FMC: Fixed Mobile Convergence or Fixed Mobile Conversion?

FMC is a tired term.  Some operators and quite a few enterprises are fed-up of listening to ill-formed, technology-centric FMC pitches.  Taking a simplistic view, when a consumer has a mobile phone, why do they need FMC?  With virtually unlimited ‘night and weekend’ rates they already have cheap calling at home.  For an enterprise, when their employees have a mobile phone, they now have potentially uncontrolled costs, especially for roaming charges.  So I’m going to look at FMC from an enterprise perspective, because they have a pain point that FMC could potentially solve.  The lack of success of BT Fusion in the consumer market is a data point to back-up this assertion.

Looking at the market there appears to be three broad approaches to FMC:

  • The handset centric dual-mode approach where the enterprise replaces the mobile network with short-range radio (WiFi, DECT or Bluetooth) in the office.   They retain the mobile network for off-premises mobility and replace the desktop phone with a dual-mode device. The enterprise retains in their PBX and some voice-over-IP (VoIP) capability.  Here the device vendors, fixed operators and PBX vendors position their solutions.
  • The second option is where the enterprise uses signalling and/or VPN (Virtual Private Network) functionality to give it more control over call routing and costs.   It retains its PBX (or hosted PBX), its desktop phones and its mobile devices.  Here the fixed operators, system integrators and also the PBX vendors position their solutions.
  • The third, and the mobile operators favourite, is the substitution approach.  Where the enterprise replaces desktop phones with mobile phones and replaces the PBX with a mobile centrex/hosted PBX service.  Here the mobile infrastructure and device vendors position their solutions.

An example of the ‘dual mode’ approach is BT Fusion Plus.  The Plus is for WiFi rather than Bluetooth.  The BT Business Hub provides the wireless link between BT Fusion handsets and the BT Broadband connection and supports up to 10 Fusion handsets with up to 5 making calls simultaneously.   The Hub is able to connect up to ten PCs, laptops, and peripherals to BT Business Broadband.  They claim savings of about 80% compared to other mobile providers when making calls through the Hub.  For a small business the motivation is simple, communication savings when they’re in the office or connected via a BT WiFi hotspot.  FMC is just an element of the solution BT provides, and customers would use it to save money, I’ll come back to this point later.

For the ‘integration’ approach, at the simple end of the scale, the enterprise can simply purchase a bundle of fixed and mobile services from a service provider who is willing and able to provide both, for example, France Telecom’s VPN Unifie bundle.  Or Avaya has ‘Extension to Cellular,’ which is positioned as a feature within Communications Manager, their IP PBX software.  Where software on the mobile phone, Avaya’s  one-X Mobile Edition that runs on Nokia Series 60 / 80, Windows Mobile and Blackberry. The client can work out how best to optimize call routing.

And finally the simplest and most successful form of FMC, substitution, otherwise know as Fixed Mobile Conversion.  The enterprise replaces the desktop phones with cellular devices, and replaces the PBX with a mobile Centrex/hosted PBX service. This enables the enterprise to have both fixed and mobile numbers (regulation permitting).  A good example is Vodafone’s Wireless Office with roughly 2M customers.

I find it easier to think in pictures, so here is a diagram that gives a fuller view of the landscape I described above.

So given this landscape what are the emerging trends?

Most enterprises view the ‘integration’ and ‘dual mode’ approaches as unproven technologies.  The adoption of multiple new technologies simultaneously is challenging.  Some FMC installations require voice-grade Wi-Fi upgrades; most deployments require all users have a smart phone, and nearly all deployments use VoIP.  Currently there is proprietary and non-interoperable hardware.  High upfront capex costs for devices and hardware as well as a lack of standards and interoperability dilute the cost savings of least-cost call routing.  When IT decision makers think convergence, it isn’t about FMC; their convergence perspective is around voice and data (IP telephony).

Bottom line: FMC remains a specialized application in the cold-light of an enterprise’s priorities.  A recommendation is to move away from trying to sell just FMC, rather focus upon using FMC as a stepping stone to managed services contracts, e.g. Cisco’s SmartBusiness Communications System is a good example of this approach; and focus upon a broader enterprise unified communication and collaboration proposition.  The phasing of this bundled approach must to be driven by customer need, not technology availability.