Fixed-mobile offerings multiply

Competition in fixed mobile convergence hots up as O2 announces intention to buy Be for £50m

Competition in both the fixed-mobile convergence (FMC) market and the quad-play voice, video, data and mobile sector increased last week, as mobile operator O2 announced its intention to buy UK broadband provider Be for £50m, while BT launched its Total Broadband service.

Be launched a 24Mbit/s ADSL2+ service in the UK in September 2005, and was expected to unbundle over 1,000 UK telephone exchanges by the middle of this year. O2, now part of the Spanish Telefonica comms giant, will hope its acquisition can fulfil this target, since the offer of free broadband by rival Carphone Warehouse is encouraging thousands to sign up.

“The Be deal confirms that convergence is on the agenda for the UK,” said analyst firm Ovum. “O2 is able to draw on the experience of its parent company, which puts O2 at an advantage over any of its mobile-only competitors who may also be considering entering the UK broadband market.”

Meanwhile, BT launched a bundled offer called Total Broadband. The top-end package, priced at £23 + VAT per month, offers download speeds up to 8Mbit/s, depending on distance from the exchange, via the free BT Home Hub wireless router.

If users choose this package they can also make free internet voice calls at evenings and weekends and have 250 free BT OpenZone Wi-Fi minutes. Users also receive free connection and security software, as well as 24-hour helpdesk support, which could make the package suitable for home workers.

The system could also be set up to support BT’s FMC Fusion service, which integrates GSM and Bluetooth into a single device.

At the CommunicAsia IP technology showcase in Singapore last week, experts argued that Generic Access Network (GAN) technology, which is designed to support FMC, could offer users more bandwidth for voice or video IP.

GAN, previously known as Unlicensed Mobile Access (UMA), supports the integration of Bluetooth, 3G and Wi-Fi connectivity in a single mobile handset, letting users make hands-free voice calls at less cost over Wi-Fi networks, browse the internet and use other data apps over mobile infrastructure.

Speakers at the show said that by using smaller Wi-Fi cell sizes, telcos could give users more bandwidth for voice or video over IP, or other data-based applications, using cheap, widely-available, licence-free spectrum “The ubiquity of cellular plus the higher capacity of Wi-Fi gives operators extra bandwidth for only a few extra dollars of cost,” said Dr Jeffrey Torrance, vice-president of FMC at silicon firm CSR, which is building low-power chipsets for a new generation of mobiles.

Handsets that combine all three types of connectivity are still at the prototype stage, though Nokia, Motorola and others have released dual-mode UMA handsets that combine 2.5G GPRS and Wi-Fi, but not Bluetooth or 3G technology. Experts believe the consumer market will develop long before corporate demand catches up.

Jay Anderson, Motorola’s vice-president of sales and operations for Asia networks, said he was confident that battery life and Wi-Fi/Bluetooth interference problems – both use the same 2.4GHz waveband – would soon be solved. He argued that the real challenge is to make sure connections are not dropped between access points and that services can be uniformly delivered and billed for any access technology.