EMEA 2006 12.indd - Connect-World

All articles are available for download at www.connect-world.comCONTENTSConnectionsFirst words from theEditor-In-Chief’s deskby Fredric J. MorrisImprintSubscriptionPromotional FeaturesAlcatelCBOSS5 9 14 2023 26 29 3134 37 40 4548 51 54 576062All articles are available asdownloads. Visit us online atwww.connect-world.comAdvertisementsRedback NetworksKeymileOKSiJENDubai Internet CityNetopiaIntracomITU Telecom WorldDeteconHP Communications World 2006VON EuropeCarriers WorldINTEC3GSM World CongressITU WSISFuturecomEEBCPTCConvergence IndiaTerrapin (Voice over everything)JDSUEricsson22641115IFC34781216192225283336414247505356IBCOBCRegulationIP telephony, the telecom revolution, and regulatory challenge 5by Marc Furrer, President of the Swiss Federal Communications CommissionWireless VoIPVoIP over WiMAX and wireless broadband 9by Tzvika Friedman, CEO, AlvarionVoIP, the WiMAX killer app? 14by Mike Pratt, President and CEO, Aperto NetworksVoIPThe growing rush to VoIP 20by Rupert Galliers-Pratt, Founder and Executive Chairman, Vistula CommunicationsQuality calling - VoIP comes of age 23by Gad Tobaly, CEO and Member of the Board of Directors, InfoVista.Seamless communications 26by Peter Newcombe, President, Carrier Packet Networks, Nortel, Europe,the Middle East and Africa (EMEA)The evolution of VoIP - the challenge and business case 29Cees de Jong - Senior Vice President, Global Telecom Marketing, Atos OriginIPTVIPTV - open issues 31by Helmut Leopold, Chairman, Broadband Services ForumSecuring the brave new TV world 34By Jeremy Thorp, CEO, Latens SystemsThe IPTV quality challenge 37by Peter Collingwood, Regional Vice President, Europe, and Middle East & Africa,JDSU Communications Test divisionIP TelephonyThe changing IP Telephony business model 40by Allen Timpany, founder and CEO, VancoIP telephony - bring on the change 45by Vivek Badrinath, Executive Vice President, Products, Technology & Innovation, OrangeIP NetworksNetworks in the age of IP 48by Mauro Righetti, CEO and board member, ItaltelNetworks and Regional DevelopmentICT and hope in Kenya 51by Dr Kai Uwe Wulff, Managing Director, Kenya Data NetworksArab telecommunications marketsDiversity and growth in the Arab telecom markets 54by Jawad J. Abbassi, General Manager, Arab Advisors Group,a member of the Arab Jordan Investment Bank GroupIMSCreating tomorrow’s communications services today 57by Bahaa Moukadam, Vice-President, IP Telephony, Spirent CommunicationsDevice ManagementDevice management for IP voice and data 60by Gene Wang, Chairman and CEO, BitfoneVoice and ApplicationsVoIP and market change 62by Tony Lavender, Director of Telecoms Research, and Mark Main, Senior Analyst, OvumIssue 2006 1

CONNECTIONSVoIP - Changing the Voice/Data ModelThe theme of this issue of Connect-World EMEA is VoIP - Changingthe Voice/Data Model. We have invited regional leaders of governmentand industry to examine what the widespread adoption of VoIPmeans to the people, the businesses, and the ICT sector in the regionand how it will lead to the growth of the economy, the availabilityof education, jobs and social services.VoIP is among the most interesting Internet-related developments.VoIP took a medium originally destined for data and the written wordand turned it into a vehicle for telephony. Now, VoIP seems destined,with time, to take over from traditional telephony. Every operator inthe world is either migrating toward VoIP or planning for the daywhen they must. Economics, cost, dictate this move towards VoIP;it is much cheaper to transmit voice on a data network. Since VoIPuses data networks, it stimulates the extension of both fixed andwireless broadband networks to areas never before served by networksof any sort. It seems ironic that high-speed broadband networkswill be the first to bring communications services to regionsthat never had even a simple telephone. With a network based upondata transmission, operating companies can offer both residentialand business users a broad range of voice, data and video services -indeed, given the low-cost, commodity-like nature of VoIP, their verysurvival depends upon it.Connect-World Europe, the Middle East and Africa is an officialmedia sponsor of Carriers World (26-28 September, London, UK),Broadband World Forum Europe(9-12 October, Paris, France), andBroadband Russia & CIS Summit(Moscow, Russia, 21-22 November).In addition to our usual mailings, copies of Connect-World will bedistributed at these shows.In each of Connect-World’s editions - Global, Africa and the MiddleEast, Asia-Pacific, Europe, India, Latin America, and EMEA - globaland regional leaders look at the issues that drive the developmentof their home regions or countries. Current discussions centre uponthe changes wrought in industry and society by the latest generationof information and communications technology, especially Internetprotocol digital communications, broadband and personalised services- and how both business and society are changing, need tochange, as a result.Connect-World sponsors many major industry events throughout theworld. Check our website, www.connect-world.com, for a list of theshows we will be at in the coming months. If you will be attending anyof these shows, send us a note. It would be a pleasure to meet you.Fredric J. Morris,Editor-in-Chief,Connect-WorldAll rights reserved. No part of this publication may be reproduced,stored in a retrieval system or transmitted in any form or by any meanselectronical, mechanical, photocopying, recording or otherwise, withoutprior permission from the publishers. The content of this publication isbased on best knowledge and information available at the time of publication.No responsibility for any injury, death, loss, damage or delay,however caused, resulting from the use of the material can be acceptedby the publishers or others associated with its preparation. The publishersneither accept responsibility for, nor necessarily agree with, theviews expressed by contributors.Editor-in-Chief:Fredric J. Morrisfredric.morris@connect-world.comPublisher:David Nunesdavid.nunes@connect-world.comManaging Director:Valetta Brownvaletta.brown@connect-world.comProof Reader:Diane CrossConnect-World is published under Licenceby WORLD INFOCOMMS LTDExecutive Office:• Global House, 12 Albert Road, London E16 2DW •United KingdomTel.: +44 20 7540 0876 • Fax: +44 20 7474 0090email: info@connect-world.com • URL: www.connect-world.comPrinters:AlfaprintISSN 1748-69982 Issue 2006

