Transcript Convergence

Fixed-Mobile Convergence Study
IIR Mobile Billing Systems 2004
Dr. David Watrin, Swisscom Innovations,
[email protected]
Agenda
 Swisscom presentation
 The drivers for Convergence
 The Convergence approaches & strategies
 Open questions/issues
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
2
Swisscom Innovations:
Sustained innovation as a business rationale
INO’s main mission regarding the Swisscom Group is
to be:
 the central source of innovation
 the major source of long-term technical strategies
 the preferred technical consultant
with a strong business focus.
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
3
An internal yet independent central unit
CEO
Group Communications
Group Human Resources
Group Operations & Related Businesses
Group Finance & Controlling
Group Information Systems
Strategy & Group Steering
Swisscom
Innovations
Swisscom
Fixnet AG
Swisscom
Mobile AG
Swisscom
Enterprise
Solutions AG
Swisscom
IT Services
AG
Swisscom
Systems AG
debitel AG
Group Headquarter
Group Companies
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
4
Swisscom Mobile
 Switzerland's leading provider in
the Swiss mobile
communications market with a
66% market share
 3.8 Mio NATEL® customers
 25% of Swisscom Mobile's
shares are held by the Britishbased Vodafone Group Plc and
the other 75% by Swisscom Ltd.
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
Swisscom Mobile Customers
Prepaid / post-paid customers (in Mio)5
Swisscom Fixnet

Within Swisscom Fixnet the different
business areas generally act
independently:
– Retail Business (sale of network
services and products)
– Swisscom Fixnet Wholesale
(sale of network achievement)
– Customer Care
– Operator Services (information
services)
– Payphone Services (public call
boxes)
– Cards (Taxcards, Prepaid
Cards)
– Bluewin (sale of Internet
services and products)
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
Swisscom Fixnet in figures
Net turnover
2003
(consolidated)
CHF 5.856 billion
Private customers 2.95 million
Business
customers
296'000
ADSL subscribers 389'000
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Context of the presentation
 This presentation shares results of a task at Swisscom
Innovations in the context of an exploration project
 An official statement from Swisscom CEO, Jens Alder,
dating back from August could be found in the press
– Swisscom Fixed and Mobile will be kept separated at
least for the next three three years,
– Currently there is no concrete plan for a fusion.
– Furthermore a fusion would raise legal implications
(e.g. the 25 % equity of Vodafone) which are not fully
assessed
(http://www.espace.ch/artikel_9538.html)
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
7
But, … what are the roots of the nonMobile
convergent situation?
Fixed
 Non interoperable technologies,
yes but…
 In the mid 90’s Telecom Markets
are liberalized. Historical
Operators must grant their
competitors an access to their
fixed network.
Operator
Operator
Front
Office
Systems &
Processes
Front
Office
Systems &
Processes
Back
Office
Systems &
Processes
Back
Office
Systems &
Processes
 Mobile Telephony was a new
market… and a promising one!
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
8
A decade later, prices are dropping but
we still don’t observe a convergent
price…
Development of average fixnet and mobile prices in
Switzerland since 1998 (year of market liberalisation)
SFr. 3.00
Fixnet: costs of a 3min call
(long distance, peak tariff)
SFr. 2.50
Mobile (to fix): costs of a 3min call
(peak tariff, most common type of
subscription)
SFr. 2.00
SFr. 1.50
SFr. 1.00
SFr. 0.50
SFr. 0.00
1998
1999
2000
2001
2002
2003

