Europe Takes the Global Lead with Commercial FMC Launches

Thanks to its liberalized mature markets and tough competitive environment, in 2006 Europe took the lead in deploying fixed-mobile convergence technologies. Unlicensed mobile access (UMA) and dual-mode WiFi GSM services have now been launched in a dozen markets, with the majority of commercial rollouts taking place in France, Germany, and the UK. For example, the first positive results delivered by Orange for its Unik service in France are mixed with the first failures as Germany’s Deutsche Telekom cancelled its T-One fixed-mobile convergence service. There are key lessons to be learned from the first successes and failures, our most important conclusion being that FMC can be made to work.

FMC in Europe: Tough Start and Slow Going, but Firmly on Commercial Track

During 2006, FMC services were launched in a number of European countries—UMA in the UK, France, the Netherlands, Denmark, and Italy; and dual-mode WiFi-GSM services in France, Germany, Spain, and Scandinavian markets. The initial uptake of the services has been low: at the end of 2006 there were fewer than 200,000 FMC subscriptions in all commercial launches, which corresponds to less than 3% of triple-play service subscriptions in these markets. The results are unsurprising: both UMA and dual-mode are disruptive technologies that require a handset replacement and a purchase of a new home gateway. More important are the lessons learned from the first launches.

FMC Has to Be Competitive, but Can Be Made to Work

France’s Orange is one of the providers which is starting to see positive results from FMC, thanks to its aggressive push of UMA. Orange has now launched its Unik/Unique service in France and the Netherlands, and is preparing to launch it in the UK and Spain. At the end of 2006, it had 69,000 subscribers and by the end of February 2007, the number had reached 100,000. This number is still relatively low, but it is important to note that 15% of Orange’s new customers are joining thanks to Unik, and their usage is growing: the total traffic of Unik subscribers at home has increased three-fold.

Exhibit: Orange Unik: Good Start for UMA

Source:  Pyramid Research, MNOs.