CONFERENCE BRIEF: Speed-based pricing, tiered broadband

In his keynote at this week's Carriers' World in Hong Kong, CSL CEO Tarek Robbiati, the only wireless operator invited to the stage, started off by stating the obvious -- “the future of broadband is wireless.” He cited figures showing that mobile data traffic is growing 2.4 times faster than the growth of fixed broadband data traffic.

Robbiati reminded the audience that data speeds have grown from 40 kbps with GPRS in 1998 to rates soon to be approaching 150 Mbps with LTE. He called that exponential jump nothing short of a revolution. “But there’s still a lot of work to do for the industry as a whole. The fundamental fabric of wireless networks has to change to be all IP.”
The inhibitors to this move, he said are legacy systems. “Sometimes operators aren’t bold enough to question their legacy infrastructure. Part of the problem is that operators with an engineering-based culture, where people are often too enamoured with their old technology, don’t make the tough decision to move on.”
In the Q&A at the end he said the company is no longer just a mobile operator but has become an ISP. “We have to fundamentally change the way we charge for bandwidth. We’ve introduced speed-based pricing, which takes a lot of educating the customer.”
Deutsche Telekom’s Falk von Bornstaedt made a pitch for tiered services for consumer broadband. He complained that when connected to the internet, you can’t pay for priority delivery of email or downloads. On airlines your bags get priority treatment when you fly business class, but operators don’t offer customers a way to pay for priority service. With the huge growth in IP traffic, he said people are now requesting quality.
Matthew Sturgess from content delivery network (CDN) Limelight called on telcos to move to a CDN rather than build their own.
He said the “pipes are bursting” – not so much subsea capacity but the last and middle mile. “Investments in infrastructure aren’t likely to be offset by increased revenue from consumers. In fact it’s the opposite.” He questioned whether telcos can build out the network themselves on a global scale and guarantee QoS.
The CDN market today is a modest $1.4 billion (€1.03 billion) and expanding at 12-15% annually.
Giving a status report on the APAC capacity market, Terabit Consulting MD Michael Ruddy noted that terrestrial networks are gaining importance as restoration paths to counter threats from earthquakes and man-made causes. With TPE, AAG and Unity now online, by the end of the year more than 12 Tbps (about 50% of total trans-Pacific capacity) will be lit.