A case for phone book 2.0? Part One : FMC (Fixed to mobile convergence) cannot live by ‘cost savings’ alone!

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A case for phone book 2.0?: FMC (Fixed to mobile convergence) cannot live by ‘cost savings’ alone!

This blog comprises a series of two blogs. (If you want to see Part two it is

A case for phone book 2.0? Part Two : FMC (Fixed to mobile convergence) cannot live by ‘cost savings’ alone!)

It started off by one of my usual Gedankenexperiment :

If I salesman from my Telecoms Operator(O2/Vodafone/T-mobile) knocks at my door .. trying to ‘sell’ me FMC – what would it sound like? What exactly are they selling and why? What’s in it for me? cost reduction?

Ofcourse, they will not say FMC – not withstanding that Operators tried to sell me WAP :) – so I can’t be too sure of that! (sorry I could not resist that! )

But question remains – as a customer – what exactly am I being sold by the FMC(Fixed to mobile convergence salesman? and what are its benefits?

The first part of this blog relates to the many answers I received at forumoxford alongwith people who contributed. The second part of this blog/article gives my analysis after understanding from these ideas

Here are some insights to the question(What is the value proposition of FMC (fixed to mobile convergence) to the customer?

a) Device convergence – Colin Campbell

It’s not to replace the landline; it’s to converge the device (as I understand it!). I.e. one device for mobile and fixed line use.

There are a number of advantages to having one device:-

The users data i.e. contacts/phone book are always available regardless of which type of communications you are using. (Landline or cellular)

End user experience is much more consistent.

The service provider/device manufacturer potentially gets more opportunity to control a bigger chunk of the end user experience. I.e. home and mobile.

The mobile operator is seeing a revenue stream from the home which they didn’t have before.

Also the device manufacturers can build in a wider range of subsidiary capabilities i.e. a set of applications targetted at the home environment, and some targetted at the roaming cellular environment. So they get two chances to up sell the device. egg. you could put applications on your mobile phone which integrate with your games console or set top box.

b) FMC is not necessarily about “converged devices”, nor is necessarily about dual-mode WiFi/cellular phones. It is a catch-all term, the definition of which depends on who is speaking.

Dean Bubley

It could include fixed+mobile bundling of the type done by numerous operators, perhaps including “closed user groups” of 1 fixed + 3 mobile numbers for free intrafamily calling.

It could be a mobile operator selling you a broadband connection, perhaps with a PC softphone client sharing the same number (and services, eg SMS), to your mobile, enabling you to take mobile calls via VoIP on your PC while travelling.

It could be a mobile operator providing you with a broadband-connected femtocell base station to give you better 3G coverage at home.

It could be a combined fixed & mobile operator (and these days, there are few “pure” mobile operators about) offering a way to link gamers on mobiles, PCs and consoles. Or watching a video clip on your phone, and then pushing the complete movie down to your HDTV/set-top-box server.

Some users will want one devices, others will want five. Some users will want 1 number or identity, others will want multiple. FMC is a convenient catch-all term which encompasses many of these capabilities.

So… overall “value proposition” will be a mix of:

* Cheaper calls, or at least different types of tariff structure

* Better indoor coverage (especially 3G, which is lousy at 2.1GHz)

* As much convergence or divergence of devices, numbers, bills as appropriate for your needs

* Assorted clever ideas for multi-access content / entertainment services

* Bundling and hence perhaps lower total cost to the consumer vs. less churn for the operator

c) Brand convergence: What level of convergence have they reached: Kevin Evans

Yes, it depends on who is talking and if they’re an operator to what ‘level’ of convergence they’ve reached. For example, convergence can mean:

* Brand convergence – one company offering multiple services, yet services remain more or less separate. Can be a reseller arrangement.

* Billing convergence – one bill

* Customer care convergence – one number to call

* Device convergence (or divergence – agreeing with Dean)

* Network convergence – one network (but Convergence at different OSI layers is possible further complicating things)

Convergence is an evolution and the end goal depends on the company’s strategy.

My view is, by and large, FMC in the short term and perhaps even medium term is at the first stage – brand convergence.

Voda and O2′s broadband aspirations are at this stage. Even NTL with Virgin Mobile is merely converged branding at the moment but this will change quickly when they complete the merger and integration. BT by contrast is a real leader in the FMC race. They’re at device convergence with Fusion and 21CN will take BT all the way to network convergence.

As FMC becomes vital to survival and everyone “is doing it”, I suspect the industry will split with some operators becoming converged network operators selling wholesale and retail telecoms services (this is where BT is headed) while others become more service brands.

d) Importance of presence: Shane Williamson

I concur with you on Presence as it is a key factor moving forward, but it needs to be converged with the online world too.

