BT has launched what it claims is the world’s first converged fixed and mobile telecoms service. It has revealed a solution where a single handset can be used to make and receive calls on both the GSM network and on Bluetooth networks in subscribers’ homes.
Using UMA technology (Unlicensed Mobile Access), which has now been formally released and accepted into the 3GPP standards group for generic radio access, subscribers will be able to roam from GSM to their home network and vice versa without the call being dropped.
UMA allows BT to carry GSM signalling and telephone calls over the public Internet using DSL access, with a Bluetooth interface. BT Fusion will be technology agnostic and in time, will work across other standards including WiFi and SIP.
When the subscriber is within range of their Bluetooth basestation, the call is passed to a Bluetooth hub, and sent via a broadband DSL line to the internet.
Eighteen operators are working on fixed-mobile convergence projects like this, but all the others are currently in trial phase. The operators, which include BT, Cegetel, KPN and Swisscom, have formed FMCA – the Fixed Mobile Convergence Alliance – to develop services like the one BT has launched today.
BT is using the GSM network of Vodafone and a handset from Motorola for the solution, which it has branded as BTFusion.BT already piggybacks on the Vodafone network as an MVNO.
It will charge existing mobile rates for calls, except for calls made over the Bluetooth/DSL connection to a UK geographic number.
The handset and Bluetooth hub —which is also WiFi enabled — are supplied for free, while the monthly subscription is either £9.99 or £14.99, depending on the quantity of bundled minutes included.
BT will allow just 400 customers to use the service until it has ironed out the rest of the glitches. It plans a commercial launch in September – 19 months after its original scheduled release.
BT intends Bluetooth to be a stepping stone to a WiFi/GSM roaming solution, which it intends to release next summer.
But for the time being the telco is insistent it will not upgrade to 3G, preferring to work on roaming to and from GSM.
Aside from the Motorola handsets, BT is being supplied by a consortium of equipment vendors, lead by Alcatel. Other suppliers include Ericsson, Inventel, IV and Lucent.
Jacques Dunogie, executive vice president for Alcatel, said the Fusion project had been a “far-reaching programme”, and added that BT had made the project a “benchmark for successful innovation in.”
Many have questioned whether convergence products would be a true threat to the revenues of mobile operators, but Jake Saunders, European research director, ABI Research, said Fusion had the potential to ear hundreds of millions of pounds for BT over the coming years.
“Last year BT’s Mobility operation contributed £205 million, a 100% increase on the year before. Industry analysts will be expecting [Fusion] to begin contributing several multiples of that growth over the next two to three years,” he said.
Saunders identified four big questions for BT.
“First, the handoff between the mobile coverage and the home Bluetooth coverage will need to be seamless and reliable. Second, Bluetooth is in most mobile phones but BT needs to migrate to Wi-Fi for future economies of scale. Third, they need to build out a diverse range of handsets, but the market has fickle tastes. Fourth, the mobile operators will not be standing still. They will continue to improve coverage and intend to use 3G to reduce the underlying costs and increase the capacity of their networks. They could, and will, introduce home-zone tariffs centred on your current home (or office) location.”
Ovum’s analysts said in a statement that they had fewer concerns over the technical performance of the product.
“The devices we tried worked perfectly, which is credit to BT and its vendor partners. The in-call handover is indeed seamless (but for a tone to make the user aware of the switch), and the range of Bluetooth seemed reasonable. Surprisingly for us, as we switched from the GSM to the Bluetooth environments, we noted improved voice quality. If BT can replicate this on a highly contended ADSL line, its claim of better (than GSM) in-door voice quality will stand.”
On handsets, Ovum noted that in addition to the Motorola launch device, the V560, Nokia and Samsung are working on WiFi cellular handsets, to be available next year.
On pricing, the analysts commented that although Fusion offers low cost calls from home, that only applies to other UK fixed lines. Calls to mobiles and international calls will be billed at the same rate as BT Mobile’s prices, (ie at a premium to BT’s fixed line prices.) Ovum believes this will dampen demand and said BT should “do more work on its pricing and packaging.”
Finally, BT’s approach does highlight one danger to fixed providers operating in the FMC space. Using DSL as the link negates the need for a PSTN line at all, and users may start to demand “naked DSL”, that is, with out a PSTN line. Fixed operators will have to balance this revenue loss against gains from increased call minutes.