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Fixed Mobile Convergence: Where Does Perception End and Reality Begin?
by Ravi Kodavarti, Small-Medium Business, Communications Infrastructure and Voice Group
1/28/2008
The buzz over fixed/mobile convergence (FMC) is still out there. But the reality of the situation is that when FMC finally does emerge from being an "budding" technology to become a viable economic force in the marketplace, it may not resemble what the industry perceived it to be. It will most likely have multiple co-existing technologies that are deployed by different carriers to address their specific customer bases, business models, and eco-systems.
The possibility of FMC services first floated to the surface several years ago when the capabilities of dual-mode mobile handsets were conceptualized. These handsets can communicate over either the wireless cellular network via GSM, CDMA or other cellular protocols or they can utilize Voice over IP (VoIP) to communicate over Wi-Fi wireless local area networks (WLAN) based on IEEE 802.11x technology. Dynamic handoffs can take place between the two networks as the handset's user transitions out of the range of one wireless network and enters the range of the other.
With the dual mode capabilities of new handsets, a voice call could conceivably move freely between the cellular network where it would be charged on a per-minute basis and, for example, the subscriber's home WLAN network, where, as a VoIP call, it would be included under a flat monthly fee (see figure 1). The value proposition for subscribers revolved around replacing landline telephone service with wireless service at a reduced cost since at least some of their calls would be low-cost VoIP calls over the IP network. The value proposition for carriers was around taking revenue from the wireline providers and further "owning" the customer.
This rather traditional type of FMC service has been rolled out in a few markets in Europe and in the US. In Seattle, Washington, for example, T-Mobile is offering a service based on this model. It is attractive to wireless service providers because it gives them an opportunity to add new subscribers based on the low flat fee for WLAN-based calls and this new group of subscribers doesn't trigger an expansion of the cellular infrastructure, since at least some of their calls will be handled by the IP network.
Even though the case of T-Mobile and others demonstrates that the traditional FMC model is do-able, there remain several technical and business issues that have been a drag on the wholesale deployment of it. Technically, implementing a dual-mode handset is not a trivial matter and only a relatively few have hit the market so far, although more are on the way. The power consumed while the handset constantly searches for an available WLAN network can irk users since standby and talk times consequently will be reduced. Extensions to the IEEE 802.11 standard exist to address this issue.
The co-existence of a third wireless technology, Bluetooth, for wireless headsets, ear-buds and other peripheral devices, can also cause problems because both WLAN and Bluetooth share the same frequency range in the wireless communication spectrum. Sharing an antenna among three technologies is one issue, but conducting a WLAN-based VoIP call while using a Bluetooth ear-bud is another. Unless countervailing technology is employed, contention between WLAN and Bluetooth for the same spectrum can arise and voice quality may erode.
Fortunately, technology providers are addressing these battery life and co-existence issues. Texas Instruments, for example, has developed low-power and co-existence technologies to overcome these difficulties.
On the business side of things, the traditional FMC model raises some interesting operational issues. Billing systems, for example, have not yet caught up with the technology. Calls initiated in the cellular network but which transition to a VoIP call are still charged on a per-minute basis for their entirety. Conversely, calls placed through a WLAN connection are only billed under the flat monthly VoIP fee even when they are handed off and completed as cellular calls. These and other operational issues must be considered and solved by service providers contemplating a roll-out of a traditional FMC model.
Smaller Might Just Be Better
An alternative to the traditional FMC model involves mini-cellular base stations inside of homes and businesses. Known as femto cell, this "base station-in-a-box" is connected to the home's or business' broadband link to the IP network. Calls within range of the in-building base station would be routed over the IP network as VoIP calls while calls outside of the building would be handled by the regular cellular network.
This FMC model avoids the issue of dual- or triple-mode handsets. The service provider would have to figure out the handoff mechanism between the mini-base station and an external cell tower, but the cellular providers have been handling handoffs for years. Another technological hurdle is managing spectrum of multiple femto cells that are co-located in a business or residential environment. Unlike WiFi, cellular spectrum is regulated and managed in a cell tower. A similar type of spectrum management will need to be addressed at a smaller scale as well.
