The core business of fixed-line operators is under siege. For years, mobile operators have been chipping away at the number of fixed minutes used indoors. An estimated five to ten percent of households today do not even have a fixed line, relying solely on the mobile network.

Hybrid operators with both fixed and mobile networks have not been affected by this change. Because there is a premium for mobility and the convenience that comes with it, the loss of a lower-revenue, fixed-line minute of use (MOU) was replaced with a higher-revenue mobile MOU.

What was a general evolution from fixed to mobile minutes, however, is now threatened with disruption by new entrants. New online voice-over-IP providers, for example, are offering fixed-voice calling for a fraction of what a traditional operator charges. In addition, the proliferation of Wi-Fi has now begun to threaten the core mobile-voice telephony model. A report by McKinsey estimated that an average of 44 percent of mobile MOU, whether in the home or the office, are within range of a Wi-Fi signal. The threat that a fixed operator’s MOU will go to the upstart VoIP provider is now becoming a threat to the mobile operator as well.

Fighting Fire with Fire

In the face of this threat, hybrid operators are beginning to take action. To combat these new VoIP entrants, fixed operators are rolling out their own fixed-VoIP services. By delivering VoIP service over the new low-cost IP network, fixed operators are pro-actively addressing their loss to fixed-VoIP operators.

Yet the preferred alternative--moving fixed minutes to the mobile division’s network--has had only limited success. For mobile operators, this is primarily due to two things. First, while mobile revenue per minute has been falling, it is still generally five times higher than the fixed network’s revenue per minute. For mobile operators to truly compete indoors, the cost of providing mobile services must come down. Second, mobile operators are reluctant to dramatically lower the cost per minute for all mobile traffic just to better compete in one segment, the home.

Operators need a solution that allows them to keep charging truly mobile minutes at a higher rate, and to selectively lower rates only when the subscriber is actually indoors and faced with a land-line.

Segmenting the Access Networks

For mobile operators, this means a solution that provides a cost-effective, low-impact way to leverage the cost and performance of broadband IP access networks--the same ultra-low cost network used by VoIP providers worldwide. This approach segments the operator’s access networks, putting low-cost, in-building calls on the lower-cost IP network while higher-value mobile minutes remain on the GSM network.

Unlicensed mobile access (UMA) is a mobile-operator inspired technology for delivering voice, data, and IP multimedia subsystem (IMS) services seamlessly over the IP access network. Developed by six operators and eight telecom equipment manufacturers, UMA is the 3GPP standard for mobile/Wi-Fi convergence.

From a solution perspective, part of what is driving the adoption of the UMA approach is that it addresses a specific proble--how mobile operators can cost-effectively harness the power and performance of IP. For mobile operators, especially those operating outside a fixed-line division’s serving area, UMA enables very compelling service offerings that are designed to dramatically lower the cost of service when indoors, thus accelerating fixed/mobile substitution.

For the hybrid operator, UMA provides an incentive for subscribers to migrate declining revenue-fixed MOU to still valuable mobile MOU. When subscribers are offered in-home calling packages that rival low-cost IP based plans, they will likely choose the convenience of a single mobile device with a common address book and call logs. In fact, an August 2005 survey conducted by Motorola found that if mobile calls in the home were priced the same as fixed-line calls, 50 percent of respondents would sign up for UMA service within 12 months

The Meaning of IMS

What is missing from the scenario, however, is the grand vision. How does UMA evolve, especially within the framework of the new world of IMS? IMS is a series of specifications designed to provide many different opportunities for fixed and mobile operators alike.

IMS grew out of the 3GPP, the standards body for the mobile community. Within 3GPP, IMS is an application framework for accelerating the delivery of mobile services. With new high-speed, IP-based 3G networks, operators wanted a model for rapidly introducing multimedia services quickly and without significant overhead.

Fixed operators have seized on IMS as well, but their definition of IMS is generally different--IMS has come to mean VoIP. Specifically, IMS is the core network infrastructure used to cannibalize fixed-line TDM service in favor of new VoIP applications. A dynamic application development framework is not as critical to the fixed-line operator.

For hybrid operators, however, the grand vision emerges: to have both the fixed and mobile divisions embrace the IMS infrastructure and, in time, develop a single converged network for both businesses. While most experts agree that this is outside the scope of our technology horizon, there is, at least, a vision for delivering network-level convergence.

Fitting UMA into the IMS Framework

How does UMA fit into this grand IMS vision? The same way it started in the first place, from a very pragmatic integration that solves a real business issue.

The deployment of UMA enables the subscribers of hybrid operators to be in their home with a mobile phone that is operating over the IP network while still receiving fixed-line voice. The challenge is how to link the fixed and mobile services together to accelerate fixed/mobile substitution while also providing a mechanism to reduce churn.

The first and most common UMA/IMS integration is based on bringing the mobile device in-home with UMA. When the mobile device registers that it is on the “home” Wi-Fi access point, an IMS-based server running in the core is notified. This IMS server now knows the mobile phone is in the home, along with the subscriber’s fixed-line phone. The IMS server implements a basic “simultaneous ring” service. If a call comes into the mobile line, the fixed phone and mobile phone both ring, enabling the subscriber to answer mobile calls on any fixed-line phone in the house.

On the surface, this is a rather basic and straightforward application. However, actually driving the convergence of the fixed and mobile networks in the core is quite complex. The power of IMS shows through in bridging these networks.

The actual user configurations for this service have subtle requirements. A user portal must be developed to enable the household to determine which UMA-enabled mobile devices deliver the application, how distinctive ringing on the fixed line is configured, and if and how a “follow-me” service (a fixed-line call ringing on the mobile phone) is implemented when the mobile phone has left the home.

A Vision for Fixed-Mobile Convergence

With this seemingly basic application, operators see a vision for true fixed line and mobile service convergence. By bringing these two network elements together, operators benefit by providing more incentive for consumers to use both fixed and mobile lines from the same operator, and to retain a fixed line in the face of fixed/mobile substitution. Additionally, this service is likely based on the operator’s broadband service, which is an underpinning of the new video applications on the horizon. Thus the ability of convergence to reduce subscriber churn actually holds the subscriber in place while new video services are introduced.

For consumers, there is a vision of having both fixed and mobile services work better together, and to have the converged service cost less than individual packages.

With UMA and IMS services delivering a pragmatic solution to a real problem, the future is clear. As hybrid operators look forward to multimedia applications like streaming video, music downloads, interactive gaming, and videoconferencing in the home, a common IMS core can easily adapt these types of applications to a UMA-enabled mobile device with a high-speed Wi-Fi connection. The extension of fixed-line services such as video and streaming media to the mobile network over UMA is the natural evolution of the hybrid network.

For hybrid operators, the ability to leverage both UMA and IMS to deliver a better indoor experience for fixed, mobile, and broadband services is clear. UMA and IMS make existing services work better and cost less, while reducing churn and extending the lifetime profitability of subscribers.

Over time, IMS applications will use UMA to deliver more fixed-line services, thus continuing the integration of fixed and mobile services.

Steve Shaw is director of marketing for Kineto Wireless.

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