RegulationIP telephony, the telecom revolution,and regulatory challengeby Marc Furrer, President of the Swiss Federal Communications CommissionEach type of Internet voice telephony presents a different regulatory situation. PC-to-PC Internetcalls and Internet-based, corporate communications systems are not regulated. ʻPublicʼVoIP is regulated because users can be reached from an ordinary telephone. Given the technicallimitations, ʻpublicʼ VoIP service providers are not required to provide carrier pre-selection, orthe locations of emergency callers. On the other hand, users of ʻpublicʼ VoIP receive telephonenumbers that are portable and can be transferred throughout the public telephone system.Marc Furrer is the President of the Swiss Federal Communications Commission (ComCom), the regulatory authority for telecommunicationsin Switzerland. As Secretary of State, he was responsible for Switzerlandʼs preparations for the World Summit on the InformationSociety in Geneva (2003) and head of the Swiss delegation for the WSIS 2005 in Tunis. In 2003-2004, he presided over the European Conferenceof Postal and Tele-communications Administrations (CEPT) and in 1999 the Independent European Regulatory Group (IRG).He served previously as the Director General of the Swiss Federal Office of Communications (OFCOM) and as the personal politicalsecretary to Minister Adolf Ogi, Head of the Federal Department of Transport, Communications and Energy.Marc Furrer earned a Masterʼs Degree in Law from the University of Berne and graduated as an attorney and notary.Voice over Internet Protocol, VoIP, or IP telephony,will undoubtedly be part of our future.The general trend is clear - everything is becomingʻIPʼ - and this will profoundly changethe telecommunications market worldwide.IP technology is the main pillar of voice anddata network convergence. Versatile, digital, IPnetworks will replace conventional analoguetelephone networks in the medium term.VoIP, an important example of the first waveof new IP-based services, brings users a varietyof significant advantages. Consumers willbenefit from falling telephony costs as VoIPleads to greater competitive pressure in thefixed network and, as soon as mobile VoIP becomesavailable, in mobile telephony as well. Italso opens up completely new possibilities forthe integration of different services. However,VoIP also gives rise to new regulatory challenges.As an example of pragmatic regulatorysolutions, this article presents some decisionsof the Swiss authorities in this context.Two different VoIP application conceptsVoice over IP is not synonymous with ʻtelephoningover the Internetʼ. Today, there areessentially two different VoIP application concepts.IP telephony within an operatorʼs private fixednetwork : Unlike the Internet, the operator hasfull control over the network traffic and cantherefore guarantee the high grade of servicequality necessary for voice transmission. In thenext ten years, most of the incumbentʼs conventionaltelephone networks, public switchedtelephone network, PSTN, will presumablybecome IP-based data networks - Next GenerationNetworks, NGN. In that case, all phonecalls will be IP-based. It is still difficult, however,to estimate the time frame and extent ofthis migration. This change raises some importantregulatory questions about new interconnectionmodels and issues such as security,billing and quality of service.“From a regulatory standpoint,different versions ofVoice over Internet Protocolneed to be distinguished.”Economic necessity, as well as technologicaldevelopment, is pushing telephony in the directionof IP. A single platform that handles anumber of diverse services leads to lower infrastructurecosts and savings due to simplernetwork maintenance and implementationof services. On the other hand, today we arealready seeing the use of IP-based telephonyin the internal networks of large businesses(eg Novartis, Swatch, Nestlé), which are, ofcourse, connected to the public telephone network.There is a considerable potential for savingsin the business sector, in addition to the virtuallyno-cost internal calls. The convergenceof information and communications technologiesmeans only one infrastructure has to bemaintained for a wide variety of services. Thisoffers new opportunities in the developmentof applications (e.g. integration of telephony,mail, fax and images, video telephony, collaborationtools) and greater flexibility whenchanging business processes. In fact, ʻenterpriseVoIPʼ has a promising future and, sinceenterprise VoIP systems are not public, theyare outside of our regulatory concerns.Telephony over the Internet : From a regulatorystandpoint, different versions of Voice overInternet Protocol need to be distinguished.What they all have in common is that usersmust have broadband Internet access. Here aretwo typical examples: Pure Internet telephony PC-to-PC (with orwithout connected VoIP phone) - In general,free software from the VoIP provider enablesall users who are online with the same softwareto make free calls PC-to-PC (e.g. Skype,Issue 2006 5

RegulationVoIPBuster, Google Talk). In the same way,video telephony between computers couldalso become successful (e.g. Sony IVE). Inthese cases, the VoIP operator merely managesthe userʼs electronic addresses and generallyhas no influence upon the transport of thevoice data. The data packets are transportedby an Internet service provider, ISP, and overthe public Internet - the voice over Internetproviders are taking advantage of the existingcostly access infrastructure. The Swiss Lawon Telecommunications does not consider thisform of ʻInternet onlyʼ VoIP application, forexample, to be a public telephone service.VoIP telephony between a PC and an ordinaryfixed network telephone - In order for aVoIP customer to be able to call all fixed andmobile network numbers, the VoIP operatorestablishes a connection via a gateway betweenthe Internet and a traditional telephonenetwork (PSTN). If the VoIP customer can alsobe reached via a ʻnormalʼ telephone number,then this constitutes a public telephone serviceas defined in Swiss telecom law.VoIP market potential criteriaWith the rapid spread of broadband connections- an important prerequisite for VoIP -high-quality, very-low-cost Internet telephonyhas become a reality. As with broadband penetration,which differs from country to country,the market potential of VoIP for businessand residential customers also varies. In addition,other criteria for the potential of VoIPhave to be factored in, including pricing leveland competitiveness of the telephony market,market share of local loop unbundling, usageof fixed voice telephony, status of the CATV,cable TV, market, etc.In Switzerland, fixed-voice usage is still highand prices have not fallen as much as in othercountries, so Switzerland is a strong candidatefor a dynamic VoIP market.“In principle, VoIP providershave to comply with certainquality requirements if theywant acknowledgement aspublic telephone services.”National regulatory authorities as ʻVoIP enablersʼThe Federal Communications Commission(ComCom), as the Swiss regulatory authorityfor telecommunications, is committed tofacilitating the deployment of VoIP. This isalso consistent with the general intention ofthe European Regulatory Group, ERG. In2005, the ERG published a ʻCommon Statementfor VoIP regulatory approachesʼ. Today,VoIP continues to be an important issue on theERG/IRG work programme 2006.In the context of VoIP, the regulatory authoritiesmust meet several new regulatory challenges,including, for instance, the requirementof open, non-discriminatory access tobroadband Internet and issues related to securityand competition, such as carrier selection,numbering, emergency calls and lawful interception.Whilst enabling innovative services,the regulatory authority must also find a wayto guarantee a certain level of consumer protection.“In Switzerland, customersof VoIP providers offeringpublic telephone service,like fixed-network customers,receive a geographicaltelephone number fromtheir provider.”Pragmatic regulatory solutions for VoIP -the Swiss caseIn principle, VoIP providers have to complywith certain quality requirements if theywant acknowledgement as public telephoneservices. In order to guarantee a specific levelof service and sustainable competition in theinterests of consumers, Swiss telecom law prescribesa whole range of conditions for publictelephone services. The conditions include:providing the ability to route calls to all telephonenumbers (interoperability); real-timevoice transmission; identification of locationfor emergency calls; carrier selection; numberportability; access to subscriber directoriesand enabling the interception of telecommunicationstraffic.The Swiss authorities are trying to find pragmaticsolutions - although the focus must beon customer benefit. As far as most obligationsof the public telephone service are concerned,there is no need to make any adjustments forVoIP. In the case of carrier pre-selection, numbering,number portability and access to emergencyservices, it has been possible to find thefollowing pragmatic solutions: No carrier pre-selection obligation for VoIP- The goal of free carrier selection on the fixednetwork is to break the close link between thetelephone network and telephony services andthereby promote competition. With Internettelephony, the situation is completely different:customers are free to choose their Internetservice provider, ISP. As long as there isan Internet connection, the user can select avariety of VoIP operators. Implementation ofa technically complex pre-selection procedurewould be likely to affect adversely competition,which is contrary to the goals of theSwiss telecom law. Therefore, ComCom hasdecided not to impose carrier pre-selection inthe case of public telephone services providedvia VoIP. However, this decision assumes thataccess to the Internet is open and possiblewithout discrimination. Otherwise, ComCommight re-introduce the corresponding obligation.Carrier selection call-by-call, on the otherhand, is being retained. Telephone numbers - In Switzerland, customersof VoIP providers offering public telephoneservice, like fixed-network customers,receive a geographical telephone number fromtheir provider. Number portability possible - ComCom hasalso made some consumer-friendly changes tothe regulations regarding number portability.Customers can take their fixed network numberwith them to a VoIP provider, and viceversa. Therefore, it becomes easier to changeprovider. Difficult identification of location in thecase of emergency calls - One advantageof VoIP is that telephone calls can be madeworldwide from any broadband connection(nomadic use). In contrast with the fixed network,a VoIP telephone number is thereforenot associated with a specific location. Thiscan make it impossible to determine the locationof a customer in the case of an emergencycall. In this context, the Swiss Federal Governmentintroduced the following temporarysolution for VoIP operators on September 1,2005 - until a technical solution is found, locationidentification must be guaranteed onlyfor calls made from the principal location. TheVoIP operator has to inform its customers explicitlyabout this problem.Nevertheless a solution remains to be found,for instance, in the case of the complex task ofmonitoring of calls via VoIP (lawful interception),given the rising volume of data.The regulatory authorities will have to monitorconstantly further developments, not justin relation to VoIP but also with the impendingnew IP-based services in general, as theuncertain evolutionary path has only just begun.The main challenge for the regulators isto implement potential measures in sufficienttime in order to strengthen competition and tomaintain legal certainty. 6 Issue 2006

