Research: Convergence in mobile communications

Executive summary:

• The respondents in this research had a good understanding of the term "convergence" as it applies to mobile communications, with between half and three-fifths relating it to:
  - Voice, data and other services available over the same mobile network
  - Integration of fixed-line and mobile services (fixed/mobile convergence)
  - Access to voice, data and other services via one mobile handset
  
• Penetration of fixed/mobile convergence within UK enterprises is currently quite low. Less than one-fifth of the mobile organisations researched reported a high or very high degree of convergence and almost half stated this to be low or very low.
• Implementation was higher for mobile convergence of voice, data and other services, with almost one-quarter of all respondents noting high or very high convergence, and only a third reporting the lowest levels.
• Highest current application of converged communications technologies was found for WLAN in the office, mobile voice and data, fixed-line IP telephony and use of WLAN hotspots. Fixed/mobile convergence and mobile VoIP are less applied and only 10 percent of enterprises declared use of an internet-hosted PBX.
• The market is poised for strong growth in mobile VoIP, internet-hosted PBX and fixed/mobile convergence. The user base in each of these areas is predicted to increase by more than 135 percent over the coming two years.
• Mobile VoIP and fixed/mobile convergence are expected to see a very large increase in numbers of users. Around two-fifths of the enterprises researched plans to become new users over the next two years.
• Significant uptake is predicted for fixed-line IP telephony; mobile voice and data, internet-hosted PBX and use of public WLAN hotspots are planned by an additional 13-14 percent of the sample. The strong growth rate for internet-hosted PBX translates into a more modest increase in number of users, due to the much smaller current installed base for this technology.
• Key drivers in the uptake of converged mobile communications are to provide improved business efficiencies, to facilitate overall cost savings and to offer an improved customer service. Other drivers of importance are the provision of better communications to both customers and suppliers, and the ability to facilitate home working for staff.
• The most important barriers to adoption are related to costs and security issues, with the costs of time online and those involved in the upgrading of current business applications both noted of importance. The management and support of devices used on a converged network is also seen as a concern.

Introduction, scope and methodology
Convergence is a much-used and, in many ways, over-used term in the communications world, and may hold many different meanings to users. There are, however, two key areas of convergence that are widely applied in relation to mobile communications:

• Fixed/mobile convergence
• Voice/data convergence

Fixed/mobile convergence aims to provide both fixed-line and mobile telephony services to users through the same handset. Handsets can support both wide-area mobile network access and local-area connection to fixed-line technology, typically through a local wireless connection.

Voice/data convergence in the mobile context enables the provision of voice, data and, in many cases, other communications services (email, text and so on) over the same communications network and to the same mobile handsets.

Mobile convergence is a fast-moving area, applied through a range of technological solutions related to the devices, networks and communications services provided.

In our research we set out to investigate the degree of implementation of these key areas of mobile convergence throughout the UK, the main technologies in use and future plans for implementation. We also investigated the main drivers and barriers to adoption by user and potential user enterprises of all types and sizes.

This research was carried out as part of a broader research study sponsored by Orange UK investigating the top mobile trends today and their impact on UK enterprises. The study was undertaken by ZDNet.co.uk in association with Rhetorik, a specialist market intelligence organisation that focuses specifically on European IT and telecommunications markets.

The survey used web-based survey techniques with a detailed questionnaire applied through the ZDNet.co.uk research panel, as well as a broad sample of knowledgeable respondents drawn from readership of specialist CNET technical publications.

The research was conducted with a significant sample of 371 organisations of all types and sizes with some degree of mobility within the workforce.  A breakdown of these respondents by size of organisation is presented below.

Figure 1: Respondents by size of organisation

Q42: Approximately how many people are employed in your organisation (in the UK)? (single response)
Base: All respondents; Total: 371
Source: Rhetorik 2007

End-user understanding of mobile convergence
Convergence is a term applied in differing contexts within the communications arena. Before exploring in detail the use and applications of convergence in this survey, we first set out to establish the understanding of this term among our respondent base, within the context of mobile communications.

