BT Unveils FMC Service

BT Group plc (NYSE: BT; London: BTA) has taken the wraps off its fixed-mobile convergence offering, providing a high-profile boost to unlicensed mobile access (UMA) technology.

Dubbed “BT Fusion” -- previously known as BluePhone -- the carrier unveiled the service at a press conference in London today (see BT Launches Fixed/Mobile Phone).

The idea is that the handset, developed by Motorola Inc. (NYSE: MOT), works like a mobile phone when the user is outside and away from home, but switches to a fixed network upon return.

So how does it work?

As noted, the service is based on UMA technology, which is part of the 3rd Generation Partnership Project (3GPP) cellular specifications. It allows network operators to extend the coverage and capacity of their networks by using unlicensed local-area access networks, such as wireless LAN and Bluetooth (see Industry Touts UMA Specs and UMA Gains Ground).

The user, equipped with a dualmode cellular/WLAN handset, can make calls across any generic wireless LAN and IP network, with the call and signaling data encapsulated in secure IP tunnels. These tunnels terminate on an access gateway, which processes and passes call data to the circuit-switched or packet-switched mobile core network.

In BT’s case, the handset uses Bluetooth technology to route Vodafone Group plc's (NYSE: VOD) mobile network calls through a wireless LAN access point -- called the BT Hub -- and onto a fixed BT broadband line. The catch is that users must have an existing BT broadband connection and be a Vodafone customer (see Voodoo Teams With BT).

The service is being trialed by approximately 400 paying customers from partners such as Alcatel (NYSE: ALA; Paris: CGEP:PA) and Motorola, and will be commercially available in September via registration on BT’s Website. BT is keen to talk up the potential cost savings to users, claiming that it will offer mobile-to-landline calls at the same rates as current fixed-line tariffs.

Plans are also afoot to integrate the 802.11 wireless LAN standard into the handset, eventually replacing the short-range Bluetooth technology. “WiFi is a little way away yet,” says BT spokesman Jon Carter. “We are looking at about 12 months from now. When we have WiFi phones it will run off the WiFi technology rather than Bluetooth. Users will probably then be upgraded. The WiFi phones just aren’t out there yet though.”

Analysts can hardly contain their excitement at today’s news. “Many have spoken about FMC over the years, but BT is the first to offer a true FMC service,” opines a note from Ovum Ltd.. “This is a watershed -- the separate fixed and mobile telephony services are no longer discreet [sic] but are intertwined. It is not overstating the case to say that the industry will never be the same again.” [Ed. note: Whoa there!]

— Justin Springham, Senior Editor, Europe, Unstrung