8 Issue 2006

Wireless VoIPVoIP over WiMAX and wireless broadbandby Tzvika Friedman, CEO, AlvarionToday, with the advent of Internet Protocol, IP, networks and Voice over IP, VoIP, competitivecarriers and service providers are looking to standards-based WiMAX networks to offer economicallyvoice and data in the same package. Operators in Europe have already started theseservices and those in the Middle East and Africa are just waiting for regulators to establish theguidelines and license the service. Operators, however, need to plan carefully their systems toensure the quality of service users demand.Tzvika Friedman is the CEO of Alvarion, a major provider of WiMAX and wireless broadband network equipment for carriers, ISPs andprivate network operators. Mr Friedman previously served as Alvarionʼs President and Chief Operating Officer. Prior to joining Alvarionhe held senior roles at ECI Telecom.Mr Friedman earned a Bachelorʼs and then a Master of Science degree in Electrical Engineering, Summa Cum Laude, from Tel AvivUniversity, and graduated with distinction with a Masterʼs in Science from the Sloan Program of Management, at the London BusinessSchool.Voice over Internet Protocol, VoIP, technologyenables packet-based IP networks to carry digitizedvoice. With VoIP, competitive carriersand service providers can offer telephony forvoice and fax services together with traditionaldata services over the same IP infrastructureand, by doing so, increase revenue and improvebusiness models.VoIP telephony is an excellent technologyfor operators who have already, or are planningto build, wireless access data (WiMAX)networks. Operators already providing thisservice include Irish Broadband in Ireland andIberbanda in Spain.Given the still large amounts of unsatisfieddemand for basic voice services in Africa andthe Middle East, VoIP over wireless is of greatinterest to both new and incumbent operators,who are looking into WiMAX as a way to acceleratebroadband penetration in an environmentwhere wireline technologies are limitedby poor infrastructure and distance.Thanks to WiMAX and VoIP, people and areaswith no existing telecom infrastructure will receiveboth voice and data services for the firsttime - and at the same time. No longer willoperators have to decide between providingvoice or data - both can be delivered over thesame wireless broadband network.According to Adlane Fellah, of Maravedis:“As the interest level in the Middle East andAfrica continues to grow for WiMAX-relatedproducts and services, regulators in Africa andthe Middle East are nearing the final phasesof what technical guidelines should be implementedin their countries, as well as whichoperators will be granted licences to deliverWiMAX products and services.”“Thanks to WiMAX and VoIP,people and areas with noexisting telecom infrastructurewill receive both voiceand data services for the firsttime - and at the same time.”Constructing a VoIP telephony service overa wireless IP network, however, requires anunderstanding of VoIP technology, and theunique characteristics of the wireless medium,to maximize call quality and capacity.Of course, the all but ubiquitous mobile cellularnetworks have transmitted voice over wirelessfor many years, but in the beginning, thesewere analogue voice transmissions and eventhe current digital networks do not make voiceconnections using IP.Wireless Local Loop, WLL, systems - sometimesalso called radio in the loop, RITL,or fixed-radio access, FRA, are examples ofwireless access networks commonly used forvoice. These fixed networks connect subscribersto the public switched telephone network,PSTN, using radio signals as a substitute forcopper for all, or part, of the connection be-Issue 2006 9

