Battlegrounds change, new competitors emerge

This issue's Telecoms HotHouse takes a close look the rapid move to NGN and the importance of adopting common standards allowing interoperability between networks owned by different organizations

Taking part this time were senior representatives from NTL, Siemens Communications UK, Aurora Kendrick James and Ubiquity Software.  Alan Cane, senior technology editor of the Financial Times was on hand to report as the panel debated what will happen in the race to deploy the next generation networks and what can we expect to see.
Within five years, much of Europe will be served by interconnected, high-capacity communications networks providing customers with a multiplicity of services delivered through simple consumer interfaces to any device, fixed or mobile.
This was the unanimous view of this month's Telecoms HotHouse participants: their conviction that so much progress toward what are known as NGNs would be made so rapidly was based in part on the developments seen in mobile telephony and the internet over the same time scale.  That urgency was reflected in the decision of the UK's Office of Communications (Ofcom) in March to establish an industry body to oversee progress in the UK where NGN deployment is expected to be rapid.
A principal role of the Ofcom body, announced the same day as the HotHouse debate, will be to ensure that BT's NGN, called 21st Century Network (21CN), and now under construction, will not damage competition either by disrupting existing businesses or preventing new players having equal access to the network.
The HotHouse panel warned, however, that the benefits of NGNs to consumers would only be enjoyed fully if the industry adopted common standards allowing interoperability between networks owned by different organizations and where the underlying technology was invisible to the customer. 
A danger is that incompatible networks might be built creating barriers to progress either by accident or through malicious intent. 
The telecoms regime in the UK is different from much of Europe.  BT operates the only ubiquitous telecoms network, and competitors must interconnect with BT's ageing copper lines to terminate residential and most business calls. The cable operators NTL and Telewest, recently merged, also operate country-wide networks providing the triple play of voice calls, Internet access and television through two networks, one overlaid on the other.
These two large, well-funded organizations are expected to bear the brunt of constructing the UK's NGNs, networks which will essentially use IP to carry digital communications of all kinds.  Derek Cobb, NTL/Telewest's director of network architecture, said the company started work on an IP network in 2000 and has much of the technology in place: 'We are pretty well set on that next generation story.'
BT, on the other hand, started 21CN rather later, but as Keith Harvey, head of fixed networks for Siemens Communications, pointed out, progress has been rapid. Siemens is one of a group of eight vendors cooperating to build the network.
'I've been amazed at the way that everybody has actually worked together to make this happen.  It has led to a lot of innovation.  But it is an enormous undertaking to migrate 30 million lines to the next generation in five years.'
For BT, it is a matter of survival as traditional revenues are eroded by technology and competition.  But the move to broadband will create important opportunities, Harvey argues. Current networks are vertical silos: a particular product runs over a particular network. A multi-service network, which is what NGNs are all about, could theoretically make it possible to deliver single services to particular customers.


'You're addressing a market of one,' Harvey said.  'In Siemens we see MPLS in IP networks and carrier Ethernet as the way forward.'  MPLS and carrier Ethernet together make it possible to converge multiple services onto a common transport medium.
But to Matt Atkinson, managing director of Aurora Kendrick James, a billing and management information systems house, the number of individual NGNs that will be created and the technology used is an irrelevancy.
'Does it matter‾  From the perspective of the end-user, the whole point of convergence and NGNs is the user experience,' which, he suggested, should mean any combination of voice, video and data using any combination of fixed and mobile services accessed from any location by any device.  'We are moving from the situation today where I buy an underlying piece of technology or a line to tomorrow where I buy a service that delivers improvements to me.'
It is an argument that resonated with Naresh Chouhan, marketing director, Europe, Middle East and Africa, for Ubiquity Software, a company that helps telecoms groups develop next-generation services. He emphasized that the way services are developed will have to change.  In particular, there will have to be a move away from proprietary technologies which, in his estimation, have hindered market development.
'The key is a flexible underlying architecture that allows you to construct a service quickly and tear it down equally rapidly.  Take, as an example, the Olympics which run for a fixed period of time.  You might want to create a broadcast service for the duration of the Games and then dispense with it. It took BT traditionally over a year to develop a new service.  We have been able to develop a new service for BT in two weeks, saving it much money and resources.'
The panel agreed that network ownership would be important although no operator would want to be seen merely as a 'bit carrier' without the possibility of adding value to basic transport.    The future lay, however, with a new generation of service providers, many of them new to the telecoms business and yet to declare their interest.
Atkinson pointed out that while the underlying networks must talk to each other, it would be the responsibility of what he described as 'new' service providers to piece together the commercial relationships with the content providers and network operators to deliver services to the end-user. These new service providers would likely be organizations with better marketing and customer relationship skills than telecoms companies. He pointed to Tesco, the supermarket giant, as an example of a non-telecoms company that had become one of the largest service providers in the UK 'in no time at all' without owning its own infrastructure.
He said: 'The future is about organizations that can adopt a service orientation, pulling together those underlying services and delivering quality.  It could be your television provider, a facilities management company or an outsourcer.  But it will not necessarily be a classical telecoms operator like BT or NTL/Telewest.'
The kinds of services that would be on offer from these new service providers proved less easy to define, perhaps because many of them have not yet been invented. Harvey, drawing on his experience of Siemens' research in advanced telephone systems, argued that converged networks would mean that the end-user would see no operational difference whether using a fixed or mobile network.  The only difference would be in the tariff structure.  Customers would find that calls would be transferred seamlessly from fixed to mobile networks and vice versa as they moved from the street to home or office and the tariff would change at the switching point.  He anticipated docking stations for the mobile handset in the home with the facility, for example, to transfer calls to the television.  A 'smart hub' would make it possible remotely to turn on lights or check security via video cameras.


