Fixed-Mobile Convergence Revenues Will Account for 6% of Traditional Communications Spend in 2009

Global

Pyramid Research: Fixed-mobile convergence (FMC) revenues will reach $80bn in 2009, or 6% of total communications spend worldwide. Fixed-Mobile Convergence: Creating Value with Successful Business Models credits converged service revenue growth to value-added services and the migration of digital content from broadcasting networks to new converged networks. Converged services adoption to accelerate only after 2007, as more consumers are migrated to convergent platforms.“Key drivers of FMC include fixed-mobile substitution, industry consolidation, and strong uptake of VoIP services. End-users in the traditional fixed and Internet access segments will continue to spend less, as competition puts downward pressure on prices and subscribers trickle away to mobile networks. Fixed providers are most keenly aware of these trends as fixed-mobile substitution slowly gains ground. For them, a prompt launch of FMC networks promises to cut CAPEX and OPEX, and offers an arsenal of new value-added services that will improve loyalty and increase revenues.

For mobile operators, launching 3G services takes priority over FMC. Mobile voice services are already commoditized and the migration to new IP-based convergent networks and platforms is only a matter of time; fixed-mobile converged services are not indispensable to fixed-mobile substitution, but would certainly accelerate it, however, will take place only over a medium term timeframe, as mobile operators are banking on fixed-mobile substitution to differentiate their offers and lower churn rates.

Fixed-Mobile Convergence: Creating Value with Successful Business Models Publ 20050602