Wireless VoIP“Packet loss occurs whenpackets are not properlyreceived at their destinationand so are not available tothe receiver.”tween the subscriber and the switch. WLLnetworks have been an efficient way to deploybasic plain old telephone service, POTS, formillions of subscribers - without the expenseof burying, or stringing overhead, tons ofcopper wire over very long distances. WLLnetworks continue to be deployed and operatetoday in developing countries around theworld, however, many are now being replacedby proprietary wireless broadband or standardisedWiMAX networks.The reasons carriers give for building wirelessnetworks in preference towired infrastructure are numerousand have been prettyconsistent over the years: Low initial capital expendituresand very low networkoperating costs; Operating costs proportionalto customer base andassociated capacity needs; Ability to reach areas notserviced by existing infrastructure; Low costs and fast speedto connect new customers tothe network; and Ease to upgrade and expandthe network, includingthe ability to add networkcapacity through a simpleupgrade to the backhaul(transmission between remotefacilities to the centralnetwork) bandwidth.To this list, we can now add the ability to offerVoIP services for increased revenues as asimple increment to carriersʼ and wireless Internetservice providersʼ, WISPs, current wirelessdata networks, which are usually built forstandard Internet access applications.VoIP goes wirelessBecause of the unique physical and operatingcharacteristics of wireless networks, carrierswanting good-quality VoIP services over awireless network need to do proper planningand choose the right VoIP equipment.With their own advantages and limitations,some of which can affect VoIP service performance,wireless IP networks have unique phenomenathat may affect overall voice quality.To combat these issues, the choice of CODEC(which originally stood for ʻcoder decoderʼ butno one uses that term anymore), packet loss,latency, and jitter must all be examined closelyand considered when designing a wireless networkto handle VoIP traffic.“CODECs, or coder decoders, are the devicesnecessary at each end of the voice connection to‘code’ the caller’s voice into packets at the sendingend and to ‘decode’ the caller’s voice at thereceiving end.”CODECs, or coder decoders, are the devicesnecessary at each end of the voice connectionto ʻcodeʼ the callerʼs voice into packets at thesending end and to ʻdecodeʼ the callerʼs voiceat the receiving end. With the great advancesin CODEC technology over the past decade,high-quality CODECs contained on a singlechip are widely available and affordable. Theselection of a high-quality CODEC - especiallyone optimized for the high performancenecessary in wireless networks - is critical.High-quality audio CODECs are engineeredto overcome packet losses, and most CODECsperform one or more functions to make a packetloss unnoticeable to the user. For example,a CODEC may choose to substitute the packetlast received for the lost one or even performsophisticated interpolations of the entire packetstream to “guess” at the contents of the lostpacket in an attempt to eliminate interruptionsin the audio stream - which manifest themselvesas ʻclicksʼ during the userʼs call.Packet loss occurs when packets are not properlyreceived at their destination and so arenot available to the receiver. Packet loss canbe caused by many different factors, includingoverloaded links, excessive collisions duringtransmission, physical media errors due to interferenceor low link quality, and others. Substantialpacket loss degrades voice quality.Packet loss starts to be a real problem whenthe percentage of the lost packets exceeds acertain threshold, usually around five per centof the total packets when randomly distributed,or even less when packet losses are groupedtogether. In those situations, even the best CO-DECs are unable to hide the packet loss fromthe user resulting in degraded voice quality.With wireless networks transmitting in socalled ʻfree spaceʼ, interference and otherwireless phenomena cause lost packets to bemuch more common than in wireline networks.So, wireless networks extensivelyuse mechanismssuch as retransmissions orautomatic repeat-requestto minimize this phenomenon.However, this comesat the potential expense ofincreasing latency and jitterin the call.Jitter, historically a pejorativeterm for random delaysin voice transmission timeslotson a wireline network,can be used in a positiveway to increase VoIP performancein both wireline andwireless networks. In voicecommunications, voicepackets are generated at aconstant rate, so the voicedecompression algorithmat the receiving end expectsthem to arrive at a constantrate. Delays inflicted by thenetwork, however, may bedifferent for each packetand that is jitter.To restore the fixed spacing between the packets,the typical solution is to implement a jitterbuffer within the VoIP gateway to compensatefor any jitter, or random packet delays,which may occur as the packets traverse the“Latency is a term that refersto the time a packet takes tocross the network, from itsorigin to destination, includingtraversing the variousnetwork devices in betweensuch as gateways, switches,loop carrier systems, etc.”10 Issue 2006

National DevelopmentAlcatelAlcatel solutionsenable true fixed mobile convergenceby Carl Rijsbrack, Vice President, Marketing, Fixed Solutions Division, AlcatelAlcatel - Todayʼs end users seek a world of seamless services, devicesand applications that revolve around their requirements for completeconvenience and personalisation. To stay in the game, service providersmust rise to the challenge and deliver more services more efficiently.Alcatelʼs User-Centric Convergence solutions are designed to help serviceproviders with service creation(by driving and enablinginnovative services) and withservice control (by optimisinginvestment dollars and offeringflexible solutions that lock servicevalue in the network).Alcatelʼs hybrid phone solutiondelivers services across multiplenetworks (fixed or mobile) to asingle device. This Fixed MobileConvergence, FMC, functionalitywill make life easier for employees,beleaguered communicationsmanagers and all thosewho have to track and accountfor telephone usage and budgets.For employees, the result is that they no longer need to compromiseon affordability or feature availability when using their mobile phone.Alcatelʼs hybrid phone solution ensures that wherever a person may be- on the road, tele-working, near a WiFi hotspot or roaming on ʻcampusʼ- access to all of the features that are currently only available fromtheir office phones is ensured. With the hybrid phone, company-wideshort number dialling, one number speed dialling codes, multi-user audioconferencing, corporate address books and directories, and accessto attendant services are all available. Calls are seamlessly delivered- through either a GSM network or a Wireless LAN - using voice overIP, VoIP. Users are never cut off as they move around the campus or intobuildings since the system automatically switches between the fixed/wireless systems and in-building access points without compromisingvoice quality. Very cool.This strategy can be employed in response to disruptive VoIP servicesthat offer free worldwide calling. Alternatively, the corporate VPN servicecan be priced to compete with free offerings, using either call tariffplans or flat rate deals.These hybrid phone solutionshave already been launched in anumber of residential/consumermarkets, including the UnitedKingdom. To assure success,Alcatel provides a completesystems integration solution,including end-to-end integrationand validation of all components,from handsets to networkequipment, ensuring that the solutionintegrates seamlessly intothe service providerʼs customersites.Convenience, better access tofeature-rich corporate applicationson the move and from onlyone device make Alcatelʼs hybridphone solution a technology from which everyone gains. There isno excuse to be out of touch as taking the office with you is now thatmuch easier.For more information on Alcatelʼs User-Centric Convergence solutions,visit www.alcatel.com/convergence. For more information on AlcatelʼsManaged Communication Services solution, visit www.alcatel.com/mcs.This ʻseamless handoverʼ is not only cool, itʼs cost effective becausecalls are transmitted over the fixed network and only routed over themobile network when necessary. All national and international voiceand data connections between employees with access to the corporatevirtual private network, VPN, are included in a traffic bundle, whichcould be free if the service provider wishes, regardless of whether theyare made within offices or on the move.PROMOTIONAL FEATURE

Content Distribution NetworkIt’s not just TV, it’s my TVTMBased on a highly scalable architecture, fs|cdnenables the delivery of personalized IPTVservices with minimal up-front investmentoffering a future-proof application platform for novel,revenue-generating interactive services12 Issue 2006www.intracom-telecom.com/fs-cdn.html

