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Fixed-Mobile Convergence Subs Forecast

Fixed telecoms operators will be the driving force behind fixed mobile convergence (FMC) over the next five years, according to a report released by Informa Telecoms & Media. The study predicts 92 million subscribers by 2011 generating $28 billion in revenues and comprising 3 percent of overall subscriptions.

Fixed operators will aggressively roll out FMC services in order to target the ongoing threat of 'fixed mobile substitution' - where people are using mobiles rather than landlines. This is already presenting a significant challenge in certain territories and fixed operators are expected to respond by targeting FMC to gain share of mobile voice revenues through Mobile Virtual Network Operator (MVNO) agreements.

Mobile operators, on the other hand, will take a cautious approach to FMC deployment over this period, and are expected to offer services where competition is highest to combat fixed operator activity. In addition, they will continue to leverage the higher returns offered by fixed mobile substitution and are also likely to await the development of 3.5G and technologies to combat fixed line and DSL operators head on. This will be achieved with competitive pricing in order to reap the greatest returns out of the current fixed mobile substitution 'cash cow'.

A consequence of this activity is a predicted increase in sales of dual mode handsets to 5 percent of global handset sales: over 47 million units per year by 2011. The majority of these sales (85 percent) will be to consumers adopting FMC services such as BT Fusion for convenience and cost benefits, although a significant proportion of revenues will be from enterprises adopting FMC as part of a unified communications strategy for more effective business interactions.

Key adoption areas for FMC will be the Asia Pacific region, where other technologies may be leapfrogged, North America and Europe, where broadband penetration is high.

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