Telecoms must understand what consumers are looking for from a fixed-mobile convergence (FMC) offering before they...
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bring the technology to market.
For one thing, the primary driver for adoption can vary widely by market and market segment. Many consumers are looking to cut wireless calling charges by making calls over a Wi-Fi connection, according to Paul DeBeasi, research analyst for Burton Group. Others are looking for improved indoor coverage.
"[The demand] is primarily in areas where there is poor coverage, as more and more people are not getting landline phones and are using their mobile phone as their primary phone," DeBeasi said. "For $99, you can put a femtocell in your apartment and you've got five bars of coverage."
A femtocell is a small device, similar to a Wi-Fi access point, which subscribers can put in their homes to create a small coverage area of the carrier's cellular signal that is compatible with any of that carrier's line of phones. Consumers in rural areas who have decided to ditch their landlines are particularly interested in the technology as a means of improving their wireless coverage at home.
Improved indoor coverage from femtocells is a good way to boost customer retention, but unlimited calling over a Wi-Fi connection with a dual-mode phone has its own perks. It can also boost retention, and carriers can charge an extra monthly fee for the service. Also, running calls over a Wi-Fi connection takes some of the load off a carrier's backhaul network.
When Canadian telecom Rogers Wireless first imagined its dual-mode FMC solution, it found that the name for the service had the wrong marketing message for its subscribers.
Originally dubbed "Home Calling Zone," the service almost suggested a femtocell solution. Rogers found that another moniker better captured what consumers wanted with their new dual-mode Wi-Fi phones: TalkSpot. The service lets users make unlimited, clear calls from their cell phones when they are calling within distance of a compatible Wi-Fi connection.
"We did the research, and it seemed that the TalkSpot name better communicated what the benefits of the product were," said Reade Barber, director of new services market launch with Rogers Wireless. "The main benefit was that you could talk unlimited."
FMC technology has been a hot topic for carriers lately, particularly as they start playing with femtocell deployments and the cost of embedding Wi-Fi goes down.
But while the number of capable devices has boomed while prices have dropped -- there are an estimated 4 million UMA (the leading dual-mode standard) devices worldwide today -- carrier adoption has somewhat lagged as the consumer pitch is fine tuned.
For example, while Rogers has found that the unlimited-minutes message resonates, other telecoms might need to emphasize the improved local coverage. Likewise, Rogers saw little success when talking about improved home coverage.
"Rogers has great coverage, so [customers] don't really have that issue," Barber said. "That's not something Rogers is marketing."
And while so far the primary customers have been early adopters, Barber was bullish on the prospects of larger deployments.
"I think any new service, it's a challenge to get it out there and understood by the majority of customers," he said, declining to give specific adoption figures. "The people on the sidelines are still mulling it, they're thinking about it, what it means to give up their home phone [for a dual-mode device]."
But after extensive sales training, pitched primarily by in-store employees, the customer calls have started coming in, Barber said.
"This is still early for the [FMC] market," said Burton Group's DeBeasi. "There's a need for it, but there are still some things that need to be worked out."
Ultimately, one key to success might be to pick one of those two messages -- cost cutting or improved connectivity -- and stick with it as telecoms seek to educate their users on what exactly FMC means, whether it comes in dual-mode handset or femtocell flavors.
There are some common-sense steps to cut out later grief that carriers can take before rolling out new technology, said Steve Shaw, vice president of market development for Kineto Wireless, which supplied Rogers with some of the UMA technology used in its solution.
"The most common issues [hurting FMC deployments] are making the offer too complex and not being sure what the goal of the offer is," Shaw said. "If the goal is to drive new broadband subscribers, price the plan to provide incentives to move to your [broadband] offer. If the goal is to reduce churn, provide discounts and incentives to do that."
Knowing what a service provider wants out of an FMC solution is a critical step in getting consumer adoption, according to Shaw.
"For companies with a clear understanding of why they are launching the service, it is much easier to tailor the plan for success," he said.
Consumer FMC has seen limited adoption overall. In the United States, T-Mobile and Sprint have begun deploying the technology, while AT&T and Verizon quietly watch from the sidelines. But DeBeasi said the market will heat up soon, so it pays to have a plan in place.
"People have been talking about it for a long time," he said. "But I think by this time next year, AT&T and Verizon will both have their product on the market."
The advent of 802.11n may also help boost adoption for both dual-mode Wi-Fi solutions -- which would benefit from the greater range and throughput -- and femtocells, as carriers have a chance to embed their own cellular access into an all-in-one wireless router device, reducing the total cost of a femtocell alongside a wireless router sufficiently to make the combination palatable for consumers, according to DeBeasi.
"The timing is right," he said.