It seemed that Fixed Mobile Convergence (FMC) is fatal. According to Central Scientific-Research Institute of Communications (CSRIC) in Russia by the April of 2006 year there were 27 thousand FMC-services users. Certainly it is not 10 thousand millions Fixed and not millions of Mobile subscribers but it is just the beginning...However, as Fixed Mobile Convergence Conference (Moscow, November, 2006) showed this beginning does not promise in the nearest future huge “C” — shock because there are so many restrictive factors from the carriers side, as “F” and “M” as well.

FMC with registration in the capital

There are several FMC projects of “The Big Three” and Fixed-telecom carriers in the Russian market. More active is “Megafon” in cooperation with different telecom-carriers such as “Gars Telecom”, “Central Telegraph Office”, “Matrix”, “CountryCom”. “Vimpelcom” partners are “Equant” and “Golden Telecom”, “Sky Link” partner is “Comstar-OTC”, MTC partner is MTTC. By the projects quantity we do not fall behind the foreign carriers. The scope is another. They do not have enough subscribers, while we have only 27 thousand.

Upon A. Lezhempekov (МТТ) opinion, the main disadvantage of Russian projects is in the areal lock-on because all of them are situated in Moscow and Saint-Petersburg. Moreover, MTT is on a very interesting position from the FMC view-point. Founded in 1994 as transit carrier for mobile networks, in 2006 MTT entered intercity and international long distance (ILD) communication market. Nowadays, not only carriers and content providers use its services, but final subscribers as well. In this segment MTT plans to realize FMC potential imbedding such services as “Universal Number” which unites fixed job, fixed home and mobile subscriber numbers. Moreover this service is going to be realized on the whole Russia territory using IN numbers and local and zone telecom-carriers numbers. In 2007 MTT will continue development and integration FMC services such as multiprotocol mobile access, message sender, subscriber location control, VPN access, jointed account and etc. Perhaps, exactly these MTT plans can introduce FMC-services nationally.

After déjà vu

P. Gorenkov, “Gars Telecom” CEO, one out of the active last year FMC Conference participant, noted that “he couldn’t get rid of the déjà vu feeling” because after a year nothing changed on the Russian FMC “bandbox”. We did not agree and proclaim that was held detailed analyses of the nowadays arising FMC market stagnancy. It is obviously that half of the successful therapy depends on right diagnosis.

Thus, what holds FMS development in Russia? Common opinion is that wire carriers do not have motivation to activate. Even P. Gorenkov, who a year ago thought that convergent services could help carrier to rise ARPU from $50 up to $200, agreed that nobody considers FMC as income source. This is the resource to hold customers and to rise clients’ loyalty. Such “sleazy materials” are not relevant for Russian ware carriers because they are still in shock like western colleagues when subscribers began to refuse from fixed communications. The position of wire carriers in Russia is eternal: capitalized expenses should be absorbed.

Concerning nowadays examples of FMC organization, according to P. Gorenkov, they have “the whole range of disadvantages which makes these products using uncomfortable: two accounts, two agreements, strange agent schemes and finally, both carriers are still market themselves as competitors that is nonsense.” As an illustration, mobile operators offering FMC firstly promote corporate tariffs that are lower than FMC tariffs.

Returning to FMC nonprofitability, the head of “Gars Telecom” concerns that this question does not close: “We confirm that client is ready to pay for convergence service. Mobile and wire carriers should adjust who ‘rules’ to develop the product. It can stop huge tariffs erosion. Moreover, this product can be profitable. Competition between carries kills FMC, blows up investments. If tariffs do not rise, neither mobile nor wire carriers will invest FMC.”

For successful cooperation within the bounds of FMC project, it is necessary to distribute roles and zones of carriers’ responsibility. According to “Gars Telecom” activity, fixed carrier should be the only contractor for corporate customer on SLA, render commutation capacity, telecommunication channels, billing, Help Desk, service-management. In the mobile carrier responsibility area is mobile capacity, wireless network, SIM-cards.

There is a very debating question: “Who dominates in FMC?” We can agree that for corporate FMC client fixed carrier is the main and for common subscriber — mobile carrier. At last today the all companies from “The Big Three” has license to render fixed communications, and if it is necessary, according to E. Pikersgil (“Sonic Duo”), can become wire carriers. Hу also notes that “It is important not to find out but to understand who gets more from convergence: mobile or fixed carriers, and for whom this service is more attractive.” This question is still opened. Such as the new one from S. Zhuravlev, Science center “Telecommunication services harmonization” Director: “Is FMS the single source project if there are technologies that provide the same services, and do not demand competitors’ cooperation?”

And can it suddenly happen that healthy “F” and “M” competition is better than unhealthy “F” and “M” convergence?

Translated with cuts