Technology Assessment: FMC – Fixed Mobile Convergence DeLynn Bettencourt – delynnb@gmail.com Kevin Cheng - kkwcheng@gmail.com Yuval Elshtein – elshtein@haas.berkeley.edu Qintao Zhang - qtzhang@berkeley.edu

Overview Trends in Spectrum Fixed Mobile Convergence Technology Industry Overview Proponents of technology Industry reaction Strategic considerations

Source: Federal Communications Commission Spectrum trends Source: Federal Communications Commission

FMC Source: Cisco

Multi-Mode Mobile Device Diagram of Multi-mode Mobile Device Usage Office (IPBX/WLAN) Coffee Shop (Hotspots) Airport (Hotspots) Driving (Cellular Network) Home (Wi-Fi or local wireline provider) USER

Multi-Mode Mobile Device Diagram of Multi-mode Mobile Device Usage Office (IPBX/WLAN) Coffee Shop (Hotspots) Airport (Hotspots) ? Driving (Cellular Network) Home (wi-fi or local wireline provider) USER

The Promise of FMC Single phone and phone number for all locations Able to choose the lowest rate and SEAMLESSLY transfer calls to take advantage of it Have decent cell reception indoors

Multi-Mode Mobile Device Examples of Multi-mode Phones Motorola CN620 dual-mode phone (not pictured) - roam between cellular and 802.11 networks Works with about 75 per cent of access points from Avaya and Proxim Corp. Gigaset SL75 WLAN VoIP cordless telephone for the home or office UTStarCom F1000 WIFI VOIP Phone

Industry Overview Average Monthly Household Telecommunications Expenditures By Type of Provider Average Monthly Household Telecommunications Expenditures By Type of Provider Year Local Exchange Long Distance Total Wireless Provider 1995 $30.00 $21.00 $51.00 $7.00 $58.00 2003 $37.00 $10.00 $47.00 $41.00 $88.00 Source: Calculated by FCCIndustry Analysis and Technology Division staff using survey data from TNS Telecoms

Industry Overview Top US Wireless Network Operators Top US Wireline Network Operators Company Name Annual Sales (2004) Venture of Cingular Wireless 19.4 B$ BellSouth (wireline) and SBC Communications (wireline) Verizon Wireless 27.6 B$ Verizon (wireline) and Vodafone (UK wireless) Sprint/Nextel 27.4 B$ Sprint (US Wireless) and Nextel (US Wireless) T-Mobile 9.3 B$ Deutsche Telekom (German Wireline) Company Name Annual Sales (2004) Verizon 71.2 B$ AT&T[2] 30.5 B$ Sprint/Nextel 27.4 B$ MCI 20.6 B$ Top Cable and Satellite Companies (Ranked By Sales) Company Name Annual Sales (2004) Number of customers Comcast Cable 19.3 B$ 21.5 million - 7 million broadband customers Directv 11.4 B$ 14 million Time Warner Cable 8.4 B$ 10.9 million – 4.1 million broadband customers Partnered with MCI and Sprint in order to offer Digital Phone, a VoIP telephony service

Handset Manufacturers Pushing FMC Handset Manufacturers Company Name Annual Sales (2004) Nokia 39,6B$ Motorola 31,3 B$ Samsung 9,2 B$ Siemens 93,4 B$ Sony Ericsson Mobile 8,9 B$ Fairly inexpensive to add Wi-Fi capability to a handset, FMC is a truly disruptive technology that provides both cost savings and convenience to the customer

Affected players Wireline Cellular Service Providers Usually the ones who supply high speed Internet access to businesses Interface to wired service while at home Cellular Service Providers Reduce customer churn Cingular, Verizon, and Sprint/Nextel are reselling access to a 3,300+ hotspot network operated by Wayport, Inc.

Affected players VoIP Handset Manufacturers Skype, a major VoIP provider, will have its service installed on the i-mate PDA VoIP pureplays will need strategic partnerships to ensure they remain in the FMC network Handset Manufacturers Should partner with service providers to ensure rollout of FMC - “Avaya To Resell Dual-mode Motorola Handset For Cellular, WLAN Networks”

Affected players Handset OS Meanwhile, Microsoft is partnering with Sleipner-Calypso to provide seamless transfer capability using software “Kineto Wireless, has joined the Symbian Platinum Partner program and will port the Kineto UMA Client Software to the Symbian OS platform”

Strategy Issues System Effects: Lock-in Network Effects? FMC relies on the interworking of several components: the handset, the cellular network, the VoIP technology, the WIFI network, among others Lock-in Providing partial call rollover (transition only to authorized networks) might be employed by incumbent cellular carriers Network Effects?

Strategy Issues Standards 802.11x Seamless transition standards are crucial Kineto wireless ( a startup supplier of convergence hardware ) was able to sign up most of the major vendors to the UMA (unlicensed mobile access) standard, eventually becoming 3GPP (3rd Generation Partnership Program) British Telecom Cingular Ericsson Motorola Nokia Nortel Networks O2 Research in Motion Rogers Wireless Siemens Sony Ericsson T-Mobile US

Questions? FMC – Fixed/Mobile Convergence (also called WCC - Wifi/Cellular convergence And Cell-Fi) AP - Wifi access point IP PBXs – Digital PBX system that uses VOIP Wi-Fi WLANs  - inside the office, wireless phones that use the office WLAN VoWLAN – Combination of IP PBX and WLAN to have an in-office portable phone (also called Voice Over Wi-Fi) Wireline networks - Use wires and cables to connect customers’ premises to central offices maintained by telecommunications companies. Wireless networks - Operate through the transmission of signals over networks of radio towers. WiMAX — World Interoperability for Microwave Access, also known as IEEE 802.16 — is an emerging global broadband wireless standard LEC – Local Exchange Carriers. Wireline service providers that connect a voice call locally VOIP – Voice over IP. Voice communications are normally split up and reassembled by telecommunications companies’ switching and routing equipment. Voice over Internet Protocol splits up the conversation into packets in the telephone, transmitting the conversation over the Internet.