Fixed-Mobile Convergence (FMC) and Unified Communications

Insight market research report:

The confluence of technological and market forces reshaping the US telecommunications scene today calls into question the future of the fixed line telephone, a fixture in 95 percent of US homes and businesses. In this study, INSIGHT examines fixed-mobile convergence (FMC), and fixed-mobile substitution, the tendency of telecommunications users to add wireless capability to landlines phones or, in the extreme case, drop their landline service entirely in favor of a cellular phone.

Telecommunications service and usage patterns have been shifting for some time as an increasing percentage of residential and business users switch voice calls to mobile networks: the number of fixed lines has been dropping at nearly a three percent rate for the past several years, even as adoption of mobile phones increases. Nearly 65 percent of Americans, or 195 million people, are expected to be mobile phone subscribers by the close of 2005.

The underlying dynamic of the shift in call volume from fixed to mobile is well documented. As users become more used to the convenience of cellular, long distance and local usage is shifting from wireline to cellular. The average wireline residential toll minutes of use (MOUs) have been dropping at a compounded rate of 15 percent since 2000, while wireless interstate MOUs per user grew at a compounded rate of nearly 40 percent during the same period. According to one FCC study, on the wireless side, the percentage of interstate residential minutes has increased from 16 percent to 26 percent of all wireless minutes. These changes in calling patterns are being reflected in ILEC line losses—a trend likely to continue.

Given such a dynamic, are Americans going to entirely abandon their fixed line phone for cellular calling? Can cellular carriers, using voice over the Internet protocol (VoIP) and leveraging wireless LAN technology, displace PBX manufacturers in the enterprise market?

The need for unified communications in our highly connected lifestyle drives Fixed-Mobile convergence towards the anywhere/anytime communication abilities.  VoIP continues to emerge as a new feature as wireless technologies such as WiFi and WiMax gain broader connectivity.