Fixed Mobile... Pretendence

We hear a lot about Fixed-Mobile Convergence around telecoms people. I've been following it with a lot of personal interest since I led the team to build the world's first Fixed-Mobile converged telecoms service in Finland in 1996 (hey, thats 10 years ago, wow, time flies...  Best wishes to all who were with us with HPY, Finnet, Radiolinja, 999 etc - and in Finnish to my friends: Terkkuja 999-Tomilta!)

Back then fixed telecoms was the giant, mobile almost only a nuisance, even in world-leading mobile penetration country Finland, and the whole project had a bit of the feeling of a gimmick, even with our management at the time. Did we really need to even bother to converge with the tiny amount of business in mobile. In early 1996 Finnish mobile penetration was under 30%. How times change.

Today 2.2 Billion mobile phone subscriptions worldwide dwarf the 1.2 Billion fixed lines. The total amount of revenues of mobile teleocoms shot past fixed over a year ago and today all the attention is with mobile. But that old topic of Fixed-Mobile Convergence still hangs around. And for good reason. We see all kinds of interesting technical ideas like VoIP Voice over IP ie Skype, Vonage etc, on WiFi phones, etc.

So we find a most interesting OECD study reported by our friend, Steve Jones of the3GPortal.com. The OECD study reports that out of the 30 countries in the OECD, already in 23 countries, the cost of mobile calls is LESS than the cost of fixed (wireline/landline) calls ! Amazing. Leading the countries where the difference in Mobile's favour is the greatest are many predictable countries, starting off with Finland (of course) and Portugal, Austria, Denmark and Sweden - all quite to be expected. But also at this end of the scale, some surprises: Hungary, USA and Canada?

At the other end, only 7 OECD countries have mobile calls still more expensive than fixed line calls, and the most expensive of these, counting from the worst are: Spain, Japan, Korea and Germany.

Now to think about the bigger picture. Some who comment on our industry still like to think that mobile is too expensive. That there is an economic rationale for selecting a fixed line call. To wait until you get home to make calls then from the cheaper option. This is no longer even relevant, as the facts no longer support this kind of thinking.

And we have many other interesting phenomena that have been recently reported. That 80% of all voice calls in Japan now are placed from indoors. And 70% of mobile data is consumed: indoors. In Finland 50% of homes have abandoned the fixed line altogether, and over 30% in Portugal. There are 1 Billion internet users - but already 25% of those access via mobile phone, not via PC. 1 Million people have plugged 3G modem cards to their laptops - and these will mostly have abandoned a paid WiFi subscription when taking the 3G modem option.

I do understand the concept of Fixed-Mobile Convergence. It is a bit like running after a train. The mobile telecoms industry ran past the fixed one. It no longer really cares too much about trying to converge with the dying breed, that of fixed telecoms. But it is the fixed telecoms side which is near-desperate to find fixed-mobile convergence, as a lifeline. BT wants the Fusion (formerly Bluephone) to work. BT made a big blunder selling off its GSM/3G operation, O2, and is now desperate to get back into mobile, through this and the MVNO deal with Vodafone.

But why would a Vodafone or any other mobile operator really care to attempt to converge - with fixed. They can pursue convergence with the internet, and convergence with the media/TV, etc. But fixed-mobile? it is not convergence, it is pretending. "Fixed Mobile Pretendence" if you will.