1 © 2006 Nokia Gains from FMC/SKo

Sakari KotolaNokia

Gains from Fixed-Mobile Convergence

2 © 2006 Nokia Gains from FMC/SKo

Outline

• Defining Fixed-Mobile Convergence (FMC)

• Global revolution in communications

• Benefits and expectations of convergence

3 © 2006 Nokia Gains from FMC/SKo

Industry Convergence

fixed – mobiletelecom – media/TV

digital devices

Several types of convergences are all happening at same time

Network convergenceFixed-mobile, multi-access,

common core service machinery

Device convergenceMultiradio terminals, smartphones,

music devices, cameras, game decks, PDAs

Service and application convergence

VoIP, digital content, messaging, push-to-talk, interactive gaming, video sharing, video telephony

Fixe

d-M

obile

Conv

erge

nce

4 © 2006 Nokia Gains from FMC/SKo

Subscriptions globally, millions

3 billionby 2008

3 billionby 2008

Mobile and broadband growing

Source: Nokia, Regulators, Operators, ITU-T

0-92 -93 -94 -95 -96 -97 -98 -99 -00 -02-01 -03 -04 -08

e

200400600800

1 0001 2001 4001 6001 8002 0002 2002 4002 6002 8003 000

-05e

MobilePSTNBroadband

5 © 2006 Nokia Gains from FMC/SKo

Voice goes Mobile and IPminutes,

billion

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

-03-02-01-00-99-98-97-96-95-94-93 -07 e

-92 -04 -05e

-06e

50/50 splitby 2007

50/50 splitby 2007

-09 e

-08 e

Mobile voice traffic

Fixed voice traffic

VoIP traffic

Rapid growthRapid

growth

VoIP – Rapidgrowth in fixed

domain

VoIP – Rapidgrowth in fixed

domain

Fixed to MobileSubstitution

Fixed to MobileSubstitution

Sources: National Regulators, ITU, Operators

6 © 2006 Nokia Gains from FMC/SKo

Mobile & Fixed Ratio in Switzerland

• Mobile voice share of total voice traffic has only grown from 11 % in 1999 to 22 % in 2004

• Very low mobile voice share

Voice Split

Mobile voice shareFixed voice share

Source: ITU, National Regulator, Nokia

0%10%20%30%40%50%60%70%80%90%

100%

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Subscribers

Mobile subscribersFixed channels (incl. lines & ISDN channels)

Million

Source: ITU, National Regulator, Nokia Total broadband subscriptions

0

1

2

3

4

5

6

7

8

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

• Number of subscribers in mobile networks has surpassed that of fixed in 2002

• Total broadband subscriptions increasing very fast

7 © 2006 Nokia Gains from FMC/SKo

What people expect from communicationssimplicity, mobility & personalization

At homeIn the office

On the move

• My phonebook• My agenda• My messages• My presence info• My applications• My ringing tones• My Internet

8 © 2006 Nokia Gains from FMC/SKo

Many, single purpose devices.Separate services and bills

Greater choice of multi-functionpersonalised Services/devices.

Convenience of mobilityMore, easy to use access optionsHarmonised billing

For users

What Fixed Mobile Convergence means ..

FixedPSTN voicetelephony

Mobile Voice

telephony

FixedVoIP

telephony

Mobile Multimedia

services

FixedMultimedia

servicesComplex service and technology islandsCostly to maintain/bill/upgradeDifficult to package services across islands

New Multi-access revenue opportunitiesUnified core with reduced Opex and CapexSimple, quick new service introductionBundling of services to market segments

UnifiedCore

( CONTROL AND SERVICE)Multi-access

ServiceProviders

PSTN/PLMN

BusinessOperations Support

SystemsFor operators

9 © 2006 Nokia Gains from FMC/SKo

Drivers for FMC - operator benefits

• New business opportunities through• new IP based consumer services• new services for enterprises • new converged service bundles• offering higher service quality and value to consumers and enterprises

• Proactive move against new service providers with new business models• More (cost) efficient service development

• Faster service development with IMS/SIP• Same services through different access networks

• Savings in CAPEX and OPEX through unified• IP based backbone network• unified service infrastructure• unified network management and operations support systems (OSS)

10 © 2006 Nokia Gains from FMC/SKo

Drivers for FMC – end-user benefits

Quality benefits• Improved call quality• Increased reliability

Lifestyle-oriented benefits• Centralized access to all contacts• Mobility of preferred services• Separate device and numbering for

each household memberFinancial benefits

• Mobile/fixed cost savings - deals for combined subscriptions

• Fewer bills resulting from bundling

11 © 2006 Nokia Gains from FMC/SKo

Barriers for FMC – end-user concerns

Perceived complexity• Ease of use – setting up and usage• Interoperability of devices and

services - lack of handoverTechnology-related concerns

• Reliability and security of technology

• Access to preferred services Financial concerns

• Need to invest in new devices• Complexity in billing and

subscriptions• Roaming

12 © 2006 Nokia Gains from FMC/SKo

Economic benefits of convergence: Two case studies

• Two cases: private and public sectors• Step-by-step approach to converged

communications• Value of mobility – preferred device

and less training required• Value of outsourcing infrastructure

and maintenance• Enhanced customer interaction

• Impacts on:• Enterprise productivity and team-

work processes• Employee productivity• Reachability

13 © 2006 Nokia Gains from FMC/SKo

Thank you!