Like power hitters sitting on juicy fast-balls, carriers have the chance to hit one out of the park and capture the lead in the converged wireless/wireline services game, if they time things just right.

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If they don't, there's a chance a fiercely competitive quadruple-play services game of video, data, wireline and wireless voice--fourplay in cable parlance--will break out.

The pressure is on carriers to connect with a converged wireless/wireline pitch, as cable roots around for a partner or, less likely, wireless spectrum of its own. RBOCs such as BellSouth, SBC and Verizon, with their connections to wireless providers like Cingular and Verizon Wireless, have the early advantage, but the timing's finite.

What worries some observers and delights cable players is that carriers seem more obsessed with taking on cable's strength by developing video entertainment and less enamored with bulking up their inherent advantage in a seamless voice space.

"Wireless is going to be a big deal," said a senior technology executive with a top-tier cable company. "[Carriers are still] looking at it and I thank them for that. They're our best friends."

Verizon, for instance, when asked about its seamless convergence plans responded by e-mail: "Not sure there's much going on there. Real focus here has been FTTP and our Fios broadband and soon, Fios TV over the fiber."

In other words, even with name brand recognition that could lock in voice customers and hold off cable encroachment, Verizon prefers to develop product to compete with cable's video strengths.

There are, of course, good reasons why the telephone industry is moving slowly into the seamless convergence space.

* Cultural differences between wire-line and wireless families make it difficult to develop business plans;

* A dearth of handsets applicable for a wide-ranging consumer market-place;

* No true standardized infrastructure to bridge the two network elements, although most say IMS is ready enough for the task.

Squandering Runs

Telcos may think they have time to work out the intricacies. Cable doesn't have a branded wireless play and, for now, doesn't have wireless friends that might want to provide the missing link. That could change any day and might even have changed by now.

"I think the cable industry wishes it had looked more than it has at its five-and 10-year [plans] around acquiring mobile access and understanding that ultimately mobile and fixed voice were going to converge," said Kenny Van Zant, executive vice president of marketing for Motive. "They missed the window a bit. It will be increasingly difficult for them to buy their way into owning a true mobile network operator."

Van Zant predicted that cable will need to follow a mobile virtual network operator route--if any mobile player is willing to offer up minutes to a player likely to cannibalize its customer base.

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Ken Kolderup, Kineto Wireless' vice president of marketing, sees a tough road ahead for cable: "The [carriers] are certainly in a good position because most own spectrum and have a wireless division. They can do a good job on wireless, broadband and voice; they're struggling a bit with the broadcast side of things.

"[Cable] can be very strong at broadband voice and broadcast content, but it doesn't have mobile," Kolderup continued. "That's going to be a challenge for them. I don't know if it's a killer, but certainly the fixed guys are in a great position to execute on something like this."

BellSouth and SBC will cling to their relationships with Cingular, and Verizon Wireless seems unlikely to side with mortal enemies such as Comcast or Cox Communications--or even BellSouth or SBC.

Those aren't the only players in the wireless space, however, and "it only takes one wireless guy without a big brother wireline partner or without a lot of market share in the U.S. to be interested in another savior," said Alan Stoddard, manager of converged multimedia services at Nortel Networks.

Field of Dreams

Cable has another option. The FCC continues to push broadcasters to relinquish analog channels and free up a ton of valuable 700 MHz bandwidth, which could then be auctioned off. Deep-pocketed cable providers--singly or as part of an industry consortium--could then buy wireless spectrum.

While a rough spot for cable, spectrum, in the end, should not keep it out of the wireless space. Until it enters, phone companies have a window of opportunity that some are already looking through to see what's out there.

"Owning a wireless network is a competitive advantage," said Jeff Weber, vice president of product and strategy for SBC. "I think we're going to be able to move on that quicker than the cable guys can."

Monica Paolini, president of Senza Fili Consulting, agrees that telcos will move on it; she just wonders how quickly.

"They're not going to do it right away." she said. "This is more of a long-term strategy, but I think that if you have the synergy it works well."

The issue in the short term is "a bit problematic because it's a cultural issue." she said. "If you have a universal multimedia access service, it can be seen as stealing minutes from the fixed line. So the two divisions are fighting each other and need to find a bit of equilibrium."

Balancing Act

Finding equilibrium is a big part of a seamless roaming enterprise trial BellSouth is conducting with Cingular Wireless via an Atlanta advertising agency, said Mario Muth, senior product manager of wireless services at BellSouth.