Source:
http://www.bakom.ch/imperia/md/content/deutsch/telecomdienste/grundlagenun
dkonsultation/fernmeldestatistik/datenvombakomerhoben/stainofiziellejuni04.pd
f
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
9
But new & innovative pricing schemes
allowed Fixed-to-Mobile substitution…
 The O2 case in Germany
– “Homezone” (“Genion”) is a single-phone scheme
employed to encourage fixed-to-mobile
substitution
– Customer can use mobile phone to place calls
within 500 m from the home zone for the same
price as landline
– 74% of O2 new adds sign up for the “Homezone”
– ARPU increased to €340/year
– 50-100% usage increase within the home zone
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
10
New technologies have the potential to
reinforce this substitution
OnePhone
 Dual mode DECT/GSM phone
 300 m from the home zone calls
were routed via PSTN network, and
switched to [Cellnet’s] GSM in other
areas
 Two separate subscriptions
 Two bills
 No convenience: need to switch
manually between the networks
 Size of the handset
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
 High cost of the handset
BluePhone
 Future fixed-mobile convergent
phone (GSM & Bluetooth-DSL)
(Variant based on WIFI & BB)
 Incoming and outgoing voice and
data calls within the “BlueZone”
routed via the fixed line
 User benefits:
– Better in-building quality
– Lower call cost
– One handset, one number
– One bill
– Seamless handover
 The partnership with Vodafone
allows BT to act as an MVNO and
avoid Fixed-to-Mobile substitution
11
Fixed Operators are also facing a new
competition from Cable Operators
 In July Cablecom
(Switzerland) launched its
Triple Play offer
 Free calls during evenings and
WE
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
12
However Fixed operators still have
strong arguments and are starting a
moveand broadband capacity are
new
Reliability
still better than what Mobile Operators
can offer
 SMS over fixed network
 Convergent Data Network
– VPN Unifié service, based on FT and Orange IN
focused on corporate users
– Virtual network between mobile phones and company’s
extensions
David Watrin,
– Private numbering plan and tariffs
IIR Mobile Billing Systems 2004,
27-30 September 2004
13
Major operators founded the Fixed
Mobile Convergence Alliance (FMCA)
 The Alliance aims to accelerate
the development of FixedMobile Convergence products
and services
 The establishment of open
standards is a key requirement
to allow customers a greater
choice of handsets and devices
and to enable interworking
between vendor equipment
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
14
The vision for Fixed Mobile
Convergence
 Convergence is the digitized takeover of
communications and information in a network and
device agnostic manner producing new services
Network
Convergence
Service Convergence
Voice and Data
Circuit-Packet
Device
Convergence
Fixed-Mobile, One Bill
Unified Channel,
Bundled Services
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
15
Why convergence? The operator point
of view
 Convergence should not be seen at an internal
competition. There is a clear advantage from a group
perspective to bring new products to the market
 Mobility is an add-on in the competition against cable
operators
Mobility
VOICE
DATA
VIDEO
 A tighter and more integrated relationship with the
customer reduces churn
 Infrastructure costs could be reduced on the long term
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
16
Why convergence? The customer point
of view
 Full mobility allowing access to personal information
and content at anytime and anywhere: e.g. address
book, agenda, music, video
 Transparent network for the customer: e.g. One
number one device for Voice services
 One commercial partner: e.g. one bill
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
17
Convergence: the brave new world!
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
18
Telecom Operators are presently
favoring a network based approach to
convergence
France Telecom announced an all-IP strategy based
on IP Multimedia Subsystem
3RD PARTY SERVICES
LEGACY SERVICES SCP
APPLICATION
LAYER
NONTELEPHONY
MULTIMEDIA
SERVERS
IM-SSF
PARLAY,
SIP,
HTTP,
XML
MULTIMEDI
A
TELEPHON
Y
SERVER
SUPPLMENTA
L
MULTIMEDIA
SERVICES
CSCF

Ability to have multiple application servers participate in one
session for multiple services to a single endpoint

Access agnostic, roaming, multimedia, …
–
Profile and
Preferences
Mgmt
SERVICE BROKER
SESSION
LAYER
NETWORK
CAPABILIT
Y
GW

Open standards based
–
HSS

SC
wireless, 3G wireless, WiFi, DSL, FTTP, …
Network, application, enterprise, …
Centralized user profiles
–
Shared across multiple applications
DSL, 802.11, GPRS
END POINT
AND GW
LAYER
Non SIP

