Understanding obstacles to convergence

Convergence is a nirvana, we hear. Business people all want one handset, one number and one inbox for all their voice and data communications. And apparently they want to combine their home and office communications when necessary. But is that really true?

"Convergence is only nirvana from an operator's point of view," says Dean Bubley of Disruptive Analysis. He's sat through so many vendor presentations that start from this sort of assumption, he's starting to get sick of it.

Operators want to own their subscribers and discourage them from using services from other providers, to boost their all-important ARPU (average revenue per user). But Bubley doesn't believe users want that. "Only one percent of people want to have one thing," he says.

It's true that the complexity of our current communications is wearing and wasteful. Users reach for a mobile phone because the number they want is in the address book, and then they make a pricey mobile call, even though they could dial the same number for free on their desk phone.

It has been estimated that up to half the phone calls business people make in the office are on mobile phones, for simplicity or because they are away from their desk. Mobile calls make up 80 percent of enterprise phone bills, according to research company Analysys.

It's a simple step from that to the conclusion that fixed-mobile convergence (FMC) will save lots of money. If you give your staff dual-mode phones, such as Nokia's Eseries models, or a dual-mode BlackBerry from RIM, they can automatically make VoIP calls over the Wi-Fi when they are in the office, and revert to the cellular network outside. They always have the same device and always have their data with them.

There are a lot of optimistic predictions from analysts: there will be 170 million FMC subscribers in the world by 2012 and FMC revenue will amount to about three percent of the world's mobile subscriptions, according to market research firm Informa. Dual-mode handsets will make up five percent of the handsets sold in the world by 2011, Informa predicts. But it's not that simple.

Will small businesses bother?
The smallest businesses tend to have a consumer-like outlook on life. Some of the FMC benefits, such as cutting costs by central billing, will pass them by. "FMC faces a substantial challenge in capturing the consumer imagination", says Informa senior analyst Paul Merry, who reckons only 4.4 percent of consumers will have FMC in five years' time.

FMC isn't even necessarily the best answer to the problem we used in the example above: that of accessing a number in a phone book. Users want to have all their phone numbers available when they make a call, but that doesn't mean they need them only on one phone — why not make it easy to share phone books and preferences between all the phones a user has? He or she can dial any number from any phone — and has the benefit of redundancy, if one phone breaks or gets lost.

"Consumers will buy multiple devices — although they won't carry them all at the same time," says Bubley. "Why would anyone want just one device? Phones are so cheap they are essentially consumer items, equivalent to the price of a new shirt or a pair of shoes."

The business case for FMC
Informa is more optimistic about enterprise FMC, predicting 8.8 percent of business users will have FMC phones in five years, drawn to them by the hope of unified messaging and a single account. But they might be disappointed.

Analyst Gartner is sceptical about the business case for dual-mode convergence. Instead of going all out for convergence, most enterprises should "let FMC happen" over the next seven to 10 years, as their phones and other kit naturally gets replaced, according to Gartner managing vice president Bob Hafner. Less than 30 percent of...

...enterprises will be able to build a business case for it, he told a Gartner Enterprise Networking Summit in Las Vegas earlier this year.

Most companies have some Wi-Fi in their building, but it doesn't tend to be good enough for voice. It doesn't have the coverage, or the reliability for voice quality — in many cases, it's only in conference rooms and lobbies. Plus it's used mostly by laptops, and people don't move laptops from one access point to another while they're using them, or use them while walking down the corridor — which is exactly how they use phones.

"The Wi-Fi you put in a year ago is no good for voice," says Hafner. Adding voice to it means an expensive upgrade, adding a centralised Wi-Fi switch or upgrading to one that can handle voice. Also, dual-mode phones are expensive compared to single-mode mobiles — and although ranges such as the Nokia Eseries are making a difference, they are still difficult to set up and have disappointing battery life.

Importance of standards
All too often a technology is held up by lack of standards, and FMC is no exception. IMS (IP multimedia subsystem) is converging voice and data on the core of the operators' networks. Wireless VoIP needs related standards, including VCC (virtual call continuity), which lets an IMS call or data session terminate over the internet and over Wi-Fi or other networks.

With IMS VCC, users can have just one SIP number, which could be used on different devices and accessed through different networks. But it's taking a long time to implement. In the interim, other options are being made available.

Some operators have offered services using UMA (unlicensed mobile access), which extends GSM cellular services over the customer's own Wi-Fi networks. BT's Fusion and Orange's Unik (available in France) are examples, but their main aim is to help the operator by boosting mobile coverage in the home.

Another approach is to add a VoIP client such as Skype, which can dial over Wi-Fi when a connection is available. This can cut phone costs, but in practice it can be the opposite of convergence. Running a VoIP client on a mobile means you have two applications and probably two numbers on the same device. The simplest services don't roam, either.

More sophisticated services such as Truphone are emerging, which include a cellular number that can be used like any other, and which integrate well with the cellular service on the dual-mode phone.

Multiple accounts
FMC is supposed to make paying for connections simple, but the practicalities are still emerging. Dual-mode devices will probably need multiple contracts (and you may prefer to keep it that way to get the best deals). For example, a Wi-Fi enabled phone may be using cellular service from a single provider, while Wi-Fi comes from a variety of sources, including your office LAN, a home network and from multiple hotspot providers.

The office Wi-Fi is probably going to be provided and supported by the IT department, effectively creating another account.

Things could get even more complex as mobile WiMax takes off. It's designed from scratch for data, rather than voice, but will probably carry both.

Mobile operators fight back
If all that seems daunting, there's one benefit of convergence that business users are agreed upon. Having one account may not always save money in the basic prices paid for services, but it should certainly save management time in organising, querying, upgrading and paying accounts.

If that's a priority, however, there is one obvious way to have a single account for voice services: use the mobile all the time. After all the discussion of convergence as a way to cut costs, this may sound bizarre — wasn't the idea to reduce the use of the mobile network?

In fact, there's a struggle going on in telecoms from which users can benefit. Many users are simply calling from their mobiles instead of their fixed lines, which is, at least in one sense, going in the opposite direction to FMC. While fixed operators see FMC as a way to keep users on their networks where possible, mobile substitution has so far proved a much stronger force than convergence, in the consumer market at least.

Many consumers have replaced their wired phone with a wireless phone, or moved to buy fixed broadband from their mobile operator. This could be pushed even further by the arrival of femtocells, which put a tiny cellular base station inside the user's house, backhauled to the mobile network over the home broadband, to improve coverage and give cheap calls indoors. Femto proponents say that this means there's no incentive to use the wired phone.

Femtos aren't in the market yet, and they won't be any good for big offices, at least not for some time, as they're single-cell systems that don't cover a large area.

Making the FMC decision
So should businesses bite the bullet and go for FMC, or look at the other options? Well, there's one way a dual-mode phone can slash a corporation's mobile-phone bill with very little effort. Sit it on the communications manager's desk and watch it strike the fear of God into the mobile operator's salesman when he comes calling to renegotiate the contract.

The price of mobile services will continue to plummet, according to research firm Analysys, and the fear of FMC should drive this faster. In one scenario, Analysys suggests that wireless data could become a commodity thanks to low-cost networks such as WiMax; mobile networks could become simply transparent data pipes; and mobile operators may have to slash their prices. "We are already seeing early signs of this scenario," says Dr Alastair Brydon of Analysys.

"Fixed-mobile convergence doesn't necessarily mean Wi-Fi. Customers are looking for predictable bills and the ability to reach staff easily wherever they may be," says Margaret Hopkins, an associate at Analysys. Nirvana might not even be what we first anticipated.