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Mobiles Moving Into Fixed Networks

There are often confused reports in the media about mobile and fixed broadband, with arguments that one could replace the other. Yet the reality is that they coexist and complement each other—perhaps even more so since one cannot manage without the other.

Increasingly, devices such as smartphones, tablets and smart TVs are at the end of fixed lines, with a wireless (WiFi) connection between the fixed line and the device. Equally, people on the move use their mobile phones to access their emails, the internet and social media. However, given the growing levels of mobile broadband usage, to avoid network meltdowns the mobile operators need to offload traffic as soon as possible onto the much more robust fixed networks. The fixed networks are increasingly based on fibre-optics rather than copper.

This interdependence is also forcing mobile-only operators to look at fixed line networks. Vodafone was one of the first to move into this market by adding either fixed line assets or fixed line partnerships to their mobile operations.

But developments are also happening in the other direction. While I was in Europe, the Dutch Cable TV operator Ziggo launched its mobile voice service, operating as an MVNO. It did this after some forward planning. Over the last few years the company has installed WiFi modems at customers’ premises. This mesh network of over one million modems makes up an integral part of the overall network. The company’s three million customers have access to this WiFi network, providing internet services through their smartphones, tablets and other devices. The WiFi network complements Ziggo’s overall offering.

In areas where there is no WiFi coverage, Ziggo relies on the host network of Vodafone, with whom they have a wholesale arrangement. Ziggo is also investigating linking its customers’ WiFi network to that of one of the other major cable companies, UPC. This would provide Ziggo’s customers with nearly nationwide WiFi coverage. The potential tie up with UPC would further cement the relationship between these players: they had formed a joint venture (known as Ziggo 4) in late 2009 to deploy and run telecom and broadcast networks. Having secured licences in the 2.6GHz band at auction in 2010, Ziggo and UPC were then able to complement their existing bundled services (based on fixed-line access) with mobile broadband offers based on LTE (launched earlier in 2013). Ziggo failed to secure additional spectrum licences in the late 2012 auction, given the high prices reached.

At this early stage the company does not make money from its mobile operation. However, its strategy is aimed at delivering very attractive bundled packages that would allow it to compete with the incumbent operator, KPN. The latter has a 40% market share, with Ziggo 25% and UPC 15%.

Through social media and other big data activities the company will also start personalising services (as well as provide advertising). This will give it the opportunity to move into new markets.

By Paul Budde, Managing Director of Paul Budde Communication

Paul is also a contributor of the Paul Budde Communication blog located here.

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Ziggo's offering reads as an OTT service which is still meshing wireless/RF with wired backend.. George Michaelson  –  Sep 25, 2013 2:36 AM

I may misunderstand what you’re saying here Paul but it reads as if even Ziggo’s offering is an example of the innate dependency on wired networks of a wireless technology. I couldn’t see a quality which implied an inverted, backhaul-over-RF quality to whats on offer.

I do think wireless and wired are complementary. and I think high speed technology like LTE and WiMax has a place in local distribution (although I am personally more interested in the disruptive qualities of locally constructed mesh nets, which would be a regulatory nightmare but fascinating!) But there is an inevitability about traffic beyond local traffic going over fixed, wired/glass paths.

Trends Paul Budde  –  Sep 25, 2013 3:27 AM

Thx for your comment George,
While you are right in relation to Ziggo, what I basically flagged was that indeed, increasingly, fixed and wireless networks will be intertwined and yes while the access will remain complimentary (fixed and wireless) the underlying infrastructure will become fare more intertwined.

I also flagged that telcos who have the opportunity to utilize both networks have a greater opportunity for marketing (bundling) than those who only operate a singular network.

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