Upwardly Mobile: What we can learn from the death of T-One

Just as a wave of new converged fixed-mobile services are being announced in the UK, Germany's biggest telco has killed off its own FMC product. Jo Best takes a look at what FMC services need to survive.

Deutsche Telekom, German's number one telco, announced last week the death of its FMC service, T-One. It's interesting to note the demise of such a service just at the time many others are starting to jump on the FMC bandwagon - BT, Orange, stand up please - and still more are crying out 'me too, me too'.

So why did T-One come to an end? And what does that mean for the hordes of converged services soon to be thrust upon the UK market?

Imagine a smart phone that switched to routing mobile email traffic over wi-fi when an access point was in range. Imagine the per megabyte savings for those on a pay as you go data tariff.

Analyst research into the subject puts the T-One failure down to the idea that the offering simply wasn't different enough. Like BT, Deutsche Telekom positioned its FMC, or fixed-mobile convergence, service as a cheaper way to make calls. Nothing wrong in that, you might argue - who doesn't like a bargain?

However, advertising on cheap per-minute pricing is arguably the wrong way to go about selling FMC. It's hard for the telcos to compete with the shed loads of super-cheap voice minutes mobile operators have to offer since the change to 3G.

And on top of pricing pressure, mobile operators have already cottoned on to whatever nascent threat FMC presents and are launching 'at home' services - where users get cheap rates if they make calls in their home/office - precisely the same locations FMC services are targeting with their cheap calls.

What's FMC?

Read all about fixed-mobile convergence in our Cheat Sheet.

It looks like BT is already trying to sell its FMC service, BT Fusion, based on price. Current adverts promote the service with the tag line 'turn one minute into four minutes' if you make the call over wi-fi at home or in the office.

Tut tut, BT - you can do better than that. Surely if someone is already paying BT for broadband every month, all VoIP calls should be free. The way it is now, a user is not only not getting their calls as cheap as they should, they're paying for them twice.

So how can FMC services go right?

Services, not prices, could be the key to interesting customers, particularly for businesses that have the buying power to negotiate discounted voice minutes from their supplier anyway.

FMC after all does not mean the same to all people - it is not always a single handset used to make calls over both wi-fi and cellular networks. FMC means convergence of fixed and mobile services - for example, the idea of having a single phone number per individual that can be rerouted to whatever device the individual is using at the time and wherever they are. Such services have not been fully exploited or even publicised as yet.

BT has indicated it may be thinking beyond voice with a free mobile web surfing offer but data could be a richer ground still for FMC. One area to consider could be an FMC service BlackBerry style. Imagine a smart phone that switched to routing mobile email traffic over wi-fi when an access point was in range. Imagine the per megabyte savings for those on a pay as you go data tariff.

That of course would mean a real battle between the mobile operators and the converged players - what mobile operator in its right mind would bid goodbye to megabyte upon megabyte of fat data traffic shunted over wi-fi? Vive la revolution!