Wireless-to-wireline consolidation: The next step for bundles

Over the last two decades, many tens (or, more likely, hundreds) of billions of dollars have been spent deploying today's nearing- ubiquitous wireless networks. These wireless networks have experienced enormous growth and have simultaneously been transformed through several generations of technology, with today's 3G--just being deployed--already in the planning stages for evolution through 4G and beyond. 

Interconnection between wireless and wireline networks (for originating and terminating calls from one to the other) has been an essential requirement since cellular's beginning in the mid-1980s. However, wireless has grown up and, except for call interconnection, is otherwise essentially separate from wireline. Separate networks, business operations and virtually separate companies run the wireless network businesses. 

But the separation and independence of wireless from wireline services is beginning to change. Cingular's acquisition of AT&T Wireless is but a leading manifestation of this coming convergence. Several growing trends and forces impacting the global telecommunications industry and its structure drive wireless-to-wireline integration (W2I). Two of the major drivers are bundling and cost containment.

Bundling, discussed in an earlier column ("Life after Bundles"), is a marketing- and sales-driven approach to keep a provider's existing customers from switching and to grow the average revenue per user (ARPU). Offering bundles is a near-universally applied sales and marketing tool. But bundles affect more than just the customer-facing layers of operations. And W2I will have an increasing effect across all service providers as bundles continue to grow.  

Service providers with both wireless and wireline interests (Verizon, SBC, BellSouth and Sprint) may have an early advantage in the rush to integration. Wireless- or wireline-only companies (Qwest, Nextel, AT&T, MCI, T-Mobile USA) can begin with resale of the other, but this may be not enough over the long term. And cable companies (Comcast, Time Warner, Cox, etc.) are just entering telephony and may need a wireless play to compete across-the-board.

W2I will proceed in multiple layers and at varied speeds. Let's view this evolution, starting with the outer customer-facing areas, working our way inwards towards full business operations integration.

The initial bundle launches have been cobbled together. Effective marketing programs to maximize the benefits are just beginning. The next steps will require significant marketing and operations expertise. The initial steps to integrate marketing and sales programs to develop effective, value-added services are underway. These begin with effective assessments of customers' current, emerging and future needs:

• Determining what customers want (By segment [consumer, business, wholesale], by type [mobility-led, wireline-led] and by preferred channel)

• Determining when various services should be added to the bundle

• Determining when unsuccessful services should be removed

• Developing pricing bundles to market and selling the evolving bundles

• Selecting and developing partner relationships (where needed)

• Developing customer self-service (Web-based) tools

 The first operational integration must begin with billing and mediation:

• Customers will not buy new services if they require complex billing arrangements--the objective should be integrated wireless/wireline billing at whatever the level of aggregation/disaggregation a customer may want

• Mediation should be added to include wireless accounts on wireline bills with a "discounting" overlay

• Billing and mediation services should be developed specifically for each element included in the integration

Next, effective customer care and customer support must be developed, including:

• "Cut-through" between call centers with some script inter-working, at a minimum

• Customer-care integration beyond "swivel chair" integration

• Integrated customer care centers with multi-media capabilities, especially Web-based

The remaining inner layers of integration may be applicable only where both networks are under common ownership. After having built integrated offers, customer care and billing/mediation, begin to look at driving increased profitability by examining how the networks are built, provisioned and operated as part of a plan to converge them into one network with multiple access methods. 

Physical integration of the networks is the next step. Integrate the network elements from the core out to the edge. Implement OSS/BSS systems to manage the integrated networks. The last, innermost layer is integrating business operations end-to-end. Integrate overall business operations to become more efficient and profitable.

So when operators are offering integrated wireless and wireline services to you, either as an enterprise or as a consumer (or in that limbo world of the always-connected professional), it is important that you should feel confident that the operator has described their approach to W2I and how it will work for you.

David H. Yedwab is Executive Vice President of The Eastern Management Group, Bedminster, NJ. He can be reached at dyedwab@easternmanagement.com.

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