Technology Assessment: FMC – Technology Assessment: FMC – Fixed Mobile ConvergenceFixed Mobile Convergence

DeLynn Bettencourt – delynnb@gmail.comDeLynn Bettencourt – delynnb@gmail.com Kevin Cheng - kkwcheng@gmail.comKevin Cheng - kkwcheng@gmail.com Yuval Elshtein – elshtein@haas.berkeley.eduYuval Elshtein – elshtein@haas.berkeley.edu Qintao Zhang - qtzhang@berkeley.eduQintao Zhang - qtzhang@berkeley.edu

OverviewOverview• Trends in Spectrum

• Fixed Mobile Convergence Technology

• Industry Overview

• Proponents of technology

• Industry reaction

• Strategic considerations

Spectrum trendsSpectrum trends

Source: Federal Communications Commission

FMCFMC

Source: Cisco

Multi-Mode Mobile DeviceMulti-Mode Mobile Device

Home (Wi-Fi or local wireline provider)

Diagram of Multi-mode Mobile Device UsageDiagram of Multi-mode Mobile Device Usage

Airport (Hotspots)

Coffee Shop (Hotspots)

USER

Driving (Cellular Network)

Office (IPBX/WLAN)

Multi-Mode Mobile DeviceMulti-Mode Mobile Device

Home (wi-fi or local wireline provider)

Diagram of Multi-mode Mobile Device UsageDiagram of Multi-mode Mobile Device Usage

Airport (Hotspots)

Coffee Shop (Hotspots)

USER

Driving (Cellular Network)

Office (IPBX/WLAN) ?

The Promise of FMCThe Promise of FMC Single phone and phone number for Single phone and phone number for

all locationsall locations

Able to choose the lowest rate and Able to choose the lowest rate and SEAMLESSLYSEAMLESSLY transfer calls to take transfer calls to take advantage of itadvantage of it

Have decent cell reception indoorsHave decent cell reception indoors

Multi-Mode Mobile DeviceMulti-Mode Mobile Device

Gigaset SL75 WLAN VoIP cordless telephone for

the home or office

Examples of Multi-mode PhonesExamples of Multi-mode Phones

UTStarCom F1000 WIFI VOIP Phone

Motorola CN620 dual-mode phone (not pictured)

- roam between cellular and 802.11 networks

Works with about 75 per cent of access points from Avaya and Proxim Corp.

Industry OverviewIndustry OverviewAverage Monthly Household Telecommunications ExpendituresBy Type of Provider

Average Monthly Household Telecommunications Expenditures

By Type of Provider

Year Local Exchange Long Distance Total Wireless Provider Total

1995 $30.00 $21.00 $51.00 $7.00 $58.00

2003 $37.00 $10.00 $47.00 $41.00 $88.00

Source: Calculated by FCCIndustry Analysis and Technology Division staff using survey data from TNS Telecoms

Industry OverviewIndustry OverviewTop US Wireline Network OperatorsCompany

NameAnnual Sales

(2004)

Verizon 71.2 B$

AT&T[2] 30.5 B$

Sprint/Nextel 27.4 B$

MCI 20.6 B$

Top US Wireless Network Operators Company

NameAnnual Sales

(2004) Venture of

Cingular Wireless

19.4 B$ BellSouth (wireline) and SBC Communications (wireline)

Verizon Wireless

27.6 B$ Verizon (wireline) and Vodafone (UK wireless)

Sprint/Nextel 27.4 B$ Sprint (US Wireless) and Nextel (US Wireless)

T-Mobile 9.3 B$ Deutsche Telekom (German Wireline)

Company Name

Annual Sales (2004)

Number of customers

Comcast Cable

19.3 B$ 21.5 million - 7 million broadband customers

Directv 11.4 B$ 14 million

Time Warner Cable

8.4 B$ 10.9 million – 4.1 million broadband

customers

Partnered with MCI and Sprint in order to offer Digital Phone, a VoIP telephony service

Top Cable and Satellite Companies (Ranked By Sales)

Pushing FMCPushing FMC

Company Name Annual Sales (2004)

Nokia 39,6B$

Motorola 31,3 B$

Samsung 9,2 B$

Siemens 93,4 B$

Sony Ericsson Mobile 8,9 B$

• Fairly inexpensive to add Wi-Fi capability to a handset, •FMC is a truly disruptive technology that provides both

cost savings and convenience to the customer

Handset ManufacturersHandset Manufacturers

Affected playersAffected players WirelineWireline

• Usually the ones who supply high speed Usually the ones who supply high speed Internet access to businessesInternet access to businesses

• Interface to wired service while at homeInterface to wired service while at home

Cellular Service ProvidersCellular Service Providers• Reduce customer churnReduce customer churn• Cingular, Verizon, and Sprint/Nextel are Cingular, Verizon, and Sprint/Nextel are

reselling access to a 3,300+ hotspot network reselling access to a 3,300+ hotspot network operated by Wayport, Inc.operated by Wayport, Inc.

