Transcript Understanding Best Practices for Convergence in Broadband

Understanding Best Practices for
Convergence in Broadband
Anish Madan1 & Ravi Sharma2
A presentation for the
10th ATIE, Taiwan
7 April 2005
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© 2005. All rights reserved.
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Outline
 Overview of Convergence
 Case Study of a Next-Generation Service Provider
 Industry Best Practices
 Concluding Remarks
 Questions and Answers
2
Overview of Convergence – Definition
 Convergence of
 Networks and Technologies
(Mobile, Fixed, Wi-Fi, IP, PSDN, VPN)
 Terminals/Devices
(Handphones, PCs)
 Services
(Voice, Data, Multimedia)
 Regulated Markets
(Telcos, Broadcasters, Media Cos)
Blurring of boundaries between voice, data and
video delivery and applications
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Overview of Convergence – Essentials
 Voice
 VoIP
 Enhanced VoIP (IP Centrex, IP
Conferencing etc.)
 Data
 WAN: IP VPN
 Internet Access: xDSL, Ethernet
 Applications: Broadband and Mobility (including video
applications, gaming etc)
 Enterprise Specific
 IP PBX / IP Contact Center, Network
Security
 Networking
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Overview of Convergence – Broadband vs.
Narrowband
50.00%
90.0%
45.00%
80.0%
40.00%
70.0%
35.00%
60.0%
30.00%
50.0%
25.00%
40.0%
20.00%
30.0%
15.00%
20.0%
10.00%
nd
ai
la
Th
an
iw
Ta
ga
p
or
e
es
Si
n
Ze
ew
N
Ph
ilip
pi
n
al
a
nd
ys
ia
al
a
th
So
u
Broadband Penetration %
M
Ko
re
a
pa
n
Ja
In
do
n
In
di
Ko
ng
H
on
g
hi
C
Narrowband Penetration %
es
ia
0.0%
a
0.00%
na
10.0%
Au
st
5.00%
Broadband % of Total
Source: Frost & Sullivan
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Overview of Convergence – Revenue Composition
IP Centrex
1%
ILD
22%
IP Video
Conferencing
1%
Others
0%
Local VoIP
13%
Local VoIP
DLD
ILD
IP Centrex
IP Video Conferencing
Others
DLD
63%
Source : Frost & Sullivan
Data includes Australia. China, Japan, Singapore,
South Korea and Taiwan revenues in 2003
• Domestic long distance VoIP calls dominate in revenue terms
• IP Centrex, IP video conferencing and other IP enhanced services
revenue only nominal in 2003
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Overview of Convergence – Market Impact
 Significant impact on service providers and customers
 Service Providers
 New business model
 New opportunity
 Reduce OPEX
 Train & retain employees
 Next Generation Network and Services
 Customers
 Increased Options
 Possible paradigm shift in service adoption
 Sophisticated Customer Service Management
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Overview of Convergence – The New Ecosystem
Services can be in-house, outsourced and hosted
Revenues Outflow
High Investment
End User
Effective Value Proposition
Infrastructure Provider
Content / Application Mass and
Demand Mass
Content Aggregator
Content &
Application Provider
Critical Mass of Demand
Content/Services
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Case Study – FastWeb Triple Play
 FastWeb is a leading Broadband SP in Italy (www.fastweb.it)
ARPU per year € 780…
Data
Voice
Video
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FastWeb – Service Offerings
 Fastweb’s Marketing strategy based upon Triple Play service
bundles
 Voice
 Internet
 Video
 No single killer application: the real killer application is the
Service Mix
 Combination of Flat Rate and Pay Per Use tariff plans to match
specific customer needs
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FastWeb’s Innovative Services: Fastweb’s TV


FastWeb TV
Unified interface for content in all formats:
 Terrestrial broadcast: RAI, Mediaset, ...
 Satellite broadcast : CNN, Bloomberg, ...
 Pay-TV/Pay-per-View: Stream & TELE+
 Video-on-Demand
Integrated with VideoREC and Electronic
Program Guide


Video on Demand offer
First VoD licensing agreements with
US major film studios:
 20th Century Fox
 Universal Studios
 DreamWorks
Over 3,000 titles (up over 30% from
the end of the second quarter)
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FastWeb’s Innovative Services:
Business and Personal Video Communication
 FastWeb’s Video
Communication allows
business and residential
customers to video
conference:

