By: Adlane Fellah - Mavavedis, Inc.

To understand the current and past tumult of the BWA market and the emergence of WiMAX, one first needs to understand the drivers for broadband connectivity and the overall market trends. There is greater pressure for vendors to sell equipment at lower prices, with more ease-of-use features and non-line-of-sight technology. These requirements, while necessary to the growth of the market, do not guarantee a sale.

There must be evidence that the applications and services that end-users desire will be there to gain market share and increase service provider revenues.

Context for Fixed-Mobile Convergence

Maravedis is continuously monitoring developments in the wireless space. Traditionally we have covered the specialized fixed wireless access, including access and backhaul applications delivered by point to point (PTP) and point to multipoint (PMP) technologies.

The fixed wireless access market is a good example of evolution towards the so-called Fixed-Mobile and IP convergence. WiMAX promises to enter the mobile wireless market traditionally served by cellular-type solutions. Traditionally, BWA has been a technology designated to fill the needs of last-mile connectivity in underserved areas and for backhaul.

Now wireless is becoming a big melting pot - with various technologies either committing to meet the always evolving needs of mobile users or targeting market niches not well covered by other technologies. This report has thus evolved to analyze this new complexity, cover the broader aspects of mobility and portability, and provide a deeper look at the emerging mobile multimedia applications driving the need for higher bandwidth.

The emergence of WiMAX and other broadband wireless technologies is occurring in a context of changing business models and forces in the whole telecommunications world. Both wireline and wireless operators are facing new challenges. Some of these may be addressed only through new technology.

The latest figures from Internetworldstats.com (which compiles stats from Nielsen/NetRatings, local NICs and the ITU) put global Internet connectivity at just over one billion people as of March 31, 2006 - which works out to a global penetration rate of just 15.7%. It also means broadband accounts for over 20% of the world's Internet connections.

While reduced revenues from traditional services are increasingly pushing operators towards broadband and mobile offerings, they are also under pressure to reduce prices for these new services. There will still be strong growth in the Asia Pacific telecom services market over the next three years, thanks to the rising adoption of 3G services, broadband and cellular in countries such as India and Indonesia. In time, service providers are likely to migrate to flat-rate or capped plans, as the cellular market matures and the rate of broadband adoption increases.

Unlimited data download packages offered by broadband service providers are becoming increasingly popular in the Asia Pacific, and flat-rate schemes will find acceptance among 3G service providers that offer transparent and user-friendly bundled packages comprised of voice and data services. To take advantage of these developments, operators need to offer innovative packages so as to overcome the increasing threat of mobile technologies, pricing concerns and competition from alternative voice services.

Although some countries have witnessed a rise in the number of fixed lines, the impact of mobile and voice-enabled options is forcing a decline in traffic minutes, and subsequently, revenue in fixed voice solutions. While the growth of broadband solutions aids in stabilizing the decline in fixed-line sales, it also drives VoIP services. This would lead to a greater number of fixed-line connections, but also a slump in the revenue of traditional fixed-voice revenue.

Apart from implementing fixed-mobile convergence, broadband is perceived as the most promising means for service providers to regain the share of lost fixed-lines and sustain core revenues. Rising end-user migration towards broadband services and the enormous growth opportunities in new markets such as India are set to boost revenues of internet-based services.

In a 2006 study of consumers, KMPG found that 37 percent of North American respondents would not pay a premium charge for converged services, and 20 percent indicated they would be willing to spend only 10 percent more for premium services. In a context where telecom executives expressed high optimism regarding revenue growth, that growth may not come easily, as convergence and intensifying competition are fueling a relentless decline in prices for voice, broadband, video and packaged services.

Getting the Most Out of FMC

Mobile operators are facing a challenging year in 2006, as competitive pressure saw average revenues weaken in 2005 and churn creep up. Today there's not a single cost-effective technology that can provide broadband data, mobile voice and data, and fixed-line voice needs for the consumer and enterprise markets.

As consumers, we want the best of all worlds - new, high quality, low-cost services but without the complications and learning curves new technologies can bring into our lives. Meanwhile, operators want to reduce costs and churn while finding new service revenues to balance falling voice revenues. FMC can address both consumers' and operators' wish lists through its linkage of various optimized consumer services in value added ways. For a number of years, we've seen Wi-Fi enabling data applications in portable products such as PDAs. Wi-Fi mobile phone deployment was limited until just recently because of cost and power-consumption constraints. In 2003, the demand for VoIP in enterprise handsets increased the deployment of Wi-Fi-enabled mobile phones, which in turn sparked more operator and manufacturer interest in standards-based FMC technologies. UMA will be the first standardized implementation of FMC, bringing VoIP to the broadband-equipped home. The evolution of standards-based FMC technologies will continue, bringing SIP-based systems such as IMS (IP multimedia systems) that will integrate a wider range of services - such as video and audio applications, push-to-talk, billing and presence management - in addition to VoIP.

For consumers, FMC brings a single set of services offered across any device - landline or wireless. This will bring better coverage, simplified billing, more efficient and cost-effective communications and the promise of new and seamless service offerings that simplify complex usage scenarios. Given that consumers' worst cellular coverage is typically at home, the lack of in-building penetration is a common source of consumer dissatisfaction, which often influences the consumer's choice of service provider. Leveraging home broadband connections to provide mobile VoIP will eliminate indoor coverage gaps. FMC has the intelligence to use a number of schemes (network or terminal-based) to determine the best voice call or data quality at a given location. It also provides seamless mobility between networks (Wi-Fi or cellular) to route the call to the best quality or least-cost network, depending on consumer preference.

For operators, FMC offers new ways to improve customer satisfaction and maximize revenue through unified services and billing. These new benefits should translate into increased customer loyalty towards the service provider. FMC brings new value-added SIP based unified messaging and calling services, pervasive in-building coverage and lowered costs. Quality of Service (QoS) comes into play as well, as operators can differentiate and monetize their VoIP offerings through QoS.

About the Author:
Adlane Fellah, MBA, is CEO and founder of Maravedis, a world-leader in market research and analysis, specializing in WiMAX and broadband wireless markets. He is a leading industry analyst who has authored various landmark reports on WiMAX, broadband wireless and Voice over IP. He is a frequent speaker at leading wireless events and a contributor to various prestigious portals and magazines covering the broadband wireless industry, such as Telephony Magazine, WiMAX Trends, and WiMAX.com.

He has been a member of the Program Advisory Board for the World WiMAX Conference since 2004 and a member of Word Communications Association International and the Broadband Wireless Association. Prior to founding Maravedis, he held various positions at Harris Corporation in charge of market intelligence and business development for several product lines.