Benefits of Integrated Services Outweigh Risks for Both Operators and Customers

SCOTTSDALE, Ariz. September 16, 2002 ≠ Wireless/Wireline Integration or Fixed Mobile Convergence (FMC), the provisioning of multiple telecommunication services by a single operator, is enjoying a revival, according to In-Stat/MDR ( The high-tech market research firm reports that, while there are significant carriers for operators, associated with integrating their multiple lines of telecommunications services, there are obvious opportunities and benefits that, in the long run, outweigh the risks. The ability to offer these services promises to make the largest operators more nimble and better equipped to compete in what are increasingly competitive markets and, as operators become more adept at offering them, the level of acceptance on the part of customers will increase, leading to a greater willingness by customers to choose integrated service providers for their telecommunications needs.
“By whatever name you call it, the benefits of integrated telecommunications service are real for both operators and customers,” says Ken Hyers, a Senior Analyst with In-Stat/MDR. From the operator standpoint, the process of integrating one’s networks can lead to the realization of cost savings and, potentially, more customers. These benefits though, will come at a price, as the operator faces daunting up-front expenses for upgrading and integrating their networks, as well as potentially significant disruption of corporate culture. For customers, the benefits can also be significant, as telecommunication costs are reduced and additional services, which can improve productivity, are introduced. However, according to Hyers, “The process of integrating services can be fraught with
danger for both operator and customer, and it is important that both carefully weigh the advantages and disadvantages associated with converged service before choosing to fully integrate their network or purchase services from an integrated services provider.”
To assess interest in integrated services, In-Stat/MDR conducted a survey of 221 employees of companies throughout the U.S. to gauge interest in these services and to discover what kinds of integrated services are currently being used.
The survey found the following:
– Survey participants whose company did not purchase their telecommunications service from a single provider were asked to measure their level of interest in integrated services. The level of interest in consolidating telecommunications services, while not
high, does indicate a strong interest among a large minority of companies surveyed. 11% of the participants indicated that their companies were very interested, and 15% were somewhat interested, in consolidating their telecommunications services with a
single service provider.
– When asked to list the service providers from which they would purchase integrated telecommunications services from if they were seriously considering purchasing these services, survey participants ranked AT&T (25%) as the highest, followed by Verizon (20%),
Sprint PCS (11%), and SBC (9%).
– The reliability of a single converged service provider is highly important to businesses. When asked about the importance of reliability when choosing or considering a converged services provider, 43% of survey participants ranked it as highly important.
– Survey participants noted several reasons for not choosing to use a single provider for all of their wireline and wireless telecommunications needs. The single biggest reason given for avoiding an integrated service provider was that they did not want to become a victim of an entanglement strategy on the part of the operator.