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NGN: Profitable Solutions

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VoicenData Bureau
New Update

With carriers and service providers hunting for additional

revenue streams through converged networks that bring together wireless,

wireline, and IP networks, growth of next generation networks in Asia will be

faster.

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The fact that convergence is also sought in many areas of

network design as part of the effort to reduce costs, and create innovative

services and applications, would add fuel to the growth in Asia. However, Indian

operators are still cagey about wide deployments.

The 2nd Annual Next Generation Networks Asia 2007, a

Frost&Sullivan Executive MindXchange Summit, held in Singapore on August

28-29, addressed key NGN strategies adopted by service providers. The second

chapter of NGN, also known as NGN 2.0, follows the concept of Web 2.0,

positioning the network as a platform for convergence, redefining lifestyle

services to form the ultimate DNA for enhanced user experience.

Wilfried Schrupp, head,

Sales, Broadband Access, Nokia Siemens Networks, Asia Pacific, Singapore,

addressing the audience on reinventing the fixed network value proposition
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The two-day event saw participation from telecom majors such as

Nokia Siemens Networks, Cisco, BT, Datacraft, ECI Telecom, and IBM, while a

number of service providers from Asia Pacific region shared their plans and

concerns.

Marcelo Blatt, director, Strategic Marketing, Transport

Networking Division, ECI Telecom, said key challenges include difficulty in

generating revenue and increasing ARPU. Developing new services and content, and

expansion to new sectors would be one of the solutions. Minimizing total cost of

ownership and aligning investment with service uptake, network convergence,

leveraging existing operation mode would assist in reducing capital and

operational costs. "Market trends are driving networks evolution,"

Blatt added.

Wilfried Schrupp, head, Sales, Broadband Access, Nokia Siemens

Networks, Asia Pacific, says that Internet and telecom growth is going hand in

hand. Globally, fixed line users are expected to marginally grow from around

1,300 mn in 2007 to around 1,350 mn in 2010, while mobile and Internet

subscribers will touch 1,800 mn from 1,400 mn in 2007, and 3,700 mn from 2,900

in 2010.

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According to Schrupp, combining fixed and mobile traffic would

bring additional savings in Capex and Opex and carrier Ethernet is the most cost

effective solution. The salient features of carrier Ethernet are drastic

simplification of network architecture, most cost efficient transport by using

the lowest possible layer, enabling end-to-end connectivity with differentiated

QoS. "Wireline solutions are the most cost effective for bandwidth

provisioning since they are as close as possible to the consumer through FTTX

solutions for transport through QoS supporting carrier Ethernet solutions,"

he added.

Marcelo Blatt,

director, Strategic Marketing, ECI Telecom, Israel, speaking on innovation

in the next generation transport networks

According to Sharat Sinha, director, Service Provider

Operations, Cisco Systems, Apac, a Cisco research among the US broadband users

in 2006 shows that consumers understand and value connected life services. As

per the survey, 40% are extremely interested in the services, while 37% are

moderately interested, and 20% are not interested at all. On an average,

consumers expect to pay $13 per month for added connected life services.

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According to Sinha, service providers must take advantage of

current customer perceptions. Consumer uncertainty reflects market immaturity

with more than 1 in 5 respondents (23%) not knowing their preferred provider.

Cable MSOs have a strong lead driven by video presence and multi-product

bundling. Mobile providers' lack of presence in the home and minimal

multi-product experience has contributed to low consumer mind share.

Security is also a barrier that must be managed effectively. A

connected life service would make households vulnerable to security intrusions.

Storing all our household digital media content in a central location would make

that information more secure.

Ralph Hengstenberg, head of portfolio management, Global Telecom

Markets, BT Global Services, says that IMS faces challenges though it offers

immense benefits. Benefits include cost reduction from running multiple services

over a common platform, revenue generation from new applications developed or

brought from third party developers, improved user experience generates

stickiness, and less legacy with potentially expensive platforms to maintain.

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Ralph Hengstenberg,

head, Portfolio Management, BT Global Services, Global Telecom Markets,

UK, highlighting on IP Multimedia Sub-System (IMS): evolution toward an

all-IP Fixed Mobile Convergence, its development and impact on business

plans
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Hasnul Suhaimi, president and

director, PT. Excelcomindo Pratama Tbk, Indonesia and Baburajan K, senior

assistant editor, VOICE&DATA, discussing the current development of

Triple/Quadruple Play strategies and their ramifications for both fixed

and mobile service providers.

Getting the business case to work based on realistic cost

savings, marketing understanding and user behavior are the main challenges.

Hengstenberg feels investment in IMS should be linked with

investment in NGN, while the business case should be on the cost savings rather

than revenue from new services. Operators should launch more IMS related

services to slowly build IMS target infrastructure, and ensure revenues and

economies of scale. "There is no IMS killer application, but there might be

a killer mix of services. Extensive testing is needed before commitment is

made," he added.

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IPTV is slowly taking off in the country, but strategies framed

by operators in other countries can be learning points for Indian players.

"IPTV is emerging as a critical component of service

provider strategies in Asia. Competitive pressure, falling voice ARPU, and

sustaining broadband growth are the main drivers. Besides this, the changing

nature of content is placing pressure on the traditional broadcasting

model," says Nitin Bhat, vice president, ICT Practice, Frost&Sullivan.

IMS should

be linked with investment in NGN, while the business case should be on the

cost savings rather than revenue from new services

After launches by AT&T and Verizon in the US in 2006, Asia

could see more launches in the near future. In America, 5% of subscribers use

IPTV, while in Europe the percentage is 67% and in Asia Pacific it stands at

28%. Full-fledged video and attractive pricing have been the initial drivers for

IPTV service. Slowing broadband growth after certain market penetration level

and focus on maximizing return on investment will add fuel to the IPTV growth.

According to Bhat, IPTV providers need to evolve to the

experience orchestrator model over a period of time, and IPTV should be viewed

as the component of a large strategic transformation. IPTV should be launched

with a five-year transformative outlook from a strategic and financial

perspective.

Triple play services need 25-100 Mbps per user, while 20-30 Mbps

is required for IPTV, 5-10 Mbps for Internet and 0.1 Mbps for VoIP. In the new

generation, broadband drivers are home entertainment, HDTV, networked game

client, dual mode Wi-Fi handset, etc.

There is no single business model; choices are dependent on

market dynamics, infrastructure payback, and content supply of the country. IPTV

should be designed as a scalable platform both from a consumer experience and

network rollout perspective, where content is just one piece of this platform.

Implementation is one of the biggest challenges for IPTV at present, Bhat added.

Globally, network operators have started rolling out all-IP next

generation networks. The move to an IP-based infrastructure is a natural

evolution for fixed network operators as broadband services, including VoIP,

migrate from PSTN onto IP networks. Recently, it has become apparent that fixed

line operators view NGN as the key to their future. Industry will see more such

initiatives from operators soon.

Gyana Ranjan Swain





gyanas@cybermedia.co.in

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