Yesterday, the Embarq CFO said that the company may drop its wireless service in 2009, handing subscribers back to its MVNO partner Sprint. Embarq is the spin-out of Sprint’s original fixed line business. As part of the deal, Embarq developed an MVNO relationship with its former parent.
Embarq was one of the first to develop a dual-mode CDMA/Wi-Fi service. The service was announced by former FMC technology provider NewStep Networks.
In the article, Embarq said their original target was for 1 million mobile subscribers, but had achieved just over 100,000. I can only imagine what fraction of those subscribers actually chose the NewStep/FMC service. Suffice it to say, it’s hard for fixed operators to sell mobile services in general, let alone dual-mode services.
I have written in the past about the problems with fixed line operators developing dual-mode services. The problems aren’t technical. It’s possible to make a phone hand-over between fixed and mobile networks.
The problem is that dual-mode services are fundamentally about Fixed-to-Mobile Substitution (FMS). Yet that’s exactly the opposite of what a fixed operator wants. Fixed operators need MFS solutions, or a way to put mobile minutes back onto the fixed network. That is contrary to what consumers expect today.
Dual-mode services from fixed operators are always going to be challenging.
Note: I found a link to this article from another FMC company focused on fixed line operators. I think this company is actually gone now too.
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