Wireless VoIP“Choosing VoIP equipmentthat can support all the rightfunctionality can have acritical impact on the capacityand performance of thetelephony application overthe wireless network.”network. By deliberately delaying incomingpackets in order to present them to the decompressionalgorithm with a fixed spacing, thejitter buffer also provides the time to processand fix out-of-order errors by examining thesequence number in the Real Time Protocol,RTP, frames. This has the effect of smoothingthe packet flow and increasing the resiliencyof the CODEC to packet loss, delayedpackets, and other transmission effects. Thedownside of the jitter buffer, however, is thatit adds delay into the network, so it must bedesigned carefully. The key is to obtain thebenefits of the jitter buffer without introducingenough additional latency into the systemto disrupt calls.Latency is a term that refers to the time a packettakes to cross the network, from its originto destination including traversing the variousnetwork devices in between such as gateways,switches, loop carrier systems, etc. Being synchronousand real time, phone conversationsare quite sensitive to latency with most callersnoticing round-trip packet delays over 250 msin the form of clicks, pops, and dropped calls.Given the significantly lower design criteriafor one-way latency, the main sources of latencymust be understood and examined closely.Beside the size of the jitter buffer discussedabove, other network elements that introducethe most latency are: CODECs: the coding and decoding of everypacket, including compression, increaseslatency. For example, the G.723 protocol usedfor VoIP adds a fixed 30 ms delay. DifferentCODECs introduce different amounts of latencydepending on their quality; Network Latency: overall network latencycan be controlled somewhat through packetand link prioritization. For example, voicetraffic can get a higher priority through thenetwork to ensure minimum latency is introduced. Network Design: correctly configuringand building the wireless IP network, good telephonyquality can be achieved and overallvoice and data capacity can be increased.The WiMAX ForumThe WiMAX Forum has created service qualitytypes that are relatively similar to existingquality types for wireline packet service, qualitytypes such as best effort, available bit rate,variable bit rate and constant bit rate. Theyhave defined how much latency or jitter is acceptable.QoS was not part of the very firstwave of WiMAX forum certification testing,but a number of vendors have been adhering tothese quality expectations for a while.Choosing VoIP equipment that can supportall the right functionality can have a criticalimpact on the capacity and performanceof the telephony application over the wirelessnetwork. By optimizing both the VoIPequipment and the wireless infrastructure,voice capacity can be increased significantlyand make a difference that can absolutelyimprove the business model and turn theapplication into a very worthwhile revenuegenerator.Since WiMAX and other broadband wirelessnetworks will be built for multiple services,VoIP applications will be designed from thebeginning to make sure that they can coexistwith the much bigger bandwidth needed fordata and video services.Thanks to the evolution and development ofVoIP over WiMAX, people throughout Africaand the Middle East will soon begin toreceive voice and data services at the sametime - and for the first time. Connect-World iscelebrating its 10th yearanniversaryThrough the years, Connect-World’s authors told of the riseof mobile, of fibre, of wirelessand of broadband; they told ofthe dot.com meltdown, ofdigital inclusion and convergence,of standards and breakthroughs,the rise of IP andthe fall of switching and of theregulatory turnaround.In every issue of Connect-Worldheads of state, ministers andregulators, heads ofinternational institutions andleaders of industry speak ofwhat the ICT revolution, as ithappens, means to the peoplein their regions of the world.www.connect-world.comIssue 2006 13

Wireless VoIPVoIP, the WiMAX killer app?by Mike Pratt, President and CEO, Aperto NetworksWorldwide Interoperability for Microwave Access, WiMAX, is a new, heavy-duty, standardizedbroadband wireless technology that handles fixed and mobile voice and data. Unlike Wi-Fi, that typically can be used only for short distances, WiMAX is a long-range technology that,depending upon the terrain, might reach as far as 30 miles. This makes it ideal for wireless IPnetworks that handle both data and voice. Early data shows that voice - VoIP - might well bethe WiMAX ʻkiller applicationʼ in emerging markets.Mike Pratt is the President and CEO of Aperto Networks, a developer of advanced WiMAX base stations and subscriber units. Mr Pratt,a telecommunications executive with over 20 years of general management, engineering, marketing and manufacturing experience, wasuntil recently the President of ADCʼs Active Infrastructure business unit. Prior to this, he served as Executive Vice President, WorldwideAccess/Broadband Systems at Marconi, and has held executive and managerial positions at RELTEC, DSC and Bell Labs.Mr Pratt holds a Masterʼs of Engineering in Mechanical Engineering from Carnegie Mellon University, and a Bachelorʼs of Engineeringin Mechanical Engineering from the University of Nebraska.For every new technology, the question alwaysarises - what is the killer app for this technology?In other words, what application will beso highly sought after by the technologyʼs usersthat it will drive a healthy revenue streamfor the service provider and ensure the longtermsurvivability of the technology? Not surprisingly,this debate is now raging for WorldwideInteroperability for Microwave Access,WiMAX. Considering the growing popularityof Voice over IP, VoIP, in developed andemerging markets, many believe that voiceservices might well emerge as the ʻkiller appʼfor WiMAX. The early data would seem tosupport this theory.Voice is a dominant service being offered in theearly WiMAX deployments. In some areas, astaggering 70 per cent of WiMAX service providersare either offering voice services or usingtheir networks to carry voice services for apartner or affiliate. WiMAX is proving itself tobe an effective delivery system for voice services.Since WiMAX is an all IP-based technology,voice is translated into VoIP packetsbefore being transmitted over the network.Is it enough for WiMAX to be good at deliveringvoice? Will voice alone ensure its survivability?However important voice may be as arevenue machine for operators, WiMAX systemdesigners understand that voice is seldom,if ever, the only application on an IP network.If it were, then WiMAX would only need to bea wireless manifestation of the Public SwitchedTelephone Network, PSTN, delivering a constantstream of bits from one end-point to another.The PSTN was designed from its inceptionto carry voice, and only voice, and it stilldoes so today. However, unlike the PSTN, IPnetwork applications cover a wide range ofvoice, video, data and multi-media services,including: real-time voice calls; streaming audioand video; instant messaging; e-mail; filedownloading; Internet gaming and, of course,web browsing. On the IP network, all of thesetraffic types are considered as ʻdataʼ - carriedwithin the payload of the IP packet - but therequirements for dealing with each of them effectivelycan be quite different.“The WiMAX architects paidclose attention to theusage trends on other all-IPnetworks such as cable andDSL.”Voice services need low end-to-end latency(network transmission delay) and predictableperformance (low jitter) to give callersthe same real-time experience that they havecome to expect from the PSTN. Voice applicationstend to need little bandwidth and tolerateerrors on the link reasonably well sincethe human ear ʻfills in the gapsʼ based on thecontext of the discussion. Data applications,on the other hand, have significantly differentnetwork requirements than voice. Some dataapplications are quite tolerant of unpredictableperformance since the user may not beexpecting real-time delivery anyway; emailis a classic example. Other data and multimediaapplications, however, require predictably14 Issue 2006

