User group attacks mobile operators at Cannes

26 Feb 2004

CANNES – As an antidote to the enthusiasm for fixed-mobile convergence at this year’s 3GSM Congress in Cannes, the director of the International Telecommunications User Group, Ewan Sutherland, launched a stinging attack on mobile operators, questioning the part they might play in an evolving communications landscape.

“Mobility is not about providing services in homes and offices. It may not yet be able to compete with fixed networks in terms of price and services,” warned Sutherland at a conference on strategies for fixed-mobile convergence. “Mobile data prices are too expensive. Customer care is still better on fixed networks than mobile and there have been years of complaints about the cost of calls to mobile networks,” he continued.

He also criticised the lack of transparency in tariffs “that you need a PHD to understand” and what he saw as the inflated cost of GPRS services. “By the time the prices come down, Wi-Fi will be further out there,” he said.

He believed the best chance that mobile carriers had of adapting to converging services was to let an MVNO (mobile virtual network operator) do the job for them.

Kyriacos Sabatakakis of Accenture offered an alternative view. “Mobile operators have reached saturation point so they’re trying to introduce the traffic that their subscribers are using elsewhere,” he said. He then gave reasons as to why they might be successful: “They know their clients, they authenticate them every time they come on their networks; they are developing mobile payment solutions. They are positioning themselves very strongly to take over the convergence space.”

Conference chairman John Auerbach of Highland Capital Partners reminded the packed auditorium that fixed-mobile convergence was not a new idea. “Very few issues have had as much promise and as many failures,” he said.

He cited BT Cellnet’s 1997 attempt to expand its market with its OnePhone offering, a service that was subsequently dropped. The fact that it was a “hot buzzword” again reflected the drive that both fixed and mobile carriers have to capture more users and revenue from their competitors. Evidence of a resurgence of interest included BT’s move into the MVNO space and O2 trialling a voice over IP solution.

Ewan Sutherland added a further note of caution for carriers by pointing out that it was not a “win win” situation for everybody. “Convergence means that someone is going to lose,” he warned.

The wireless standard 80211 and Bluetooth were cited as the transport mechanisms that now enabled mobile and fixed to merge and all the speakers agreed that IP telephony was the most significant development, offering an affordable route into converged communications, delivering more services at a lower cost. Such will be its impact that Sutherland expressed the concern of members of the financial community that believe some fixed-line operators will be killed off unless they can significantly supplement their revenues from broadband.

By Ian Campbell