Wednesday, April 11, 2007

FMC Not a Slam Dunk

Bad news for fixed mobile supporters: In March 2007, Deutsche Telekom cancelled T-One, its dual-mode WiFi-GSM service in Germany, which it had launched in August 2006. Whatever else the shutdown might mean, it certainly indicates that service providers cannot simply put the service out there, make pricing and handset mistakes, and expect customers to go wild over it.

That’s especially true if there is competent competition. T-One was up against the cheaper T-Mobile home zone services, for one thing. Home zone services are based on tarriffs that encourage use of fixed network connections rather than mobility network when a user is within range of their identified home zone transmitter.

So why did DT’s T-One fail? It failed because it never managed to get enough customers. At the point the service was closed, DT had garnered far fewer than 10,000 customers. In fact, just 2,000 was the final figure, says TeleGeography.

The more important questions are why it failed to stir much customer interest. Observers point to high prices, really limited handset availability, competition from T-Mobile and basic lack of a compelling value relationship. Orange seems to be faring better, but results from other markets suggest the fixed mobile convergence value proposition still isn't broadly embraced.

Maybe all people want is cheaper calling and better reception when inside the home. Service providers can satisfy the first desire by a simple change of billing. The second requires some degree of technology integration. Beyond better reception and cheaper calling, it isn't so clear that lots of people want to converge phone numbers, features and services, beyond directory services.

Maybe all most people want is simply to use their mobile service more places, with acceptable quality, than they now can. Lower prices might also be an issue, but one might suggest users would prefer better coverage even to better prices.

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