The problem with mobile today is it is still disconnected in a lot ways due to carrier control. So, there isn’t a huge rush by carriers to implement products and services that allow users to easily churn (particularly in Australia).

Presence is paramount as it is the key driver for services such as IM use & online gaming in the online world. People can see or be notified that the person they want to chat with is available. This needs to extend seamlessly into the mobile world too. Presence needs to bring disparate services together too, like the calendar on my business desktop synchronises with the mobiles services so when people call, my calendar shares this data with the voice-mail system and it changes the message to state I’m in a meeting. It then states I’m in the meeting until a specific time giving the caller the ability to choose how to then contact me.

Presence is also about using the right service at the right time, for instance the presence system would switch over to a cheaper RF network if it is available, automatically activating products that can now take advantage of this new connection type. Like VoIp when in a WiFi hot-spot.

I was involved with putting forward a project whilst at Hutchison here in Australia a couple of years back for centralising mobile contact details with a 3rd party company’s online service. The project was blocked as some senior managers were concerned such a service would allow customers to easily churn. They looked toward a more “stickier” solution for contact backup instead.

We are in a connected world now, so Islands of separated data and services must end. People should have 1 set of contacts, calendar, buddy lists, photo/music/video albums, personal/business files, digital rights management licences etc that are transparent across multiple devices and services.

I look forward to seamless roaming of data and services from my mobile world to my online (TV & PC) realms. Great to see we are getting there albeit slowly.

d) Enterprise segment Tomi Ahonen:

I think the most attractive proposition in FMC is the business customer (enterprise customer) segment.

I think the most attractive proposition in FMC is the business customer (enterprise customer) segment. There are a lot of workers who are explicitly “unmobile”. We want them to sit at their desks 8 hours a day (eg calling centre staff) or their work necessitates them to do most of their work at the desk (eg typical design and programming work).

For these, it makes sense to combine their computer systems with voice (typically VoIP) and then can give some gains from wirelessness (eg WiFi) and we can bundle cellular (mobile phone) benefits to it. Here is where I see the big future of FMC. In the home it is a lost cause, as nobody wants to own the home phone as we all have our mobile phones, and we know if the home phone rings, it is “not for me”.

Oh, and Ajit – in Finland already today there are more broadband connections than fixed landlines, so yes, broadband without a fixed line is a reality today already, starting with the cable modems obviously…

e) I think what the consumer wants is clarity, value and simplicity. And that means marketing the message is critical David Cushman

The services being offered become easily confused (do I want free internet calls from BT when I have skype?). Do I want ‘reduced cost’ capped broadband when you are about to offer me TV on demand?

Dean’s point about a mix is critical, and it’s not what is typically on offer.

Tomi will tell you how little people will want one converged device unless everyone in the household can have a personalised one each.

And, of course, the personalisation issue disappears in a work-at-your-desk environment.

I think what the consumer wants is clarity, value and simplicity. And that means marketing the message is critical.

e) Product bundling Jag Minhas

And herein lies some of the answer; it’s unlikely that the industry term “FMC” would ever be “sold” to you at all. Rather, you being a customer of Sky, the call centre at Sky would call you and try sell you broadband. The proposition would be something like “if you buy our XYZ package” and you contract to it for “X” months then we can give you broadband for “£Y” (or free)”

And so there are many variations on theme involving telephone, TV, Internet etc. Product bundling is a great way of increasing spend, but without necessarily corresponding to value of all the components in the mix. For example, if you buy Microsoft Office, you get quite a few things in the bundle, but you might not value all of them. You will pay for the bundle because you think it’s worth it as a whole rather than the sum of it’s parts, even though you are just after the parts.

f) The vendor needs to know the most important piece for me. In other words, they need to know my preference” Peter Cranstone:

“I think to ‘sell’ me the service, the vendor needs to know the most important piece for me. In other words, they need to know my preference”

It’s all about “Me”. Who am I (my preferences), What are my current device capabilities and Where am I.