Between different
locations

With other external
parties using FastWeb’s
services

With traditional ISDN
video conferencing
systems and through the
Internet with PC-based
web-cameras
Non-FastWeb
clients (ISDN)
FastWeb clients
FastWeb
residential
customers
Party 1
TV + TV Cam
PC + Webcam
Party 2
Internet
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FastWeb’s innovative services:
VideoREC
 Virtual VCR service:
allows clients to
record favorite free-toair TV programs (RAI,
Mediaset, ...) with no
need for a VCR or tape
 Easy and convenient
programming: just
click on the desired
show, directly on your
TV or on any PC with
an Internet connection
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FastWeb’s innovative services:
Wireless-Fidelity (“Wi-Fi”)
 Fast Internet at up
to 10 Mb/s from
any point of the
house
FastWeb’s
network
Access base
 No need for wires
or cables
 Fastest wireless
offer on the
market
 Access kit on sale
at only 250 EUR
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FastWeb’s innovative services:
IP VPNs and B2E
 Installed IP VPNs grew 85 (from 255 to 340) in 3Q 2002, confirming
FastWeb’s unique accelerated pace in this market segment
 10 Mb/s (scalable) bi-directional connection among different branches
and from employees’ premises to the corporate LAN, on FastWeb
network
 Service quality and security guaranteed through MPLS technology
and IPSec protocol
IP VPNs
Branch 2
FastWeb’s
server farm
Business-to-Employee
(B2E) services
Branch 1
Big Internet
Branch 3
Other
networks
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Industry Best Practices – Drivers of Convergence
90%
85%
Both residential and
enterprise users find IP
an attractive value
proposition
80%
70%
60%
53%
45%
50%
40%
30%
18%
20%
8%
10%
5%
0%
Cost
Global
Connectivity
Efficiency
Convergence
Bundled
Service/VAS
Marketing
Push
120%
100%
100%
95%
80%
73%
75%
60%
60%
53%
35%
40%
38%
33%
23%
20%
0%
Source: Frost & Sullivan
ERP
CRM
SCM
Email
Data Transfer
VoIP
Video
E-Commerce
Real Time
Collaboration
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Industry Best Practices – Industry Structure
Traditional Structure
Emerging Structure
 Supply demand match
 Services abundance
 Point to point
 Any to Any
connectivity
connectivity
 Distance & bandwidth
sensitivity
Technology Push
Market Pull
 Distance insensitive
 Service suites/total
Regulatory Arbitration
solutions/flexible
 Individual services/rigid
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Regulatory Framework – A Tale of Four Countries
• No national
broadband (triple
play) policy
• Light touch
• USO metric:
homes passed
rather than uptake
• Build-up of
national facilities
encouraged
• Technology
neutral
• Broadband vision
(E Korea 2005,
Cyber Korea 21)
• Sharing
• Unified regulatory
infrastructure and
facilities
• Policies for
competition in
voice, data &
mobile
• Stimulating
supply of content,
applications &
services
regime (Multimedia
&
Telecommunication
s Regulatory
Commission)
• Hands off internet
services regulation
• Encouraging
SMEs to e-biz
• Competition of
facilities-based SPs
• Creating a
secondary market
for radio spectrum
• Promotion of
broadband network
building (loans, KII,
Internet usage,
public/education
sectors)
• Promotion of
multimedia supercorridor and
flagship projects
• Possible
competition
between
incumbent,
competitive 3G
carriers and CATV
operator
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Regulatory Best Practices – Issues
 Licensing of all existing and new services as they emerge, under
the ambit of convergence
 Licensing fee – Auction, beauty contest or free for all?
 Service area – Universal Service or roll-out Obligations
 Setting an appropriate Universal Service incentive
 Creating a level playing field for incumbent or competitive,
standalone or full service operators
 Interconnectivity and tariff agreements
 Numbering and addressing issues, directory and look-up
services
 Regulation of shared facilities, example infrastructure and OSS
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Industry Strategies for Growth
•
•
•
•
Stabilize voice revenues
Velocity and shelf-life of Next-Gen services
Open platforms and business models
One-touch for the customer
• Increase data revenues
• Grow an Internet based economy
• New Generation networks
• Applications
• Critical mass of subscriber services
• Allow SPs the opportunity to “lock-in”
customers
• Recognize that access and services are
evolving separately
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Concluding Remarks – Moving Up the Value Chain
• Facilitate environment for high
adoption of new technologies;
• Availability of latest services with
service quality;
• Competitive Cost for these services;
• Skilled IT workforce
Technology
Regulatory
Policy
Consumer
Markets
• Knowledgeable and sophisticated user
communities
• Drivers for sustainable growth
• Support for open competition
•
•
•
•
Strengthen regulatory framework;
Consumer advocacy
Enable Growth of innovation drivers
Availability of workforce with specific
skill sets at competitive costs
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Concluding Remarks – The Convergence effect
 Benefits predominantly for end user
 Service providers
 Core competency based
 Advantage Competition: Leap-frogging with Cost and Scale
 Content/Application Developers/Providers also benefit
 Create green-field applications and opportunities
 Customers will not pay; unless …
 They can’t do without it (the utility of convergence)
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Thank You
© 2005. All rights reserved.