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Fixed-mobile market to hit $28bn by 2011

But FMC 'more exciting for operators than consumers'

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More than 92m people will have combined their mobile and fixed-line handsets by 2011, as landline operators fight the threat of mobile substitution.

That's according to a new report published by Informa Telecoms and Media, entitled Fixed Mobile Convergence, which predicts that the fixed mobile convergence (FMC) market will be worth $28bn within five years and will comprise three per cent of overall telephony subscriptions.

The report said fixed operators such as BT will roll out FMC services aggressively in an attempt to counter the threat of fixed mobile substitution (FMS), whereby people use mobiles exclusively and abandon fixed-line services completely. On the other hand, mobile operators will be slow to offer FMC services.

"Europe is dominated by mobile operators who want to drive revenues by encouraging fixed-mobile substitution," Informa Telecoms and Media senior analyst Paul Merry told ElectricNews.Net.

However, in the long term, mobile companies are expected to pursue a strategy of fixed-mobile convergence to convert landline users that they had not already signed up for mobile phones.

The adoption of FMC will be slow over the next five years, because consumers do not perceive the service to be necessary and have no motivation to buy expensive dual-mode phones.

In fact, FMC technology is more exciting for the operators than it is for consumers. FMC allows operators to route calls across the least expensive network and facilitate a single billing system to track subscribers' mobile and fixed-line calls.

FMC will be more successful in the corporate sector, where the latest IP PBXs are able to route calls through the company's data network for free. The calls are then terminated at the most appropriate device, whether that be landline, mobile, BlackBerry, or PC soft-phone.

Informa's report also forecast that by 2011 sales of dual-mode handsets will account for five per cent of all handset sales, with more than 47m dual-mode phones being sold every year.

Copyright © 2006, ENN

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