fixed mobile convergence
… but can operators answer the call?
Focus on technical problems may mean that as the FMC boat leaves the harbour, mobile operators may not be on it. Stewart Baines investigates.
Few observers could doubt that fixed-mobile convergence is preoccupying European telcos’ management teams. From product development to strategic alignment, FMC is on everyone’s minds. Despite disappointing sales, BT dominates the headlines with the widely publicised Fusion; France Telecom has restructured its group businesses including Orange and Equant, into Orange for consumers and Orange Business Services for businesses; Telecom Italia, Deutsche Telekom, TeliaSonera and every incumbent worth their salt has committed to advanced orders for dual mode handsets; Vodafone, once fiercely mobile only, has launched carrier pre-select and DSL in the UK, and in Germany is believed to be integrating its standalone fixed line business Arcor into the corporate fabric. The list of device and service convergence is virtually endless.
But it appears that business customers are losing out. So far, most product development and service launches that can be strictly called fixed-mobile convergence are consumer focused. Yet businesses are the one most affected by the costly fixed-to-mobile substitution and would welcome a product that could boost productivity while slashing costs. It is estimated that 70% of mobile calls made by business users are made when within range of a fixed alternative.
“It is a surprise that there are so few business FMC services on the market or even announced because its such an opportunity,” admits Ryan Jarvis, chair of the Fixed Mobile Convergence Alliance (FMCA) and chief executive of Macropolitan. “CFOs are desperate to cut costs while improving productivity.”
BT is expected to be first to market with an enterprise-grade FMC service, but even the UK operator has had to set launch back to 2007 because of handset and PBX interoperability problems. Other operators are no nearer a solution to solving the problem of dual-mode handsets suitable for enterprise use.
The problem lies with SIP. Most FMC products are UMA-based. While Unlicensed Mobile Access (UMA) can use either Bluetooth or WiFi as the wireless connectivity, calls must trombone back into the mobile network as it is the mobile home location register (HLR) that controls the signalling and authentication. However most large businesses either have adopted, or plan to adopt, voice/data convergence, where voice is run over the company LAN & WAN and is consequently toll free. The business case for voice/data convergence is predicated on sharing the network infrastructure. If voice is removed from the equation, the figures won’t add up.
SIP interoperability
“Until now, there hasn’t been a standard way of implementing SIP for handover between cellular and WiFi,” admits Jarvis. “SIP does handover but not in a standards based way. That’s why at the FMCA we have been working on standardising the SIP specifications that we require for convergence services.”
Without the FMCA’s plan to standardise the SIP requirement, every handset vendor would have to provide specific interoperability with every IP-PBX vendor.
The problem with SIP is that no two IP-PBX vendors have implemented it in the same way. Some aren’t even using SIP. Basic SIP functionality such as call forward or short code dialling is common from one IP-PBX to another. But more complex functions, the type that enterprises routinely expect from their phone systems such as hunt groups, will vary from one switch to another.
Some companies could purchase handsets with specific PBX vendor support. But over half of all enterprises have IP-PBXs from multiple vendors. The implication is that workers travelling to another site, maybe internationally, will not get the fixed benefits of FMC but will be roaming on a mobile network despite being in range of a company WiFi access point.
“Customers are looking for simplicity, they really don’t need to worry whether dual mode handsets will work with their switches,” explains Gerard Bruen, director enterprise voice solutions, Nokia. “As an industry we must ensure that we unify the front end so that there is back end connectivity.” Nokia has incorporated support for both Avaya and Cisco switches in its dual-mode phones, but to support all PBXs in one device is too much to ask.
Other challenges exist for those early adopters that choose to implement GSM/SIP handsets. SIP will be borne by WiFi, and although there are no significant interoperability problems with WiFi equipment from different vendors, WiFi is not ideal for telephony.
“Many offices now have 11b and 11g coverage throughout the office but few will have thought of stairwells, doorways and canteen. These are not the places where you would use you laptop but you might well use your phone,” explains Bruen. “That’s why doing a site survey will be really important.”
Another challenge is the lack of live handover between WiFi access points. This is another task for the industry to resolve. Nokia’s Series 60 handsets do have WiFi and GSM alongside each other but there is no in-call handover between technologies. “From our point of view, businesses can do FMC now. We have handsets with WiFi alongside GSM but handover is admittedly ‘assisted’,” admits Bruen.
The issue of live handover between mobile and wireless, and between one access point and another, will continue to be debated. One survey says businesses are not concerned with live handover; another contradicts these findings. The industry, generally believes live handover is the holy grail and is throwing considerable resources to solve the dual-mode handset issue.
“The best brains of our generation are investigating multiple radio capabilities in handsets that can do multiple access handover to solve a relatively straight forward problem that could be solved in other ways,” comments Jeremy Green, Principal Analyst, Enterprise Mobility, Ovum.