Chouhan saw the future in more sociological terms. 'A lot of existing networks are simply one person talking to another person.  The key facet of NGNs will be the ability to link together lots of people as a community. A family, for example, could arrange a 'conference' call at a specific time -- not in the corporate sense, of course -- but they could call and share information with each other: a cinema review, perhaps, or photographs. So a lot of what we believe will be the next-generation applications will be based around the community, conferring the ability to combine what have traditionally been point services into one seamless service.'
Some services, no matter how clever, would find few takers Cobb argued, pointing to the fact that most people would prefer to buy an alarm clock than to rely on BT providing an early morning call. He, however, found his organization's video-on-demand service useful for catching up on missed TV viewing. 'Will television become a wholly personalized experience‾  My personal feeling is no: broadcast technology works perfectly for things like the football World Cup final. But at present I can take the entire contents of my desk home with me (much to the annoyance of my wife).  Extending that to the consumer space, the ability to take my broadband connection, my TV subscription where I want to, is potentially attractive.'
If there was a single topic that dominated what was a broadly based debate, it was the importance of common industry standards.  These would enable networks to communicate seamlessly and encourage software developers to invest in new applications.   Chouhan said vendors had to realize that the whole notion of convergence is predicated on strict adherence to standards so that everything will work together. He warned that some suppliers might try to sneak in a proprietary protocol to seize some kind of competitive advantage.
'That is not going to work. Users are not going to accept that because they will be unwilling to twist a button when they don't need to.'
Cobb agreed, pointing to the kind of hugely successful market that the GSM standard had created in the mobile phone environment.   Harvey argued that major suppliers had to be committed to openness.   Rigorous enforcement would be required because it was common for two systems both apparently written to the same standard to fail to communicate.  There was no room in tomorrow's networks for 'interpretation' of protocols.
BT, NTL/Telewest, Tesco and so on are all large, powerful companies.  Will there be a place for the small company in NGNs‾  The panel reckoned the UK regulator Ofcom had done a difficult job reasonably well in promoting a fair and level playing field for all comers.  Atkinson accepted that the huge investment required to build NGNs means that role was reserved for the largest players, 'but once that infrastructure is in place, then it becomes easier for the smaller players to come in.'
Chouhan said his company, a small player, was testament to the ability of the smaller groups to play a part in the overall food chain.  'We are good at what we do, and there is always an opportunity for the best-of-breed to partner with large companies like Siemens.'  Cobb said it was inevitable that infrastructure provision was consolidating around a few large players, but services and systems integration could be fertile ground for the smaller company.
A final comment from Harvey summed up much of the discussion: 'Competition is moving to a new level.  The competitors aren't the traditional competitors any more.  Companies like BSkyB are buying their way into the telecoms marketplace.  Companies that want to own the home are coming in from the computer side as well as the traditional telecoms side.  The battlegrounds are changing and the competitors are changing, and I think it's going to remain that way.'
For more information on the Telecoms HotHouse visit