British Telecom Drops Fusion Fixed-Mobile Convergence System; Is FMC DOA?

from the next-time-don't-be-so-optimistic dept

British Telecom has pulled the plug on its Fixed Mobile Convergence (FMC) offering, Fusion. In 2005, the concept of Fixed Mobile Convergence was red hot. FMC involved using a Wi-Fi or Bluetooth radio in a cell phone to transfer calls back and forth between the cellular network, and a broadband-based network in the home of office. Ostensibly, this would be appealing to subscribers because it would allow them to access cheaper VoIP tariffs, rather than cellular minutes, on the broadband network -- thus saving money. However, we were initially skeptical of the appeal of this complicated product because last we heard, many subscribers don't even use the mobile minutes they have bought each month. The complicated FMC phones cost more, use more battery, and offer very little by way of choice.

Meanwhile, carriers that did offer the service (Orange in France) had early success, but were then easily matched (warning: pdf!) by mobile carriers without FMC (Bouygues Telecom) that simply lowered their tariffs on calls made from the home cell tower. But in 2005, I got over-enthusiastic about British Telecom’s Fusion offering, because if FMC made sense for any carrier, it was this one. BT is the incumbent provider of broadband services in the UK, already offers the consumer premise equipment to subscribers, owns an outdoor Wi-Fi network, but does not own a mobile network. They pay wholesale rates to Vodafone and sell mobile as an MVNO. Thus, any traffic they can get off of Vodafone and onto the DSL would save real costs. Unfortunately, the subscribers didn’t see how lowering the costs for BT was particularly important to them. No surprise, really, since Mike noted that BT failed to pass over the lower costs to the subscribers. But in conclusion, if FMC failed at BT, where it fit best, it will be difficult to make a business case for it elsewhere.

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