Last chance saloon?
Has the horse bolted for enterprise FMC? It’s perhaps a little strong to suggest the opportunity has gone, but delay after delay is sending the wrong messages out enterprises. Enterprises consistently state that their mobile costs are too high. The demand for converged fixed/mobile is there if operators prove they can cut overall costs. Instead, mobile operators are capitalizing on enterprise fixed-mobile substitution services with the promise that costs will be cut, but the productivity gains of using a single device and number, are kept.
The most compelling mobile substitution services are ‘home-zoning’ where customers receive cheaper or flat rate pricing for voice or data services in a predefined cell. These have proved extremely popular in Germany and are now finding their way to Spain. Pioneered by O2 Genion, Vodafone and T-Mobile have joined the party. Initially these services targeted residential users with a simple handset substitution, but gradually home zone pricing is being extended to business users. The most recent ‘me too’ launch from Vodafone Germany sets the home zone as within 2km of a predefined cell so this could appeal to larger business with bigger sites. It may not replace the fixed line, but it could be a cost-effective compliment.
Mobile operators are getting into PBX replacement services too. O2 Germany’s Portable Office offers home zone tariffing, mobile VPN for flat rate calls to other company mobiles and a range of PBX-like call control. Vodafone’s Wireless Office is also an attractive substitution services and intended for small to medium sized businesses.
All the major mobile operators offer packages for discounted rates for mobile-mobile, fixed-mobile and mobile-fixed calls between company phones. These services will appeal to businesses with little ambition to control their own telephony infrastructure, but so far uptake has been a little muted.
Mobile office
Mobile operators have always been keen to appease their largest and best customers. It’s not unknown for them to install a GSM base station on or near a prime customer’s premise so that call quality can be assured. It may cost €50,000, but the contract could generate hundreds of thousands of euros a month. But this option has only been in place for the largest of customers and did not deliver cheaper calls. Only better coverage.
In Sweden, an innovative MVNO is moving this model on to medium sized businesses. Spring Mobil kits out a customer site with a micro base station and backhauls the traffic to its mobile switching centre via a DSL line. Spring is a licensed mobile operator, but can only provide lower power services, so outside of the office zone, users roam onto TeliaSonera’s GSM network paying standard mobile rates. Within the office zone, calls to other employees are free and all other calls are rated at a price competitive with fixed lines.
This is a full access-substitution: the businesses are encouraged to throw away the PBX and go mobile. In return, Spring offers PBX functionality like hunt groups and call divert. So far, customer numbers rank in the hundreds.
This is not a quirky Scandinavian phenomenon. Micro base stations are making their way to the UK too. Ofcom, the UK’s regulator, recently sold off new GSM spectrum. Placed in between the DECT and existing GSM bands, it was left free to prevent interference between the two interfaces. Now 12 operators have won licenses, paying from £50,000 to £1.5 million to use this spectrum. It is a free for all band with no apportioning, and there are no use it, or lose it stipulations. The only insistence is that it must be for low powered use such as within a building. License winners include C&W, Pipex, Colt and Spring Mobil.
The only problem with this model is capacity. According to analysts, current micro base stations can only support a handful of simultaneous calls. While plans are to increase this, it does show the limitation to low powered services. If low-powered GSM services become popular, site planning will become critical and complex.
Inevitable convergence
Ultimately, convergence is inevitable even if home zoning, wireless offices and micro base stations encourage further substitution. “The list of mobile-only operators is growing very thin. Most of those that have operated at arms length within an integrated carrier are now being properly integrated,” says FMCA’s Jarvis.
Sandy Aitken, partner in IBM Consulting’s global telecoms industry practice, believes that convergence is inevitable, despite the short term attraction of mobile-only services.
“IMS is going to bring convergence at the network level. Within 24-36 months, you will see one network supporting fixed and mobile devices. Speed of rollout depends on the availability of skilled staff, but its going to happen and when it does the distinction between fixed and mobile will go.” According to Aitken, its cost cutting from the operators’ perspective driving IMS adoption,
“Operators need to drive out costs and improve the re-use of common capabilities while getting away from legacy networks. As a consequence, you’ll get all these new convergence services. The amount of change the industry is going to go through is massively under estimated.”
So there we have it, convergence will be a supply led initiative. Fixed mobile substitution will continue to gather pace in the short to medium term but ultimately, the availability of GSM spectrum will put limits to growth. Short range wireless, either UMA, WiFi or low powered GSM, will be needed to support the demand for increased volume and duration of voice calls. But will this be fixed or mobile? No-one cares as long as cost come down.
“People are fundamentally lazy so they will keep using their mobile when there is a cheaper fixed alternative,” says Aitken. “But bosses will remove the choice for them. If they can save significant amounts of money convergence will really take off. And why should I care? As long as the call quality is good and it doesn’t affect my ability to work.”