IAD
MEDIA
SERVE
R
SG &
MEDIA
GW
–
PSTN
SIP
Integrated user interface / portal

Service brokering between applications
–
IP Multimedia Subsystem (IMS)
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
Ease of use, access from anywhere
Ensures interoperability of new converged services between
subscribers
19
Such a focus might alter the
convergence vision
SS7
AUC
Signaling plane
MAP MAP EIR
Subscriber
DTAP
HLR
MAP
Other MSCs
VLR
BSC
MSC
Data plane
PSTN
BTS
Switch
ISUP
Simplified network architecture of GSM
Simplified network architecture of PSTN
Services, Content
IP Multimedia Subsystem
Access
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
PSTN, ISDN, xDSL, etc.
Access
GSM, UMTS, etc.
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The OSS/BSS convergence should also
be considered in the early phases
 Experts say that IMS will reach its full maturity in 5
years
 OSS/BSS convergence might be reasonably
achieved in 3-4 years
 In the manner of the O2 example an early OSS/BSS
convergence might offer an interesting alternative
Network
Convergence
OSS/BSS Convergence
+3-4Y
+5Y
Convergence with seamless handover
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
Market preparation; Organisation changes
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The different strategies for an
OSS&BSS Convergence
 Strategies:
– Anew
– Conquer
– Integration
– For each scenario: internal convergence – IN/IT or
Pre/Postpaid
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
22
The different strategies for an
OSS&BSS Convergence
Build Anew
Internal Convergence
Conquer
Mutual Integration
+3-4Y
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
23
Why an internal convergence? A focus
on Billing
Customer
Prepaid Postpaid
Front Office
Systems & Processes
Data
Back Office
Systems & Processes
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
Customer
Prepaid Postpaid
Front Office
Systems & Processes
Retail
Voice
Back Office
Systems & Processes
Customer
Prepaid Postpaid
Front Office
Systems & Processes
Data /
Data /
Content
Content
Wireless
Voice
Back Office
Systems & Processes
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Content Billing might justify Pre- and
Postpaid convergence
 The necessity to monitor content expenditure on the
postpaid bill will require a real-time assessment of
the balance and real time service control
 Such a balance management will be redundant with
the functionalities from the prepay system
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
25
The “build Anew” strategy
Prepaid Postpaid
Prepaid Postpaid
Prepaid Postpaid
Implementation
Mediation
Component, Rating
Engine,
Front Office
Front Office of a new convergentFront
Office
Systems & Processes
Systems & Processes
Systems & DB,
Processes
Invoicing Engine, Customer
Financial system…
Data
Back Office
Systems & Processes
Retail
Voice
Back Office
Systems & Processes
Data /
Data /
Content
Content
Wireless
Voice
Back Office
Systems & Processes
 Operators are usually not ready for such a costly
approach
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
26
The “Conquer” Approach
Prepaid Postpaid
Prepaid
Front Office
Systems & Processes
Data
Back Office
Systems & Processes
Prepaid Postpaid
Postpaid
Front Office
Extended
SystemsApplication
& Processes
Retail
Voice
Back Office
Systems & Processes
Data /
Data /
Content
Content
Wireless
Voice
Back Office
Systems & Processes
 It can be expected that one system is more flexible than
the others
 Such a solution offers a reduction of the migration effort
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
27
The “mutual integration” strategy: an
intermediary Pre- and Postpaid Convergence
 Active Mediation by
leveraging the existing
components offers an
interesting approach
 However other ones are
also foreseable
* Openet’s property
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
28
The “mutual integration” approach
would be based on open interfaces
 The integration approach goes through a modularization of the
functions and open interfaces
 The harmonization of the Customer DB can face “philosophical” issues:
MS-ISDN vs Fixed telephone number. The TMF SID could offer
solutions
Convergent Billing
Rating & Discounting
AAA
SCM
BM
Rating & Discounting
AAA
SCM
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
AAA
SCM
BM
OSA Parlay,
Jainslee,
Web Services,
XML, …
OSA Parlay,
Jainslee,
Web Services,
XML, …
Data
BM
Rating & Discounting
Retail
Voice
Wireless
Voice
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Convergence will impact the whole
business
Customer Experience
Convergence
Service
Usability
Basis of Value
Creation
Service
Economics
Revenue Models
Business
Models
Service Pricing
Business Design
Business Performance
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
30
Convergence will challenge the
organization
Any Service
“One Office”
Business Systems
& Processes
Customer
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
31
Some remaining open questions
 The ownership of the converged network and its
related regulation
 The interconnect revenues in regards to the
evolution towards an all-IP environment
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
32
Conclusion
 Time and cost of the different scenario have to be
assessed
 The adequate strategy should be derived from these
 Telecom Operators have to tackle the organizational
challenges laid by convergence
 Telecom Operators need to tackle the next generation
services
 When should the implementation of Convergence start?
David Watrin,
IIR Mobile Billing Systems 2004,
27-30 September 2004
33