CONVERGENCE A LA CARTE

The convergence of wireless and wireline networks will be one of several predominant themes at Supercomm 2005, but it will play out in a dizzying array of options and choices.

While the wireless industry has baked a grand convergence concoction in IMS, or IP multimedia subsystem, technology, wireline service providers are now able to nibble at the edges of convergence — and perhaps bite off large chunks — using technology that integrates services more simply at the software or device level.

“I think most people see fixed-mobile convergence as happening, with the ultimate being an IMS,” said Joe McGarvey, analyst with Current Analysis. “But from the service provider standpoint, what's out there today is a chance to get your feet wet. What I've heard from a lot of vendors is that is how they see fixed-mobile convergence starting, is from handset.”

Nortel Networks is positioning its Multimedia Communications Service, a session initiation protocol softswitch, to serve as a signaling gateway to a home location register for the purpose of providing one-number service that allows customers to roam onto a wireless local area network in the home and onto a cellular network when leaving.

“We've had plans to do this laid out for a year-and-a-half to two years,” said Rob Wood, vice president of cable solutions for Nortel. “One of the long poles in the tent is having dual-mode handsets. That's been one of the things that is holding us back. This is a stepping stone to IMS, an example of one of the services that would come out of such a unified architecture.”

Those handsets are starting to come into the market this year, although major volume isn't expected until 2006. Alan Stoddard, general manager of converged multimedia at Nortel, said 6 million Wi-Fi/wireless phones shipped this year, and 50 million or more will ship in 2006. That's still a relatively small percentage of the wireless market.

The early devices are more expensive than traditional cell phones and look more like PDAs, which is one reason the business market for this kind of convergence is expected to take off more quickly.

LongBoard is one of a group of new players focused on the fixed-mobile convergence space, and it sees real opportunities for wireline service operators — both telco and cable — to attract enterprise customers wanting to better serve mobile professionals, said David Schwartz, director of marketing.

“Today the wireline players own the enterprise market and those relationships,” he said. “It's a natural fit for them to offer the technology that lets businesses make their employees more productive.”

The LongBoard approach uses client software on the handset to monitor the signal strength of both Wi-Fi and cellular networks and signals the application server which network is most suitable for a call. The client software also offers IP phone capabilities so that roaming business users can take advantage of their business features.

Fixed-mobile convergence is also a natural step for businesses looking to save money by moving to voice over IP (VoIP), said William Markey, general manager of RelevantC, a management consulting firm in telecom.

“The priority market is really the enterprise because it has larger addressable revenue,” he said. “Enterprises will add more influence and control over the wireless phones their employees use. They haven't had that — employees buy the service and the phone and expense it. But if you switch to VoIP for fixed traffic, you can shift to VoIP for mobile as well. Real dollars can be both saved and made at the enterprise.”

NewStep, another industry newcomer, is also aiming for the business market, using existing network signaling systems to not only enable fixed-mobile convergence but also the transfer of calls, already in progress, from one phone system to another at the push of a button.

“From the business customer's viewpoint, today's mobile phone is a stranded island,” said Mark Verdun, vice president of partner programs at NewStep. “This lets a mobile professional manage all calls more efficiently.”

There will also be an explosion of options for consumers who want to tie their mobile and fixed services together. The technology can be as simple as a small plastic device that plugs into a home power outlet, Markey said. He points to an Israeli company, Clariton Networks, which manufacturers such a device for enabling wireless phone usage in the home, either via cellular network or Wi-Fi, which is then transmitted over a cable TV network.

“You are essentially creating a pico cell within your home, and the calls don't sound as bad as cell phones sound today inside the home,” Markey said.

He also points to companies such as BridgePort Networks and Kineto Wireless, in addition to LongBoard, as offering near-term fixed-mobile convergence solutions.

“None require capital-intensive overhauls or upgrades to the network,” he said. “They are software solutions that work with existing systems. An operator would buy their systems, put them in the back end, then over the air deposit a cookie in the cell phone — the client — which allows you to initiate a call in a Wi-Fi hotspot and keep walking and talking over a mobile network.”

If there is a major stumbling block to the use of all this technology to enable fixed-mobile convergence, it is the business case confusion. Although the wireless industry took the first steps with the development of IMS as an industry standard, it is the wireline operators — telco and cable — that will gain the most from early stage convergence.

“A large percentage of voice that is done at the enterprise is people on the cellular network within range of desk phone,” McGarvey said. “This is a way for the wireline guys to get traffic back on their network.”

Given that a number of the largest wireline operators also own wireless operations, there is also a case to be made for the reduction in transport costs.

“What most people gloss over is self-cannibalization — if you already own fixed and mobile assets — you can justify this as load balancing,” Markey said. “All you are doing is moving traffic to the lowest-cost network. If you don't own both assets, if you are a cable operator without a mobile story or a mobile-only operator that needs a fixed offering, then you have to partner, and then the business case becomes a bit more complex.”

Cable and wireless partners will have to determine tricky issues of customer ownership and revenue sharing, Wood said. “The cable industry is positioned to move quickly on this,” he said. “When we've talked with them and explained how the technology worked, they weren't interested in just being the pipe for the service — they want that service to carry their brand name.”

Wireless service providers, meanwhile, have been working toward fixed-mobile convergence with the development of IMS and don't want to be cut out of that process or lose minutes-of-use in the meantime to Wi-Fi networks set up in the home or in other public spaces such as malls, airports and convention centers.

The eventual implementation of IMS will create new opportunities for service revenue that exceeds just minutes of use, McGarvey said. “Eventually, it will happen for the wireless guys — minutes is not the money-maker here,” he said. “IMS offers new services and data features.”