National DevelopmentCBOSSPerfect solutionsevery timeCBOSS - With time, all successful telecom companies face the challengesassociated with upgrading and enhancing their IT infrastructure.An expanding customer base, the rapid development of telecom technologiesand the growing demand for new telecom services all obligecarriers to consider this issue seriously. Upgrading a telecom companyʼsIT system can be a major headache for all involved. This is especiallytrue if the carrierʼs IT infrastructure consists of hardware and softwaresolutions from a variety of vendors. Integration between the varioussoftware modules, their migration to new hardware, module updatingand testing - in addition to controlling the cost and time needed to executethe upgrade - are all important issues to deal with. The carrierʼs ITdepartment has to contend with both technical and organizational issueswhilst coordinating the activities of hardware vendors, software developersand integrators. As it all affects QoS, the upgrade process canaffect the carrierʼs financial performance and cause customer churn.CBOSS customises its software products to meet the customerʼs localrequirements - the interface is translated into Arabic for Arabic partners.The company strives to be closer to its partners in the Middle East,which is why CBOSS has a subsidiary in Dubai - the first among its representativeoffices abroad. Moreover, the company also performs sometransactions through Arabic banks. CBOSS offers its Arabic customersa flexible pricing policy to foster long-term and mutually beneficialpartnerships.A. Morozov, CBOSSʼs CEO and President, personally supervises theprojects for Arabic customers. Among CBOSS regional customers aresuch companies as XPress Telecommunication (Jordan), Public TelecommunicationsCompany (Saudi Arabia), Beshara Group (Kuwait),and others. All the contracts have been fulfilled, delivering high-qualitysolutions on time.Everything can be different, however, when a telecom company choosesCBOSS, a trans-national corporation, to provide its IT solutions. AtCBOSS, the basic principle is to provide integrated turn-key software/hardware IT solutions that streamline a telecom companyʼs operationsfor any network, mobile or fixed-line, or standard (GSM, CDMA, iDEN,PSTN, 3G or NGN). The operator gets a ready-to-use IT infrastructure- a safe investment that reduces costs and risks. CBOSSʼ comprehensiveintegrated hardware/software solution is a truly powerful tool that helpstelecom carriers improve their competitive edge.The concept of convergence - the basis for all CBOSS solutions - enablesinvariant analysis of diverse information for voice, text or data,pre- and post-paid tariffs, hybrid accounts, and the like. The uniquemulti-functionality, unlimited scalability and high reliability of CBOSSsolutions make them a perfect platform for creating an integrated ITinfrastructure in the heterogeneous telecom environment. The modularstructure of integrated CBOSS solutions provides vast capacity forexpansion and upgrades. With its own billing development, trainingand testing centres, CBOSS Corporation takes an industrial approachto development, testing, implementation and technical support of thesolutions it provides.PROMOTIONAL FEATURE

MAKE THE RIGHT CONNECTIONSRegister todaywww.itu.int/world2006/registrationI T U T E L E C O M W O R L D 2 0 0 6 p r o v i d e s a u n i q u e g l o b a l I C T n e t w o r k i n g p l a t f o r mw h e r e g r e a t m i n d s , c o m p a n i e s a n d n e w t e c h n o l o g i e s c o n n e c t . J o i n t h el e a d e r s o f b u s i n e s s , g o v e r n m e n t , r e g u l a t o r s , i n n o v a t o r s a n d v i s i o n a r i e s t oexplore, negotiate and decide the future of the ICT industry. Organized by theI n t e r n a t i o n a l Te l e c o m m u n i c a t i o n U n i o n ( I T U ) . V i s i t w w w. i t u . i n t / w o r l d 2 0 0 616 Issue 2006

Wireless VoIPhigh performance, but may tolerate fairly highlatency conditions. Downloading multimediafiles and streaming audio and video fall intothese two categories. Most data tends to befairly intolerant of link errors and can be quitebandwidth intensive.“WiMAX can be deployedto serve virtually every usersegment over wide economicand geographic spectrums.”Therefore, since voice is typically not the onlyapplication on an IP network, the networkneeds to be smart enough to adapt to the individualrequirements of each application. Evenmore daunting, the network needs to handlethese applications simultaneously; while treatingeach one individually - even on the samewireless channel.The WiMAX architectspaid closeattention to the usagetrends on otherall-IP networks suchas cable and DSL.Voice continues tobe a growing anddominant application.Worldwide, VoIP usershave grown atthe staggering rate ofmore than one millionnew users eachquarter since the middleof 2004. Duringthe same time period,North America hasseen a doubling of thenumber of VoIP userseach quarter. With theproliferation of Skype, Vonage and other lowcost, highly featured Internet-based callingservices, these trends are likely to continue, ifnot increase.VoIP usage is moving to Wi-Fi in the form ofWi-Fi phones and access points with integratedVoIP SIP, Session Initiation Protocol, useragents. However, DSL, cable and Wi-Fi werenot designed from the ground up to deal withthe explosion in multi-services. Wireless engineerslearned a lesson - Design the IP networkfrom the start to handle multiple services,including voice, as a key revenue generatingapplication. WiMAX addresses this challenge.To handle voice as a key application in a multiserviceenvironment, IP networks requireboth technical and non-technical attributesnot found in most other access networks. Theearly designers of WiMAX specifically builtattributes into WiMAX so it could operate efficientlyand effectively in this environment.These built-in attributes include an effectiveand flexible quality of service, QoS, regime,the ability to roll-out economically a networkover a wide area, and a range of bandwidthmanagement schemes to deliver differentiatedtraffic to consumers, small business and enterprisesover a common platform.WiMAX for urban, rural, enterprise, SMBand residential?WiMAX can be deployed to serve virtuallyevery user segment over wide economic andgeographic spectrums. In Europe, Iberbandadeployed a 3.5 GHz WiMAX system to providebroadband access for municipalities,businesses, government offices and residentialcustomers throughout Spain. In addition to offeringnetwork access to businesses throughoutthe heavily populated coastal territory of Spainand the Pyrenees, Iberbanda employs WiMAXequipment to cover Seville and other provincesin Andalusia, including Almeria and Cordoba,in the south of Spain. Iberbanda has deployedsimilar networks in densely populated areaslike Madrid, in business and industrial areaslike Guadalajara, and in the regions of the rapidlygrowing Mediterranean sector, includingLerida and Murcia. In the Pyrenees, Iberbandahas deployed these solutions to provide connectivityand broadband services to isolated“For many small and largeoperators, radio spectrum isa precious and scarceresource.”valleys and sophisticated ski resorts alike. Urban,rural and suburban networks are all basedon the same WiMAX platform, which is alsoused for projects with Andalusian and localand regional Mediterranean communities.“Voice and multi-servicesare predominantly providedtoday through a discreteWiMAX CPE...”Indeed, we see WiMAX operators addressingthe needs of corporate users in New York City,as well residential users in the emerging economiesof the Middle East and Africa. It is servingusers in the open stretches of rural Montana,as well as the discrete islands of Indonesia. Ineach of these cases, the typical services includevoice as an important application, in additionto various forms of data. WiMAX network operatorsare reaping the benefits of a technologythat is wireless - it does not require building awired infrastructure which often does not existin developing or rural areas. It enables a fasterand cheaper service deployment by the operator,and a more flexible management system- which translates into more affordable servicecosts for subscribers.Moreover, the timefor deploying the serviceis substantiallyreduced. OutdoorWiMAX systemscan be deployed inminutes versus thedays or weeks oftenrequired to properlyqualify and provisiona DSL or cable line.Traditional wire lineoperators can offerWiMAX as a ʻfill inʼservice for customersoutside the centraloffice range of DSL.The end result, ruralvillages that previouslyhad no phoneservice - or whoshared a single phonebecause there was no wired infrastructure, andit was too costly to build one - will have accessto an affordable service connecting them viavoice and data to the world. Small and mediumbusinesses will have affordable broadbandaccess for voice and data, making them morecompetitive.Voice and multi-services are predominantlyprovided today through a discrete WiMAXCPE, customer premises equipment, interconnectedwith a voice telephone adapter or IntegratedAccess Device, IAD, hosting plain oldtelephony, POTS, phones and PCs. In the nearfuture, WiMAX CPE will be widely availablewith integrated POTS lines, SIP capabilitiesand router functions. Other advanced optionswill include dual mode Wi-Fi/WiMAX CPEallowing extended wireless access to Wi-Ficlients. WiMAX infrastructure is integratinginto the IP Multimedia Subsystem, IMS, infrastructureto hasten the vision of seamless ac-Issue 2006 17