One of the tipping points for the femto cell FMC model right now is the cost of mini base stations. Some believe that this cost figure must drop below $100 for this model to get off the ground. Trends indicate that this cost threshold could be reached soon. In fact, the cost of regular base stations has been dropping recently. Among the technology providers that are driving these costs down, TI has contributed with its ‘C64x+ digital signal processors for wireless infrastructure.
Of course, this model presupposes a seamless arrangement between a cellular provider and the broadband access provider. For companies like Verizon, AT&T and Orange in the UK that play in both areas, this would not be a problem. But pure-play cellular companies may be forced into sharing some of the revenues with the broadband access provider.
Other Alternatives
Other FMC models can also emerge over the short term. For example, wireless WiMax technology, the wide-area counterpart of Wi-Fi, could be deployed in an FMC scenario. WiMax technology is currently being deployed both as a wide-area wireless replacement for DSL and cable modem landline broadband connections to the IP network. It is also being deployed in a wider context with mobility features. In parallel, the development of fixed terminals and handsets are moving forward for both fixed and mobile environments respectively.
Another FMC model has been referred to as fixed/mobile substitution or FMS. In actuality, this is not a technology, nor does it involve any technological innovation. Like the mini-base station model, a subscriber to an FMS service would have a "home" cell on the cellular network, but the home cell would be the external cell tower that provides coverage for the subscriber's residence. All calls placed within the home cell are billed at a flat monthly rate, even though the caller may leave the home cell while a call is taking place. FMS is really a business strategy by cellular providers to encourage subscribers to substitute wireless communications for the wireline connection that is currently functioning as the primary communication channel for their homes.
Under the UC Umbrella
Unified communications (UC) recently entered the parlance of the industry, although it is much wider in scope than FMC and encompasses FMC under its umbrella. Whereas FMC has its roots in consumer residential applications, UC applies some of FMC's concepts to business settings. In addition to the base concepts of FMC, UC incorporates ideas from the PBX domain, and incorporates additional features like universal access to voice mail, instant messaging, text messaging, presence tracking, individual and group calendaring and address book synchronization, and others (see figure 2).
Perceptions Becoming Reality
In true chameleon style, the industry perception of what FMC is and what it will become has changed as technologies have evolved and consumer preferences have shifted. Now, the key question concerning FMC has become which model will emerge as a viable force in the marketplace? Of course, service providers will ultimately decide which model to deploy, but they will base their value perceptions of the various FMC models on their reading of consumer preferences. . Ultimately, providers will get behind the FMC model that they believe brings the most value to their customers. Then, the cost of providing such a service must be covered by what subscribers are willing to pay for it. Again, it comes down to a question of perception becoming reality. When the perceived value outweighs the cost, marketplace demand will follow.
About the Author
Ravi Kodavarti leads the product management efforts for the VoIP residential and small-medium business (SMB) gateway market in Texas Instruments' Communications Infrastructure and Voice group. He is responsible for product definition and direction for a family of VoIP solutions for both terminal adapter and gateway market segments.
Previously, he served as a senior technical staff member where he was responsible for technical support of TI's VoIP and 802.11 products. Ravi joined the company in 1995, where he began working in TI's wireless design center. Kodavarti began his career as a product designer with Advanced Micro Devices.
Kodavarti holds a BE from Karnataka Regional Engineering College, India, an MS from Texas A&M University, and an MBA from Northwestern University.About Texas Instruments
Texas Instruments Incorporated provides innovative DSP and analog technologies to meet our customers' real world signal processing requirements. In addition to Semiconductor, the company's businesses include Sensors & Controls, and Educational & Productivity Solutions. TI is headquartered in Dallas, Texas, and has manufacturing, design or sales operations in more than 25 countries.
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