Last year, UMA (Unlicensed Mobile Access) pretty much had the stage to itself when it came to near term convergence launches, providing a relatively simple way for operators to support fixed/mobile services using Wi-Fi as the link. However, now we see the advent of other options based around the SIP standard and the tiny indoor base stations, femtocells – the latter promising cellcos a means of providing low cost, homezone tariffs without dual-mode handsets or the compromises involved in letting users wander off the cellular network onto unfettered Wi-Fi. And as the alternatives to UMA gain traction, mixed real world results from early UMA deployments are intensifying the nervousness.
Two of the most high profile early adopters of UMA-based convergence services, British Telecom with Fusion, and France Telecom Orange with Unik, are reporting contrasting results. BT admits it is “not happy” with its level of adoption, though denies there is any thought of canceling the service, which has recently been extended to businesses in the UK and other territories, including France. BT is reported still to have only about 40,000 Fusion users, representing slow growth – although it boasts similar dual-mode penetration of its own installed base of home gateways, compared to Unik (which now has 140,000 users in a base of 4.8m Livebox gateways).
The key to more inspiring growth would be to divorce the dual-mode offering from the operator’s own home gateways, but of course that would remove one of the advantages of Fusion-style services – retaining loyalty to the carrier’s home services and, in BT’s case, stealing customers from the cellcos. It would also require far more investment in configuration and support. However, there is a real chance that the other great cheerleader for UMA, T-Mobile USA, will allow its service to run over any operator’s box, since its major objective is to attract and keep users on its cellular and Wi-Fi hotspot networks.
Orange does have some advantages over BT from having its own mobile network rather than just an MVNO with Vodafone, as the UK incumbent does. Notably, it can offer free on-net calls to other Orange mobiles, which helps enhance the already attractive pricing it promises (a result of France’s very competitive voice market). These factors help its figures look more impressive than BT’s, especially as the UK company is vague about whether its 40,000-strong subscriber base refers to homes or phones (Orange has 140,000 subscriptions but has shipped over 200,000 handsets, mainly in France. Current run rate is about 25,000 phones per month.
Orange’s statistics, unveiled last week with its UMA partner Kineto Wireless, also seem aimed to allay the chief fear that cellcos have about convergence – that users will transfer nearly all their traffic to Wi-Fi, reducing fees to the cellular system. It claims 15-20% of calls involve hand-off to the cellular network, higher than most analysts had expected.
Orange has pushed Unik, so far, mainly on the basis of reduced voice fees in this very competitive French sector. Yet BT says that Fusion is not really about cheap voice minutes, and that this has made it a complicated message to sell to consumers, especially as – launched way back in 2005 – Fusion made some of the mistakes of the first mover, including relying initially on Bluetooth instead of Wi-Fi, and experiencing delays in launching attractive handsets.
Steve Andrews, BT’s group chief of mobility and convergence, told Light Reading that the reasons for the slow take-up are device availability and a complex marketing message: “It’s not easy to explain [Fusion] to customers’ it’s not about cheap minutes.” BT added that it aims to refine the marketing to make the message clearer – that while Fusion does offer cheaper calls in the homezone or a BT hotspot or wireless city, it also delivers five times faster internet access than GPRS and better indoor coverage. The advantages from the convergence point of view – indoor access, value added services and faster data rates – are less obvious to consumers than cheap voice, but awareness of these aspects needs to be raised to drive home the true convergence story and ensure it does not become merely a price war with the cellcos.
Andrews says BT will introduce 10 new dual-mode Wi-Fi/GSM devices in the next 3-6 months and will start to sell these through UK phone retailer Phones4U. It will also launch a pre-paid version of the service.
Such moves will help, but BT’s convergence business model remains odd because of its lack of its own cellular network, removing the element of fixed line replacement that can drive other such offerings. In many ways, the telco is ahead of its time, selling convergence before the mass market understands what that entails, beyond cheaper voice calls.
With the auction of 2.5GHz spectrum delayed in the UK, BT has an even longer hiatus period before it becomes clear whether it can re-enter the wireless business in earnest. In the mean time, it needs to stave off the increasingly aggressive efforts of the cellcos to provide HSDPA-based data and convergence services through interim measures like digital cities and home gateways. The corporate market will provide richer pickings, especially as BT increases its international reach, but without a cellular arm or a WiMAX license, the company will continue to struggle in the consumer fixed/mobile sector.