Cincinnati Bell & Fixed Mobile Convergence: Service or Feature?

Cincinnati Bell launched their dual mode (cellular + Wi-Fi) handsets and service today. (See story) The concept of improved indoor coverage and unlimited calling is very appealing. Our consumers tell us that quality of coverage and perceived value are the two most important criteria when selecting a wireless service provider. This service hits both. Few people today add Wireless service to their home bundle - this could move those numbers.

I think it's an interesting play especially for the smaller, regional operators who are already offering broadband, local and long distance, wireless and TV service. They also have a public hotspot service. Owning the network end-to-end should play in their favor though it's unclear in how many households this condition exists. They didn't mention the need to purchase a new router (or have one issued by Cincinnati Bell) or have Cincinnati Bell broadband service though this may be assumed.

The service requires the purchase of a new handset which appears to be a fairly typical phone (i.e., adequate

with great features, but not the LG Chocolate so many teenagers want). Handset replacement cycles may slow the uptake of the service as consumers may not be ready to upgrade or are waiting for higher end options.

One of the more interesting questions for me though when I think of fixed mobile convergence is whether or not they are a) services or b) features in the long run. Cincinnati Bell will charge $10 per month. However, if the primary driver of adoption is improving indoor coverage, will consumers pay more? or will improved indoor coverage be a condition for loyalty and acquisition? If it's the unlimited calling that is the primary motivator, then the $10 per month seems like a great value - esp. with a lot of family members.

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