Encouragingly, respondents were quite knowledgeable in this area, with the majority readily associating with the key areas of usage.

Between half and three-fifths of our research sample understood the term to apply to the following:

• Voice, data and other services available over the same mobile network
• Integration of fixed line and mobile services (fixed/mobile convergence)
• Access to voice, data and other services at one mobile handset

Least knowledgeable were mobile users from the smallest organisations, with 15 percent from the small office/home office (SOHO) sector unable to respond. Generally, understanding in each of these areas increased as size of organisation increased, and users in the large corporate sector (more than 1,000 employees) related convergence most strongly to fixed/mobile convergence.

Figure 2: End-user understanding of mobile convergence

Q24: What do you understand by the term "convergence" in relation to multiple communications? (multiple response)
Base: All respondents; Total: 371
Source: Rhetorik 2007

Penetration of mobile convergence within the enterprise
Having established the knowledge base of our respondents, we next explored penetration of the key convergence areas within their existing operations.

Fixed/mobile convergence
The degree of implementation of fixed-mobile convergence within UK enterprises is currently quite low. Among our sample of organisations, all having some degree of mobility within the workforce, less than one-fifth reported a high or very high degree of convergence in this respect, and almost half (45 percent) stated this to be low or very low.

There was no apparent variation in the degree of integration of fixed/mobile convergence between large and small enterprises. However, the level of mobility within the enterprise did have an impact. The proportion of organisations reporting very high levels of convergence increased from only two percent for those least mobile (less than five percent mobile workforce) to 11 percent where mobility within the workforce was 70 percent or more.

Figure 3: Fixed/mobile convergence — degree of implementation

Q25.1: To what degree would you say that "fixed/mobile convergence" is currently implemented in your organisation? Please rate on a scale of 1 to 5, where 1 is "very high convergence" and 5 is "very low convergence".
Base: All respondents; Total: 371
Source: Rhetorik 2007

Convergence of voice/data and other services
When considering mobile convergence of voice, data and other services, the degree of implementation was higher. Almost one-quarter of all respondents claimed a high or very high degree of convergence, and only a third reported application to be low or very low.

Again, there were no significant variations apparent by size of enterprise but the level of mobility within the organisation was a clear differentiator in this respect. With only four percent of those least mobile (organisations with less than five percent of the workforce mobile) reporting a high degree of voice/data convergence, penetration increased to 15 percent for those with a mobile workforce of 70 percent or more.

Figure 4: Voice/data convergence — degree of implementation

Q25.2: To what degree would you say that "convergence of voice/data and other services" is currently implemented in your organisation? Please rate on a scale of 1 to 5, where 1 is "very high convergence" and 5 is "very low convergence".
Base: All respondents; Total: 371
Source: Rhetorik 2007

Converged communications technologies
Respondents were also questioned on the use of a range of converged communications technologies both within and away from the office.

Converged technologies in use
When enterprises with some degree of workforce mobility were asked about the technologies in current use, a number of clear leaders emerged. Between half and three-fifths of these organisations have applied:

• Wireless LAN in the office
• Mobile voice and data
• Fixed-line IP telephony

Over two-fifths reported mobile staff using wireless LAN hotspots when away from the office.

Around one-quarter of all these enterprises have implemented fixed/mobile convergence to some degree, and a similar proportion are users of mobile VoIP. Only 10 percent have adopted an internet-hosted PBX at this time.

Incidence of use increased with the size of the user organisation for most technologies, although use of mobile VoIP and wireless LAN in the office seemed less size-dependent in this respect. The level of mobility within the workforce was also a driving factor, although of less impact for the use of IP telephony.

Figure 5: Converged communications technologies in use

Q26: Which, if any, of the following converged communications technologies are currently used by your organisation? And which additional technologies do you plan to use or consider in the near future (next two years)? (multiple response)
Base: All respondents; Total: 371
Source: Rhetorik 2007

Converged technologies in future use
When questioned on expected future use, strong uptake was anticipated in a number of areas over the next two years.