Affected playersAffected players VoIPVoIP

• Skype, a major VoIP provider, will have its Skype, a major VoIP provider, will have its service installed on the i-mate PDAservice installed on the i-mate PDA

• VoIP pureplays will need strategic partnerships VoIP pureplays will need strategic partnerships to ensure they remain in the FMC networkto ensure they remain in the FMC network

Handset ManufacturersHandset Manufacturers• Should partner with service providers to Should partner with service providers to

ensure rollout of FMC - ensure rollout of FMC - ““Avaya To Resell Dual-mode Motorola Handset Avaya To Resell Dual-mode Motorola Handset

For Cellular, WLAN Networks”For Cellular, WLAN Networks”

Affected playersAffected players Handset OSHandset OS

• Meanwhile, Microsoft is Meanwhile, Microsoft is partnering with Sleipner-Calypso partnering with Sleipner-Calypso to provide seamless transfer to provide seamless transfer capability using softwarecapability using software

• ““Kineto Wireless, has joined the Symbian Kineto Wireless, has joined the Symbian Platinum Partner program and will port the Platinum Partner program and will port the Kineto UMA Client Software to the Symbian OS Kineto UMA Client Software to the Symbian OS platformplatform””

Strategy IssuesStrategy Issues System Effects:System Effects:

• FMC relies on the interworking of several FMC relies on the interworking of several components: the handset, the cellular components: the handset, the cellular network, the VoIP technology, the WIFI network, the VoIP technology, the WIFI network, among othersnetwork, among others

Lock-inLock-in• Providing partial call rollover (transition Providing partial call rollover (transition

only to authorized networks) might be only to authorized networks) might be employed by incumbent cellular carriersemployed by incumbent cellular carriers

Network Effects?Network Effects?

Strategy IssuesStrategy Issues StandardsStandards

• 802.11x802.11x• Seamless transition standards are crucialSeamless transition standards are crucial• Kineto wireless ( a startup supplier of Kineto wireless ( a startup supplier of

convergence hardware ) was able to sign up convergence hardware ) was able to sign up most of the major vendors to the UMA most of the major vendors to the UMA (unlicensed mobile access) standard, (unlicensed mobile access) standard, eventually becoming eventually becoming 3GPP (3rd Generation 3GPP (3rd Generation Partnership Program)Partnership Program)

British Telecom Cingular Ericsson Motorola Nokia Nortel Networks O2 Research in Motion Rogers Wireless Siemens Sony Ericsson T-Mobile US

Questions?Questions? FMCFMC – Fixed/Mobile Convergence (also called WCC - Wifi/Cellular – Fixed/Mobile Convergence (also called WCC - Wifi/Cellular

convergenceconvergence And Cell-Fi)And Cell-Fi)

APAP - Wifi access point - Wifi access pointIP PBXIP PBXs – Digital PBX system that uses VOIPs – Digital PBX system that uses VOIPWi-Fi WLANWi-Fi WLANs  - inside the office, wireless phones that use the office WLAN s  - inside the office, wireless phones that use the office WLAN VoWLANVoWLAN – Combination of IP PBX and WLAN to have an in-office portable – Combination of IP PBX and WLAN to have an in-office portable phone (also called Voice Over Wi-Fi)phone (also called Voice Over Wi-Fi)

Wireline networksWireline networks - Use wires and cables to connect customers’ - Use wires and cables to connect customers’ premises to central offices maintained by telecommunications companies. premises to central offices maintained by telecommunications companies.

Wireless networksWireless networks - Operate through the transmission of signals over - Operate through the transmission of signals over networks of radio towers.networks of radio towers.

WiMAX WiMAX — World Interoperability for Microwave Access, also known as IEEE — World Interoperability for Microwave Access, also known as IEEE 802.16 — is an emerging global broadband wireless standard802.16 — is an emerging global broadband wireless standard

LECLEC – Local Exchange Carriers. Wireline service providers that connect a – Local Exchange Carriers. Wireline service providers that connect a voice call locallyvoice call locally

VOIPVOIP – Voice over IP. Voice communications are normally split up and – Voice over IP. Voice communications are normally split up and reassembled by telecommunications companies’ switching and routing reassembled by telecommunications companies’ switching and routing equipment. Voice over Internet Protocol splits up the conversation into equipment. Voice over Internet Protocol splits up the conversation into packets in the telephone, transmitting the conversation over the Internet.packets in the telephone, transmitting the conversation over the Internet.