Thus, the challenges to win in this new and dynamic environment are enormous making focus, speed, cooperation and ongoing innovation imperative to its many members.
The convenience and the new functions offered by the mobile devices and the huge price drop in virtue of the strong competition, the subsidies available and the regulatory model and the interconnection implemented in several countries have been essential factors towards the substitution of fixed telephony to mobile. While fixed telephones have changed very little, the mobile devices have many useful features such as, the ability to store dozens of names and numbers, send text messages, etc. Therefore, the mobile telephones have grown rapidly and have already surpassed the fixed ones, whose growth has stagnated globally and is in decline in many countries. More and more consumers, mainly the younger ones and including around 5% of the Europeans and Americans, are returning their fixed lines and beginning to use only their mobile lines.
In addition to this substitution trend and churn of clients, other factors have acted decisively towards the intensification of the search for convergence of technologies: the need for large telecommunication groups to find new forms of revenue, with innovative products and services, and the increasing demand for multimedia services in the residential environment as well as the corporate one. A wide range of new opportunities for growth is then developed, whether through communication and messaging applications, management of personal information, entertainment, localization, productivity, etc. Video on Demand, interactive TV, online interactive games, e-learning, telemedicine , teleworking, web conferencing and web surfing are only a few examples linked to the new content and multimedia applications that will meet the new demand for more flexibility and mobility. And, therefore, there is nothing more attractive than combining the mobility of the cellular world to the more accessible prices of the minutes in the fixed telephony world.
With this in mind, the carriers around the world are defining their strategies for convergence of fixed and mobile networks. One of the main recent initiatives was the creation of FMCA, Fixed Mobile Convergence Alliance. Initially founded by 6 carriers, British Telecom, Brasil Telecom, Swisscom, Korea Telecom, NTT and Cegetel, it today counts on more than 24 carriers, representing more than 500 million consumers worldwide.
The technological platforms to enable all this revolution, in some aspects, are moving ahead in leaps and bounds. Looking at it from the point of view of backbones, it can be claimed that NGN is the main leveraging factor behind fixed-mobile convergence. The IP protocol has shown to be, without a doubt, the most flexible way to offer voice, data and video services through the same network.
The migration of telecommunication platforms to an environment that links the technological advantages of the IP protocol to the advantages of the traditional TDM technologies will be a crucial factor towards the future success of these new enterprises. In turn, the inclusion of IMS ( IP Multimedia Subsystem ) allows multimedia services to be applied to the fixed-mobile convergence context, enabling a layer of control with open interfaces to interact with the transport and service layers. In relation to accesses, the public Wi-Fi networks have gained more and more space. In the world, there are more than 70 thousand public Wi-Fi hotspots and an average growth of more than 20% a year for the next 5 years is expected. The combination of Wi-Fi and Wimax networks, in combination with , will assure multimedia services, based on IP technology, with seamless handoff.
However to definitively and fully achieve this convergent future, many obstacles and challenges have yet to be overcome:
• Telecom carriers maximize their structures: the largest part of the large world carriers today already see the need of an inevitable and profound organizational transformation, which involves a change from the known business unit structures to structures which are more client focused. No matter how easy it is on paper to design new structures or how much the awareness of people towards this need has increased, the processes for change, not only those linked to the operational, but mainly cultural, integration of the systems, are extremely complex. Executives must have an extremely collaborative outlook with teamwork and oriented towards the macro objectives of the organizations. This outlook is most of the time contrary to the personal urges for power and status. This transformation demands a very firm stance from the top executives in order to enable the incentives and the dedication needed for the whole group so as to assure the maintenance of the focus in the same way as the previous structure enabled. It can be claimed that the carriers which are more advanced in this process have a greater opportunity of coming out ahead and gaining the best position in the market.
• Telecoms must develop more retail abilities: the offer of multimedia and content services demands a high capacity of knowledge and communication with the client and a constant update in the portfolio of services. To be attractive, content must always be up to date and, given the expanse and variety of interests, they must be as targeted as possible. In turn, the mobile devices enable the personalization of services, favoring this targeting and communication with the client. And one of the greatest challenges is the balance between this personalization with the mass production of more traditional telecom services and that the high investments require, enabling a proper return to the shareholder. The carriers need to know how to educate this consumer avid for new, convenient and simple services but in a way which is economically viable;
• Regulatory entities must adapt to the new scenario: up until now the regulations have been aimed at technologies and the increase of competition. Without a doubt, the increase of competition must be a priority factor, however, it must be carried out efficiently. The high investments demanded for infrastructure, combined with the lack of regulations for some services or the over abundance of them in other cases, can lead to great risk and imbalance to the sector. They must then find a balance to motivate the development and provision of new services, assure market laws and allow efficiency in the operations. Regulatory themes, in come cases distributed to different unlinked entities, must be treated in an integrated manner. Even more, with the internet, many geographic boundaries no longer exist, which also demand new outlooks and multilateral discussions. The reform of the regulations must focus on the creation of unified frameworks that move from the requirements of individual licenses to generic legislative requirements. From the point of view of fixed-mobile convergence, as the opportunities are still limited, little regulatory attention has been given to the matter, which should rapidly change in relation to the pace in which the technological solutions are fully available.
• Suppliers need to follow the new demand for services: in the majority of the cases, the suppliers have behaved as the creators of needs as they develop new technologies. In the case of fixed-mobile convergence, the demand of the carriers is of great value to the consumers and the equipment suppliers need mainly to meet the requirement for the development of devices that support the initiative and those that can reach also the lower income layers. From the point of view of the content suppliers, the new context must be seen as an excellent opportunity for new content distribution channels. Then, telecom carriers and content suppliers need to learn to work in combination, understanding concerns, limitations and opportunities on both sides. They must find the balance in matters related to sharing of revenue, content formats, exposure and development of new trademarks and gateways, exclusivity of distribution of content, assistance and billing of final client, etc. The volume of content service subscribers is still very low but will certainly grow exponentially at the pace in which these matters are resolved in a mature fashion, bringing excellent results to both parts
• Standardization of systems for the integration of technological platforms: the new technological platforms have a high degree of sophistication and complexity and the creation of many associations has played a fundamental role in the development and integration of these platforms. These associations, however, need to work more closely, assuring the interoperability of the systems and applications. In this manner, the FMCA has show an excellent initiative to increase and seek intra-alliance discussions
The basis of the technological platforms for the convergence of services and the union of the fixed and mobile networks are already available and this is a path of no return. Now all that is needed is the cooperation and the contribution between the different interested parties of the industry. Therefore, in no time we will have a vast range of services, and the telecommunication industry will once again be positioned as the central link of convergence between the many companies and consumers, but this time, facilitating and enabling communication, operation and entertainment in a much broader and unrestricted manner.
