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Industry News

Technology Does Not Matter!

April 6, 2007
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These are the words that can label you as a non-believer and a heretic. For the telecom industry, thoughts like this must be exterminated before they spread like a virus.


Yet, recently an example of how little technology matters surfaced. Deutsche Telekom (DT) killed its Fixed-Mobile Convergence (FMC) service.

The FMC service, named T-One, was offered by the wireline division of Deutsche Telekom in Germany. Since its introduction in August 2006, the WiFi/GSM service attracted only 10,000 subscribers.

The reasons for the failure range from high prices, poor marketing, minimal features and the lack of alternative handset models. Competition from the cheaper T-Mobile Fixed-Mobile Substitution (FMS) service is also blamed.

The @home service bills cellular calls made from home as fixed-line calls. In-Stat Research has consistently found strong consumer interest for both FMC and FMS services.

Over 57 percent of broadband households in North America have a strong interest in Home/Zone FMS services. Nearly 40 percent favor making VoWLAN calls from a mobile handset. Yet, consumers indicate their interest in FMC/FMS services is driven by greater convenience and value, not technology.

Deutsche Telekom lost sight of this fact when they introduced its FMC service. Other FMC service offerings sporting premium prices or nifty new roaming technology will likely follow in DT’s path. Ultimately, service providers will understand that the value of convergence is simplicity. The way to increase ARPU is by giving customers what they want, regardless of technology.

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