the LG “Shine,” This looks like a Razr that slides instead of flips, and with a much bigger screen. The large LCD is a mirror when the phone is idle. This LCD/mirror technology is reminiscent of the Philips Miravision TV, a product that would be a runaway success if they priced it competitively. The Shine is the next step in LG’s project to bring fashion design to cell phones, preceded by the Chocolate and the Prada phones. Judging by the photo in the paper, the Shine is just a regular simple phone – which is exactly what a huge segment of cellphone users want. If it performs this basic function superbly – making clear calls with good reception – it will be a hit. Unfortunately the Journal hints that the fashion trade-off may have gone too far; the trendy metal casing may impair reception of the wireless signal.

DiVitas and enterprise-controlled FMC

Still at VoiceCon, there was a great presentation in a FMC panel by Vivek Khuller of DiVitas Networks. DiVitas has just released a product that rebuts the idea that cellular/Wi-Fi roaming requires participation by a Mobile Network Operator. Cellular companies get the vast bulk of their revenues from consumers, (though business users are more profitable) and have not been motivated to tailor their services to businesses. This offering from DiVitas, and MVNO efforts like Sotto address a gaping need in the market.

Vivek prefaced his presentation by enumerating three big-picture observations.

First, the current crop of FMC devices is actually the second generation – we just didn’t recognize the first generation, which is mobile computers. They are converged devices because they have multiple network connections: POTS (built-in modem), Ethernet, Wi-Fi and possibly a WWAN card from Verizon or Sprint or whoever. Of course the truth of this observation depends on your definition of FMC, but it illuminates the roots of DiVitas’s strategy.

Second, when you start a job at a new company, they give you two things, a phone and a computer. They get both of them through the same type of channel, which is not a service provider.

Third, Skype came out of the blue from the service provider perspective; none of their founders had any voice service provider experience, but Skype is now the biggest voice service provider in the world in subscriber count.

He then launched into his presentation, pointing out that cellular penetration in the consumer space is about 75%, while in the enterprise space it’s only 20%, even though 75% of workers consider mobility “critical” or “important,” and the chances of finding a person at their desk are less than 30%.

He gave the reasons for the lack of penetration of cell phones in the enterprise as cost, control and complexity. On the cost front, he showed us his corporate phone bills – $14K for mobile and $1.4K for wireline. He acknowledged that a lot of his cellular use was lab testing, but felt that the point was still valid – cellular service is actually roughly 10x as expensive as wireline.

On the control front he pointed out that 80% of corporations use a PBX rather than Centrex, and he felt the primary reason was control issues.

On complexity, he pointed out that current solutions require multiple devices and servers – he might easily have added that they also require multiple MNO relationships for companies with international presence.

He went on to identify three major forces of change in the enterprise mobility market that are related to these barriers: first, the massive uptake of Wi-Fi, which reduces costs and increases control; second, the advent of SIP, which together with the availability of a lot of high quality open source code, lowers barriers to entry by leveraging engineering resources and increasing control. Third, the increasing potency of cell phones, with more processing power and connectivity, which he sees as reducing complexity and cost of the overall solution.

He ended up claiming an ROI for his enterprise-based FMC solution of 6 months, which may be hyperbolic, but would remain impressive even if far longer.


Detractors of Fixed Mobile Convergence can’t see the value in being able to walk into your office talking on a cell phone, then pick up your desk phone and seamlessly continue the call. They are right; that’s a small hook on which to hang a massive reworking of the corporate voice network. But that’s not Fixed Mobile Convergence, so it’s a straw-man argument. In Fixed-Mobile Convergence, you walk into your office talking on a cell phone, sit down, and continue the conversation on the same cell phone. The value driver is that you no longer need a desk phone – that’s a big saving.

So now you are wondering where the “convergence” is in this scenario. Isn’t this just FMS – Fixed Mobile Substitution? Yes and no. If the wireless connection remains cellular it is FMS. But the second big value driver comes in if it seamlessly transitions to Wi-Fi or Bluetooth, and stops using cellular minutes. This is FMC. The line between FMC and FMS is quite blurred. FMS has the disadvantage that signal coverage can be weak in some buildings, and if everybody in a densely populated office goes the FMS route, the cell won’t have the capacity to serve them all. But this problem is addressed by an interesting new product category called the femtocell, which is just like a Wi-Fi access point except it runs cellular frequencies and protocols. So if you deploy femtocells in your office you are going the FMS route, if you use the Wi-Fi network instead you are doing FMC. So the FMC scenario requires the phones to be dual mode (cellular plus Wi-Fi). FMS has the advantage that the phones can be cheaper, since they can leave out the Wi-Fi radio.

Another issue is who manages the cell phone. Voice Service Providers for years have been pushing a service called Centrex, which obviates the need for a PBX on the company premises. But most businesses have resisted. They prefer to control their communications infrastructure themselves. This same objection applies to FMS, but not necessarily to FMC. With the enterprise oriented (i.e. non-UMA, non-IMS) flavors of FMC, once the call is on the Wi-Fi network it is just a regular VoIP call on the corporate PBX. This means that it is billed at non-cellular rates (free on internal calls), and it can offer all the regular PBX features.

From a market segment point of view, the Blackberry is the closest thing to an enterprise cell phone that currently exists. But it doesn’t (yet) offer any PBX call features nor does it have Wi-Fi, and it is sold through and controlled by the mobile network operators, so it also fails on the score of not being controlled by the IT department.

Nokia, recognizing these issues, sells their Eseries phones not only through mobile operators but also through interconnects, the same distribution channel as PBXs. Nokia has also endowed their Eseries phones with enterprise-grade manageability (though it is with carrier oriented OMA-DM, rather than the enterprise oriented WBEM). So Nokia’s Eseries strategy still lacks PBX features on the phone. But the Eseries phones run on Symbian’s S60 operating system, for which there is a vibrant developer community, so if there isn’t yet a third-party PBX style client for it, there soon will be.

Another cell phone project taking this approach is OpenMoko. This goes even further than Nokia’s Eseries, since all the software, including the operating system (Linux) is open source.

FMS in the enterprise

Value-conscious consumers are increasingly wondering why they need to pay for two phones, and deciding to save by ditching their wireline phone. This is technically termed FMS – Fixed Mobile Substitution, . Will the same thing happen in the business phone world? There’s a precedent for it. Desktop computers are being routed from offices by mobile PCs. Could desktop phones be displaced by mobile ones in the same way? It has been reported that more than half of calls made from businesses are cellular, so the substitution in usage is well under way already.

There are several objections. The sound quality of cellular conversations is abysmal. The cost per minute is much higher. Business desk phones have all sorts of features that cell phones lack. The form factor of cell phones is inconvenient in some ways – you can’t clamp them to your ear with your shoulder, to free up your hands. Plus cordless phones have been available for PBXs for years, and they have sold very badly.

Almost everybody in business has a cell phone. There is no way that these people are going to abandon their cell phones, but if the technical and usability obstacles are removed, they may see no further need for a desk phone. Cutting this expense has to be attractive to businesses focussed on ROI.