When Worlds Converge

As service providers seek to sell more and more services to their customer base through bundling, one offering that still remains largely stand-alone is wireless. That could change as more customers drop their landline voice connections — particularly if service providers more tightly integrate wired and wireless offerings. But when it comes to converged offerings today, operators have barely scratched the surface.

Today's fixed/mobile convergence (FMC) services fall mainly into two categories. On one hand are business-focused offerings, usually launched by companies that are primarily wireline operators, that enable employees' cell phones to integrate with office phone systems for productivity enhancements and cost savings. On the other hand are services from wireless companies that are based on femtocells or dual-mode Wi-Fi/cellular handsets. Those services are aimed at saving customers on airtime and increasing the in-home viability of wireless service.

No U.S. carrier has yet launched FMC services with the goal of increasing its multiplay penetration rate. Wireless carriers have taken an agnostic approach toward the broadband connectivity underlying their converged offerings, and wireline carriers have been equally agnostic in their approach toward the cellular services that their business offerings support.

But all of this could change as higher-bandwidth wireless services become available, providing the ability to extend not only FMC voice but also converged — and more tightly coupled — video and data services. Ultimately, users could, for example, begin viewing movies at home and continue watching them on portable devices in their cars. Potentially an end user's mobile device also could be a remote for home entertainment devices, controlling those devices within the home and remotely. For operators, tightly integrated offerings may not only yield higher multiplay take rates and reduce churn, they also may present an opportunity to create new services that can command a premium.

The rise of integrated wireless and wireline services also could open up a new chapter in the telco versus cable company saga. Telcos such as AT&T and Verizon, which have wireline and wireless businesses, could hold an advantage. But cable companies already have an edge in selling the triple play of voice, video and data. And three of the largest — Bright House Networks, Comcast and Time Warner Cable — plan to bring wireless into bundles through their impending investment in what some call “the new Clearwire.” The plan is to create a company out of WiMAX network assets owned by Sprint and by the wireless operator that already carries the Clearwire name.