A fifth of all these organisations will take up fixed-line IP telephony; and new use of mobile voice and data, internet-hosted PBX and public WLAN hotspots is planned by an additional 13-14 percent of the sample.

By 2009, greatest application is predicted for fixed-line IP telephony, with 71 percent of our research base anticipating use. Of the mobile convergence technologies, mobile voice and data, WLAN in the office, mobile VoIP, use of public WLAN hotspots and fixed/mobile convergence are all expected to be widely applied. These will be available in between half and two-thirds of all the enterprises we researched. Almost a quarter of all these companies plan the use of an internet-hosted PBX by this time.

Figure 6: Converged communications technologies — future use

Q26: Which, if any, of the following converged communications technologies are currently used by your organisation? And which additional technologies do you plan to use or consider in the near future (next two years)? (multiple response)
Base: All respondents; Total: 371
Source: Rhetorik 2007

Growth in uptake of converged technologies
Looking at these results in terms of growth in uptake over the existing user base, the most rapidly growing convergence technologies are mobile VoIP, internet-hosted PBX and fixed/mobile convergence.

It is clear that the market for these technologies is poised for particularly strong growth, with the user base in each predicted to increase by more than 135 percent over the coming two years.

Figure 7: Converged communications technologies — % growth in user base (next two years)

Q26: Which, if any, of the following converged communications technologies are currently used by your organisation? And which additional technologies do you plan to use or consider in the near future (next two years)? (multiple response)
Base: All respondents; Total: 371
Source: Rhetorik 2007

Drivers and restraints in use of converged mobile communications
We next explored the perceived drivers and restraints in use of converged mobile communications within these organisations. Respondents were asked to rate lists of possible benefits and barriers in terms of importance to their organisation.

Drivers of use
Figure 8 presents the percentage of respondents noting each driver as "important" or "very important" to their organisation when considering the adoption of converged mobile communications.

In overall importance, the key drivers were related to efficiencies in the business, cost savings and the provision of a better service to customers. Eighty-six percent of all respondents identified improved business efficiencies as "important" or "very important", closely followed by cost savings (83 percent) and improved customer service (81 percent).

Interestingly, when looking at factors considered "very important" alone, business efficiencies and customer service were of greater significance to our respondents than the savings in cost that might be possible.

Other drivers of importance were the provision of better communications to customers and suppliers, and the ability to facilitate home working for staff.

Figure 8: Drivers of converged mobile communications

Q27: How important do you consider each of the following as drivers or benfits to your organisation in employing converged mobile communications technology? Please rate on a scale of 1 to 5, where 1 is "very important" and 5 is "very unimportant".
Base: All respondents; Total: 371
Source: Rhetorik 2007

Barriers to adoption
Similar to Figure 8, Figure 9 presents the percentage of respondents rating each barrier as "important" or "very important" to their organisation.

Costs and security issues were clearly uppermost in our respondents' minds, with costs of time online and costs of upgrading existing business applications of importance to 73 percent and 61 percent respectively.

The threat of breaches in security was also a key barrier to wider data access through these means. Two-fifths of all respondents awarded this barrier the highest importance rating, and 71 percent considered it important overall.

Another tier 1 barrier was concerns over the management and support of devices used on a converged network.  This was clearly an issue for IT/communications management and support.

Other significant barriers were the lack of a strong business justification for implementation of this technology, difficulties in the selection of appropriate devices in this fast-changing market and the complexity of technical design involved.

Perhaps because of the increased technical knowledge within their larger IT departments, respondents in larger enterprises had less concern about device selection. However, conversely, the importance of device management and support as well as security considerations grew with increasing size of enterprise. The larger organisations were also more focused on the need for a clear, compelling business justification before implementing mobile convergence, probably due to the higher investment implications on existing infrastructure.

Figure 9: Barriers to converged mobile communications

Q27: How important do you consider each of the following as barriers to your organisation in employing converged mobile communications technology? Please rate on a scale of 1 to 5, where 1 is "very important" and 5 is "very unimportant".
Base: All respondents; Total: 371
Source: Rhetorik 2007

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