Wireless VoIPcess to multimedia services from any accessmedia.Secret sauce: robust QoS and intelligent“Many believe that voicecould be the killer app forWiMAX and there isincreasing data to supportthis theory.”bandwidth managementWiMAX designers have built in two key featuresenabling superior voice and multi-servicedelivery over the IP network. They arerobust quality of service, QoS, and intelligentbandwidth management.WIMAX systems vendors are implementingalgorithms to very discreetly classify and prioritizetraffic delivered to and from the subscriber.Advanced WiMAX systems will allowoperators to tune the system for the uniquecharacteristics of voice (low latency and jitter)- and therefore deliver toll quality and simultaneouslysatisfy bandwidth hungry data andstreaming media applications. After the data isclassified, WiMAX systems assign a deliverypriority based on the classification result. Specificpriorities can be set for real-time services,like voice, that requires a guaranteed data rateof near real-time access to the channel versusnon real-time services like email, which requiresonly best effort service delivery. Prioritiesare provisioned and observed at bothends of the WiMAX link. WiMAX systemsimplemented with leading-edge QoS featureswill offer a distinctive advantage to operatorsintending to offer voice, data and multi-mediaservices.For many small and large operators, radiospectrum is a precious and scarce resource.Therefore is it critical that spectrum is utilizedeconomically by carrying the maximum payloadboth upstream - from the subscriber, anddownstream - to the subscriber. Voice trafficis typically symmetric with both callers havingan equal opportunity to talk. Conversely,file downloading and streaming multimediarequire more bandwidth in the downstream directionallowing the subscriber to receive thedata as quickly as possible. Therefore, flexiblebandwidth management schemes for dealingwith bursty, asymmetric, data traffic simultaneouslywith voice, is another key technologydriving WiMAX success. WiMAX employsa Time Domain Duplexed, TDD, schedulingscheme that allows the link to be specificallytuned for the application in use. So, if a userʼsprimary requirement is for asymmetrical datatraffic - in which the aggregate downlink trafficis exceeding the aggregate upstream traffic- TDD systems can assign more bandwidthin the downlink direction. Advanced TDDsystems will dynamically adjust and synchronizethe bandwidth allocation for hundreds ofsubscribers according to application traffic requirements.WiMAX in the morning, WiMAX in theevening, and WiMAX in the summer timeMany believe that voice could be the killerapp for WiMAX and there is increasing datato support this theory. However, a systemthat is good at carrying voice must also begood at carrying the same services deliveredon todayʼs wired networks - voice, data andmultimedia. WiMAX has been designed fromthe ground up for multi-service delivery withkey technologies baked in. Combined withthe inherent properties of a wireless system ofrapid, flexible and low-cost provisioning andmanagement, WiMAX has an opportunity toincrease dramatically the availability of lowcost,high-quality voice, data and multimediaservices. 18 Issue 2006

