SERVICES CONVERGENCE - A NEW CHALLENGE FOR THE OPERATORS
SpeechSlides
1. Chiara Scimemi, WIND Hellas Telecommunications S.A.
Mobile Regulations & Competition Law Conference
The impact of convergence and Mobile Broadband penetration
FMC practices
Their effects on EU & national regulations
3. The extent of FMC throughout Europe: the FMC “cocktail”
• market players
• Fixed
• Mobile
• Integrated
• business models
• MVNO
• ESP
• DSP
• SP
• technologies
• Homezone
• WiFi
• Femtocell
• VoIP on mobile
Device
cv
Service
cv
Netw
cv
4. The extent of FMC throughout Europe
Country Integrated operators
Operators with FM offering
through MVNO or FVNO or
partnerships
Austria Telekom Austria, DT (Telering) One, UPC, Tele2
Belgium Belgacom, Mobistar Telenet, Tele2
DK TDC, TeliaSonera, Telenor
Finland TeliaSonera, Elisa, Finnet Tele2
France FT Neuf, SFR, Free
Germany DT, Vodafone, O2 Freenet
Italy TI, WIND Fastweb, Vodafone
NL KPN, Orange Tele2, UPC
Spain Telefonica, Orange Jazztel, ONO
Sweden TeliaSonera, Telenor, Tele2
UK Orange, O2 BT, Vodafone, T-Mobile
(IDATE 2008)
5. The extent of FMC throughout Europe
(E-Communications Household Survey, June 2008, European Commission)
6. (Broadband market trends in Europe, Analysys Mason 2009)
The extent of FMC throughout Europe: FMC prospects
7. Impact of FMC on operators
• The rationale of FMC
• Different starting points different impact
• Fixed operators only
• Mobile operators only
• Integrated operators
8. Impact of FMC on operators:
The positive/negative consequences of FMC for the mobile
industry
Increased marketing/subscriber
acquisition cost (SAC)
Churn reduction
(to indirect access)
Decrease in total fixed minutes
(shifted to mobile device)
Churn reduction/increase
in retail market
share through differentiation
Reduced price per minute
on existing mobile
usage in home/office
(origination and termination)
Increased marketing
Increase in total mobile minutes
(origination and termination)
Increase in subscriber
market share/churn reduction
Broadband
Fixed voice
Mobile voice
Impact on absolute EBITDA
(Profitability drivers for FMC, Analysys Consulting, 2006)
Integrated
Mobile only
10. Technological advancements promoting further FMC
FMC and levels of integration
• Bundling offers the lowest degree of integration
One service bundle
One bill
One customer service
Bundling
One number
One voicemail
One application set Service
Integration
One seamless experience
One device
Device
convergence
Level of integration
Low High
Value to
customer
Cost savings
Functionality/
convenience
Infrastructure/network convergence and back-office integration
•1
•3
•2
•4
Ultimately FMC should be able to deliver integrated services on one device across
different access networks and a converged core network
(Ovum 2008)
11. Technological advancements promoting further FMC
Technical architectures
• Main technologies (CTP, UMA,IMS/SIP, Femtocell..)
• Wi-Fi solutions: UMA vs SIP
• Dualmode vs Femtocell
Technology drivers
• Increased bandwith capabilities
• Advanced software and intelligence in network & equipment
• Increased use of IP technology
12. Technological advancements promoting further FMC
(UMA Today 2009)
Telecom Italia takes a SIP of FMC
December 6, 2007 — 7:59am ET
Telecom Italia, which had been one
of a handful of carrier supporters of UMA
for FMC services,
reportedly has dumped UMA in favor of using
an FMC offering based
on the session initiation protocol
13. Technological advancements promoting further FMC
Standardization
ITU Recommendation Q.1762/Y.2802
In a given network configuration, the capabilities that provide services and
application to the end user (…) regardless of the fixed or mobile access
technologies being used and independent of the user’s location. In the NGN
environment (…) it means to provide NGN services to end users regardless of
the fixed or mobile access technologies being used.
Implementation
14. Technological advancements promoting further FMC
“Femtocell will take over by 2013 with 62% of the market and
103 million FMC Access Points” (ABIresearch August 2008)
15. Predicting future modifications on regulations & competition
• Should regulation change with FMC
• How to regulate FMC
• Ex- ante or ex post
16. Predicting future modifications on regulations & competition:
Regulatory challenges of FMC
• Licensing
• Interconnection
• Numbering
• USO issues + emergency
• Pricing issues
• ….
• And even Taxation
at the core:
market definition &
relevant market analysis
17. Predicting future modifications on regulations & competition
Today…
Explanatory note, EC NGA Draft Recommendation:
(…) broadband services at fixed locations will also be supplied using other technologies, including
wireless networks. In addition, networks designed to supply mobile broadband services will also
potentially be available for use at fixed locations. The current expectation is however that the
services potentially offered over fibre-based networks will comprise a far greater (and higher) range
in terms of bi-directional bandwith
Working Document, EC Draft relevant markets Recommendation SEC
(2006) 837
In the future converged offerings between mobile and fixed service may emerge but this is not expected
to be a widespread phenomenon during the life of the revised Recommendation (…) as yet, there is
little evidence to consider triple or quadruple plays as a bundle that should be analysed as a single
market
… Which relevant markets cover FMC offerings?
18. Predicting future modifications on regulations & competition:
Homezone clearance
.
Country FMNP
Term.
Rate
Germany
02 genion Homezone, Vodafone
Zuhause, T-Mobile@home
yes FTR
Greece
Vodafone Homezone (with HOL)
yes FTR
Italy
Vodafone Casa, TIM Maxxi Casa
yes FTR
Portugal
Optimus Home, Vodafone Casa,
TMN Casa
yes FTR
Belgium, DK, France, NL,
Greece (Cosmote OnePhone)
No N/A
-Are fixed geographic numbers
allowed to be used by MNO
-What is the applicable call
termination rate for a call to a
F geographic number which
terminates on the M network
M 16/2003 analysis
Specific NRA decision
No intervention
Tacit
22. FMC: What next
The most recent modification of the framework
Explanatory Note, EC FTR & MTR Recommendation
“… with the evolution of fixed–mobile hybrid services and a move towards
convergence, a different regulatory treatment of fixed and mobile termination
rates raises a possible inconsistency issue. The regulatory model underlying
the FTR regulation assumes that operators will recover the cost of the local
loop via retail subscription charges, and that these costs are not included in the
FTR paid by other operators, including mobile operators. This is not the case in
mobile networks where the access network costs are largely recovered via the
termination rate. This needs to be considered in order to ensure that
competitive distortions do not arise and that allocative-efficiency concerns as
described above are addressed….
…If call termination fees remain at current levels, it might be that many mobile
operators and some fixed operators might choose not to evolve their networks
to IP based interconnection…”
23. FMC: What next
A technical challenge?
A regulatory challenge?
A market challenge !
