My Take on the Ultimate Landline Replacement Offer

In some countries like Germany, where mobile ownership has now gone beyond the 100% mark, mobile operators are looking for ways to continue their growth. Thus, mobile operators are now starting to develop offers to animate people to ditch their landlines in favor of a ‘mobile only’ lifestyle.

Telephony replacement only: Replacing a landline for people who do not have a computer and Internet access at home is pretty simple. Have a reasonable offer for both originating and terminating calls and people can’t wait to drop their monthly fixed line charge. O2 began to do this already many years ago in Germany with a product they called ‘Genion’. With that offer, mobile subscribers get both a mobile and a fixed line phone number. While being in their "homezone", cheaper tariffs apply for outbound calls. For incoming calls, people can use either the fixed line or the mobile number. The advantage of using the fixed line number is the fact that the caller only pays for a fixed line call which is much cheaper then calling a mobile phone. The model has been quite a success and since landline replacement has become the strategy of the day, T-Mobile and Vodafone have started to develop and market similar offers.

Telephony and Internet Replacement: Replacing both fixed line telephony and Internet at home is somewhat more difficult. But again, competition in the market brings some innovative ideas to get to those customers as well. Again, O2 was the first to start offering a surf box for the home. The surf box is basically a wireless lan access point with a built in UMTS phone or PCMCIA card. While prices for wireless Internet access where pretty high at the beginning they’ve come down quite a bit recently as Vodafone and T-Mobile have also started to make similar offers. Vodafone for example offers a surf box and 5 GB of data traffic for around 40 Euros a month. The catch: The use of the surf box with the included traffic is limited to a home zone. If location bound wireless Internet access solutions will persist in the market is not sure. Since T-Mobile has started their "web’n’walk" program, similar offers are now available without being restricted to a single physical location. With HSDPA now available in some networks, expect to see new versions of these surf boxes to match speeds of current DSL lines. While prices are not yet competitive enough to trigger a landslide victory for fixed Internet access replacement, wireless access has one big advantage: Ease of installation. In the majority of cases, DSL installation is a nightmare and takes weeks in the best case and many calls to service centers and sleepless nights in the worst case. When getting wireless Internet access, however, you can take your notebook to the sales point, get a surf box and contract, try it out in the shop and then take it home. That’s it! In my opinion, operators have so far not capitalized this tremendous advantage.

The ultimate replacement offer: Apart of the easy installation process, wireless networks have another big advantage over fixed line networks: Video telephony. Agreed, it’s still not much used today but things are changing quickly as I discovered in a previous blog entry. This is the one service fixed line networks can’t offer. Once UMTS terminal ownership reaches a point where your friends suddenly also have video phones, a competitive bundle of voice telephony, video telephony and wireless Internet access could make more people ditch their landlines. We are not quite there yet, but I expect that in another 12 to 24 months the critical element, UMTS phones in the hands of more than 25% of the population, should be in place in many countries.