FireceWireless:Europe reported in January that the build up to the Christmas holidays saw the iPhone account for nearly 80 per cent of the contract sales made by France Telecom (FT) Orange. This historic level, said CEO, Didier Lombard, could be a problem given its near-monopoly of sales made by the mobile operator. In fact, problems will be manifold with coverage and capacity demands from this device, as well as its challenge to disintermediate the mobile operator's own enhanced services.
Increasing 3G coverage, to a degree, with HSPA, HSPA+ and LTE is worthwhile for mobile operators, although this will actually increase traffic throughout the network including in the radio access network elsewhere due to, so called, network effects.
Increasing raw bandwidth cannot be the only means to alleviating congestion. Demand is insatiable. Left to their own devices with cheap and unrestrained usage, some users in certain places--such as peer-to-peer file sharers sitting close to masts--will unacceptably impair performance for users with more modest data volume requirements who have greater need for service quality.
Networks need to become much more intelligent and flexible. However, there are both regulatory and technological impediments to this common sense approach.
Whereas America is softening on the proposed inflexible and economically dysfunctional strictures for network neutrality, Europe appears unmoved. The U.S. Federal Appeals Court has sharply questioned whether the Federal Communications Commission has jurisdiction to write, much less enforce, net-neutrality rules for the Internet. Google and Verizon Communications, past opponents in the Internet regulation debate, proposed compromise in a joint filing to the FCC recently. The companies said preserving an "open Internet" calls for "minimal interference from the government while acknowledging the role for appropriate oversight (and enforcement.)" Former European Union Competition Commissioner, Neelie Kroes, who is commissioner-designate for the Digital Agenda portfolio, is succumbing to political pressure from the MEPs. In response to formal questioning from MEPs in a January hearing, she replied that Internet providers "shouldn't be allowed to limit the access to service or content out of commercial motivation but only in cases of security issues and spamming."
On the contrary, commercial and technical freedom is required to attract necessary investments. The issue is particularly acute in mobile services. FierceWireless:Europe reported in November that Vodafone Europe CEO, Michel Combes, believes that additional revenues are needed to continue investment in the data networks, but without simply becoming high-speed dumb pipes that would continue to benefit the main winners in the mobile internet space, such as Google and other big search engines. According to Combes, ideas that could be considered to boost revenues include content providers paying operators to guarantee their content is carried over the network without disruption, and operators receiving a fee from micro-billing and providing location services. Vodafone is also offering its business customers the chance to pay a premium fee to guarantee a better service.
In addition to deploying faster radio, backhaul and core network technologies for additional capacity and coverage, mobile operators also need to rethink their associated IT systems strategies. Techniques such as traffic shaping with deep packet inspection are essential to temper peak bandwidth requirements and so that tiered services and pricing can be offered. Whereas network costs per bit must be reduced in line with data traffic growth per user, a diverse kitbag of business tools including policy management, subscriber data management, real-time charging, analytics, service delivery, data retention, assurance, fulfillment and media control are also required to reduce costs and boost ARPUs. Business and IT transformation can rationalize disparate systems and reduce costs while increasing revenues through flexibility and integration of the above capabilities. This will help grow staple service revenues with differentiated offerings such as premium-priced business class services.
These improved capabilities are also required for enhanced services that ride on top of the network, whether they are provided by third parties or the mobile operators themselves. For example, users like to access multiple services with a single sign-on, and access the same service through multiple devices and networks with just one user profile and service subscription. This creates the need for unified databases for subscriber management and authentication. In addition, mobile operators need to be able to differentiate service offerings on the basis of parameters such as maximum latency for chatty and other delay sensitive applications versus large scale bulk data transfer for which latencies of seconds, minutes or longer might be acceptable.
Next generation networks are as much about creating and integrating intelligent business systems as they are about deploying higher throughput. Telecoms and IT is, at last, converging.