Telco analyst Paul Budde said while FMC is still emerging and has many faults, it can be used in a secure VPN.

"FMC is not happening because the technology is lacking which means it is too costly, fraught with dangers, and requires an engineer every other day," Budde said.

"You can emulate a wireless system in a building [where] you can roam with your VOIP or mobile phone over a campus or business network, which is privately controlled so you can build a quality and secure network."

An IDC study titled From Triple Play to Multi Play: Comparison of Australian Telcos and Overseas Best Practices, found local telcos could be leading innovation within two years if Australia "follows the footsteps of France".