If I give the vendor access to that information everytime I log on to their web site they can sell me an incredible service. However without “Me” data as Ajit says, it doesn’t go anywhere. It’s simply to hard to continually type in this data on a dynamic basis. It has to be transparent to both the customer and the content/service vendor.

g) Jim O Reilly : Template driven Mobile RSS If you look at it from the mobile 2.0 aspect where you are getting your mobile RSS feed and other server/broadcast/Fixed/ISP content into your mobile client via browser or idle screen (e.g. like Intromobile Dynamic Communications Convergence solutions) then this is combined with the user driven template choices (available in handset or via browser) where customers choose exactly what type of content elements or packages they would like to see (customised by Operator) and in which part of the screen that they prefer then you have the link between what is being served and what you are interested in . Thus linking tradionally Fixed and Mobile content choices . Trust that makes sense.

h) Cheaper calls/product bundles Jag Minhas : But there are certain things that operators *do* know about customers very well – and that is that they like lower prices for the services that they use. e.g. cheaper calling. Give a customer a way to get cheaper calling (or even free calling) and I’m sure every customer would take it. smile

Doing cheaper calling as part of a product bundle might allow operators to get something back in return. A similar concept could apply to Internet access, TV etc.

By the way, have you studied the way that the Sky TV (TV-only) package bundles work? The product range is structured and cleverly optimised to encourage you to spend a lot in order to get at the relatively small bit you really value. I can speak from experience here myself. In fact it’s even worse for me – I pay a lot of money every month to Sky, and I only end up watching BBC News 24 most of the time – which as you know is “Free To Air”. Why am such a mug to do this? Why haven’t I cancelled my Sky subscription?

You know why? I can’t bring myself to doing it because of just in case there comes a day when I wish to watch Discovery ….

i) One device to rule them all (plus cash savings) Colin Campbell

Having now signed up for a no strings attached VoIP service which offers me free calls till end of March I can testify the value proposition for the consumer is raw cash savings. Throw in the fact that it seems to work seamlessly as I drift in and out of the WiFi zone with my favourite ‘cellphone’ (Nokia E61) and it seems there is the potential for major changes in the value chain.

In the last two days I’ve consigned the house fixed line and the Skype application to the archives! (excepting presence and IM from Skype).

Excellent voice quality, seamless user experience, one device, one phone book, free calls. That’s a hell of a proposition.

Ok. so free calls will not last forever, but everyone is entitled to some payment for providing a service. Even SIP VoIP service providers have to eat.

Its only two years since I adopted Skype. This shows to me the pace of change. How may revolutions can a man take in lifetime!

In 20 years in this country (UK) we have gone from a government institution (Post Office) running a bunch of copper cable, and taking 6 weeks to install a new connection, through a blue Mercury button mysteriously appearing on your fixed line phone which offered a marginal discount on long distance calls, to where we are now with a fistfull of service providers, hungry for business, offering me calls across the globe to almost 2 billion other subscribers for next to no cash.

That’s the value proposition. And that’s why this will have a massive impact, and why mobile and fixed line is one business that’s big business for the guys who build that loyal customer base.

And perhaps the most beautiful thing about it all is that its all running over the same copper we had twenty years ago. That’s magic!

(no pavements were harmed in the making of this movie!)

j) Free calling + unified phone book: Jag Minhas

I agree with you 100%. Free calling is something that people value. You don’t need sophisticated customer behaviour modelling to determine this. And quite frankly, you don’t need FMC,

… or VoIP

… or Skype

… or JahaJah

… or Truphone

… or whatever. You just need free (or cheaper) calls.

And if you can do all this from your mobile phone (which contains all the phone book that you have so carefully pruned over many years) then even better!

k) Who needs a phone book on the phone Shane Williamson

Check out Fring it access directly your Skype & Google talk directories on your mobile.

l) Phone books: by Jag Minhas

You have a point re phone book cf Skype and Google Talk, but the phone book is a long way off from being substituted by Skype/Google/Windows-Live buddy lists, and that is because:

1) E.164 identities (phone numbers) are not closed to any particular community. They are “open” in the sense that you can give anyone your phone number and you know that they can a) call you, b) message you, and c) refer to you using whatever friendly name they wish.

2) You can call or message someone using their phone number even if they are not present.

3) Buddy lists are usually built up over time from a series of person-to-person, relatively “intimate” relationships, either personal or professional relationships. Mobile phone-books often contain entries for “taxi”, “pizza”, “Chinese takeaway” etc.

I touched upon this topic, and the whole issue of presence etc. in a keynote presentation I gave to Mobile Instant Messaging conference in London in November. You can view the slides here: http://www.slideshare.net/route79/mobile-instant-messaging/1

Part two it is

A case for phone book 2.0? Part Two : FMC (Fixed to mobile convergence) cannot live by ‘cost savings’ alone!

Comments

  1. Hermes says:

    Interesting comments from Kevin on convergence – a customer wants all on one bill, so question is as to who will deliver that first? I’m sick of messing around with all my utility bills!