Mobile-Landline Convergence Group Grows
By Carlo Longino, Wed Jun 09 23:15:00 GMT 2004

BT last month started an alliance to promote fixed and mobile integration, and it's reportedly growing. But what's in it for mobile operators?

The Financial Times has reported that BT says it's in talks with a number of mobile carriers to join its fledgling group, along with fixed providers Brasil Telecom and Korea Telecom. BT is something of a pioneer, having recently announced a project with Vodafone that lets customers' mobile handsets switch between Vodafone's UK mobile network and the BT fixed-line network when they're at home or in the office over a Bluetooth link.

It's understandable that landline telcos would want to get in on the act to stem the defections they're seeing to mobile networks, but it's hard to understand just what mobile carriers see in the alliance. Indeed, Vodafone turned down an invitation, and two other mobile carriers, Japan's NTT DoCoMo and France's Cegetel, which is joined with SFR, denied they were members.

Clearly fixed operators like BT are trying to influence how emerging technologies like mobile and VoIP will affect their businesses, a slightly ironic move given many fixed telecoms firms' spin-offs and sales of their mobile businesses over the last several years. Linking up with mobile operators to offer a joint product keeps them relevant, in the loop and somewhat in the money.

But what do mobile carriers have to gain from such link-ups, given the success they've been having luring customers away from fixed use? Perhaps they're following the old adage that if your business is going to be cannibalized (in this case by people using fixed lines at home or work due to their lower cost), it's best to cannibalize yourself (by sharing revenues rather than losing them completely). Or perhaps they're looking ahead to integrating their mobile data services with faster fixed lines -- something at least one carrier is taking seriously. Offering users a seamless data connection, choosing the fastest pipe available, could be a tasty proposition.

If this is the case, the Alliance's role becomes clearer as there are a lot of technological hurdles that must be overcome to offer such a service. One analyst likens the situation to the problem mobile carriers and equipment manufacturers had in working out the kinks in handoffs between 2G and 3G networks. While typical data use generally doesn't require the same type of constant, uninterrupted connection as a voice call, handoffs must be made as transparent as possible, or there's little benefit in converging networks.