"Cingular is on board. Cingular is very much on the same page with us and working with us on this," Muth said.

And is Cingular willing to give up minutes to the wireline company?

"That's exactly what we're going to find out--the impact of minutes usage: how many minutes did they use before this trial; how many minutes are they using after the trial," Muth said.

IMS in the Lineup?

As a whole, technology will not hold up converged service offerings. BellSouth proved that in its labs prior to going into the field with the marketing trial, Muth said.

"What is really slowing things down is that we don't have handsets available [at consumer-like prices]," Paolini said "Even if a mobile or fixed operator is ready to go tomorrow, there are very few Wi-Fi/cellular handsets."

That's a piece of it, agreed Greg Carter, solutions manager for Ericsson. The company knows a few things about handsets and "is focused on the network piece, but learning that the handset piece is critical." Ericsson, Carter said, is leveraging lessons it learned in developing push-to-talk gear and is using its Ericsson Mobile Platforms group to coalesce industry cooperation. "You have to have a consortium, so we're looking at driving standards," he said.

Standards dominate every telephone technology rollout and converged wireless/wireline is no different. Most parties agree that IMS "is that standard of the converged network," said Bob Dye, vice president of strategy for Sonus Networks. "Even though it came out of the wireless world, it's actually pretty access-agnostic."

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Harold Braun, president of Siemens Carrier Networks and an avowed IMS fan, adds realism to the vendor fervor when he notes, "We don't have all the answers to the questions. I would like to connect the digital home network to the IMS infrastructure, take all of your home network, and make it IMS-ready. That's what we're trying to do."

The Cable Counterplay

Cable is integrating IMS into DOCSIS PacketCable VoIP specifications, so the competition is up-to-date on this technological development--a fact that should be brought home to wireline telco providers.

"It's been said that IMS is the wireline companies' last best hope for survival," said Eric Burger, CTO of Brooktrout. "Before IMS, there really was not a standard component that everybody agreed upon. Now that you have it, it really helps define the market."

Convergence wrapped around IMS is not "going to be the most difficult part of the transformation," said Joe McGarvey, Current Analysis' senior analyst for carrier IP telephony. "It's not going to be the technical one, it's going to be on the operations side, the business side--trying to get these guys to cooperate. You're going to see little trials, little attempts, and it's going to be a long time before the operational sides of these two businesses start to converge."

Which begs the biggest question of all. How much time do the telcos have until they must swing or let cable back into the game?

"We have four [wireless carriers] in the U.S., and one of them will crack and offer ... a solution to the cable companies at attractive prices," said Paul Longhenry, vice president of development for Sonim Technologies, a company that has had conversations with Time Warner Cable.

Time Warner is a cable anomaly, having relinquished its brand to Sprint PCS in an effort to jump into the wireless space.

"Time Warner is the most aggressive of the cable companies, moving to the quad play from the triple play," Longhenry said. "They see this as an opportunity to offer enhanced services and enhanced data services in conjunction with their wireless [partner] that other carriers might not be able to offer. Leveraging their wireline connectivity into the subscriber base and offering VoIP connectivity from the desktop or the home PC to their contact list that would be shared across these devices."

Other cable providers want to keep their own brands and are negotiating ways to do that--giving the telephone industry a bit of an opportunity.

Still, Longhenry said, "They can't keep the Time Warners out of the wireless business."

And when they get in, the game's on and the easy win goes out the window, no matter how hard the telcos swing.

"It will be a great battleground. How fast each player moves will determine whether they're able to kill off cable or lose ground," Stoddard concluded. "Whether it's a cable killer or not, it's going to be the great battleground."

RELATED ARTICLE: Market Projections:

Unlicensed Mobile Access (by 2010)

* 55 million dual mode subscribers.

* $1.6 billion in new revenues for wireless carriers.

* Minimum losses to landline telcos to reach $399 million.

Research Findings:

* UMA enables 65 million mobile operators to offer fully converged connectivity using their existing core networks.

* Development of UMA-enabled handsets will create economies of scale needed to lower the price and improve performance of Wi-Fi and cellular handsets.

* Carrier revenues from phone calls in hotspots are incremental to residential service but by themselves do not represent an opportunity to generate huge new revenues.

Source: Alexander Resources

Jim Barthold is senior editor of Telecommunications[R] magazine. (jbarthold@telecommagazine.com)

COPYRIGHT 2005 Horizon House Publications, Inc.
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