Issue 2006 19

VoIPThe growing rush to VoIPby Rupert Galliers-Pratt, Founder and Executive Chairman,Vistula CommunicationsVoice over IP, VoIP, is transforming voice communications and the telecommunications industryitself. The flexibility, functionality and lower cost of VoIP communications have redefinedwhat users, especially businesses, expect from telephony and started an industry-wide, worldwide,migration to VoIP telephony. Competition is forcing partnerships and mergers amongthe players and many, unable to compete, will be squeezed from the market. Market growthdepends upon broadband access and the widespread availability of wireless broadband willrevolutionise and re-structure the mobile industry.Rupert Galliers-Pratt is the Founder and Executive Chairman of Vistula Communications. Rupert Galliers-Pratt has served on the boardof several publicly traded companies in the UK and the US. He currently serves as Chairman of both Cardlink Holdings Limited andVistula Limited. He also served as Chairman and Chief Executive Officer of Petersburg Long Distance Inc. (NASDAQ). During that time,he was responsible for establishing ZAO PeterStar, the dominant Competitive Local Exchange Carrier (CLEC) in St Petersburg, andAltel, which was the first cellular operator in Kazakhstan.He received his degree (general disciplines) from Eton College, Berkshire, UK.The economic and social value of Informationand Communications Technology, ICT, investmentand infrastructure is well understoodand documented. Voice over Internet Protocol,VoIP, is the next phase in the development ofICT, with the bringing together, or convergence,of both voice and data communicationsonto a single infrastructure.The key benefits that derive from VoIP are:1. The use of defined ʻopen sourceʼ protocolsopens the previously closed world of voicetelecommunications services to a veritablearmy of entrepreneurial individuals and businesses;2. The increased levels of competitive servicecreation deliver low cost services to themarket, whilst optimising the use of capitalresources across the economy;3. Increased value from the data infrastructureinvestment, both wireline and wireless, redefiningthe business model for the deploymentof infrastructure into formerly uneconomicmarkets;4. High levels of service innovation that increasesthe flexibility and functionality ofcommunications, allowing the integration ofthe previously discrete data and voice domainsinto new and value-creating services;5. The ʻglobalisation of placeʼ facilitates theallocation of work based on economic principles,bringing work to new communities,improving their economic activity and growth,and raising millions out of poverty; and6. The redefining of traditional industries andeconomies.20 Issue 2006Market evolutionVoIP has been implemented in closed corporatesettings for some considerable time, thecore benefits of which have been: A 45 per cent reduction in operating costsderived from running voice and data on a convergedplatform, with user managed moves,adds and changes, MACs; A 20 per cent reduction in network costsobtained by operating a single data infrastructure;and A five per cent productivity improvementacross the workforce due to communicationsthat can meet the needs of the modern workplace.This migration is evidenced by the growth ofIP PBX, private branch exchange - a privateinternal telephone network - sales and is illustratedin Figure 1.The evolution of VoIP in the public marketis illustrated in Figure 2. Different marketswithin EMEA are at different evolutionarypoints upon the path, with the key driver beingthe availability of broadband, wireline orwireless.The evolution begins in the public marketswith the arbitrage of telco pricing. This rapidlyextends into a broader ʻhostedʼ, or Centrexproduct portfolio, that is offered to the marketthat enables users of the public infrastructureto access the benefits of VoIP previously onlyavailable to the corporate market.Subsequent development will focus upon deliveringend-user interfaces to applications thatsimplify the management of communicationsand enhance the functionality to support thechanges in working practices that are becomingapparent with the growth of the servicessector in all economies.Figure 1 - Sales of IP PBXsUnique value of VoIP and the changingmarket dynamicsVoIP delivers considerable value to both usersand service providers. For users, it offersa lower total cost of ownership, TCO, whilstincreasing business flexibility, both in functionalityand scalability.For service providers it offers a new marketopportunity to provide added value applications,such as hosted VoIP PBX services, thathave the potential to re-engineer radically the

Digital DivideFigure 2 - Evolution of VoIPFigure 3 - Unique Value of VoIPservice provider business model and reducecustomer churn, as the core broadband productsbecome commodities. This is illustratedin Figure 3.Coupled to the typical user benefits of lowercost and greater flexibility and functionality,there are a number of trends in the market thatwill drive further radical change to the currentbusiness models for providing business telephonyand VoIP services. These are:1. The creation of VoIP ʻwalled gardensʼ by theInternet access providers in an attempt to regainrevenues from voice services by blockingaccess to Internet applications providers;2. Major Internet access providers, such asYahoo! and Google, will develop partnerships/mergers with other Internet access providersto secure access and enhance services withVoIP;3. ʻPure playʼ VoIP Internet applications providerswill be squeezed from the market oracquired;4. Wireless will continue to grow and 3G,WiFi and UMA, Unlicensed Mobile Accesstechnology, rollout will be the catalyst for mobileoperators to embrace VoIP services, as thetechnology to bring mobility to the businessworkplace; and5. SIP will become the standard for VoIP,threatening the position of traditional PBXmanufacturers, as this provides Internet accessproviders a standard upon which to offer costeffective, highly featured services.Hosted VoIP solutionsThe hosted VoIP market broadly divides betweensolutions that arbitrage fixed line callcharges and solutions that add value to thebroadband proposition with a hosted VoIPPBX solution.With an environment that offers an Internetservice provider, ISP, or application serviceprovider, ASP, the opportunity to offer low costcalling, relative to the telco rates for fixed linecalling, the market is dominated by consumerVoIP solutions, with ʻno touchʼ (automatedapplications downloads) order and customerservice portals.The creation and deployment of consumerbased VoIP services is not complex or expensiveand requires little or no integration withcurrent systems or processes.The business model that supports the creationof these services is the voice minute arbitrage(the trading in minutes of voice transmissionon electronic exchanges) capacity, which is,ultimately, not sustainable. As such, the ASPneeds to migrate to being a provider of servicesto the ISP, who ʻownsʼ the customer.Solutions for the business market require thedevelopment of complex OSS, operationalsupport system, and BSS, business supportsystem, capabilities and are more in evidencein markets that have been liberalised, andwhere the focus is no longerupon arbitrage but uponsolutions that add value tothe commodity broadbandinfrastructure.An overview of complexityinvolved in deploying servicefor the business marketis illustrated in Figure 4Within the EMEA region,one encounters a completearray of regulatory environmentsfrom monopoly anduncompetitive to highlycompetitive, liberalisedmarkets. As such, in somegeographies VoIP does not exist, is suppressedand illegal, in others it is a regulatory ʻgreyareaʼ and in some a competitive ʻfree for allʼ.What is clear across EMEA is that liberalisationwill continue and the introduction of consumerVoIP services will go ʻhand in gloveʼwith that liberalisation.However, the lesson from regions with a historyof liberalisation is not ineffectiveness ofdefensive strategies in the battle between thePSTN and IP, that battle is already lost. Thelesson is to embrace aggressively strategiesthat enhance the value of the IP infrastructure,especially the hosted VoIP PBX and the evolutionof the current OSS and BSS infrastructures.A new global industrial revolutionVoIP is forcing the pace of globalisation,bringing people, communities and economicactivity into a single global market place, inwhich all can compete and benefit. It is a vitalingredient of the new global economic revolution.The advent of hosted VoIP applications letsservices offered in India and hosted in the UK- for example - create global communities forthe family and business.As with all revolutions, there will be winnersand losers. The losers will be the entrenchedgroups using legacy technologies that havetraditionally derived their value from closedproprietary applications and monopoly accessto communications.The winners will be innovators who can givecustomers what they want when they want it,facilitating new business opportunities andcreating wealth across the economy, enablinggovernments to invest in the education andhealth of their people as never before.VoIP is a key component of the ICT revolutionand a force that is creating new business modelsfor both vendors and users. Figure 4 - Order/Provider/Service/Bill – OSS andBSS integration across service provider ʻsilosʼIssue 2006 21

HP Communications World 2006Where the Communication,Media and Entertainment industry meets• We• You• Our partnersCome and discover the solutions you need to develop content-richservices that fuel customer loyalty, deploy those services rapidly,control your operating costs, and shorten your time to revenue!HP Communications World will provide more than 60 sessions anda dynamic exhibition featuring dozens of HP Partners andHP solution demonstrations.More detailed information at:www.hp.com/eur/CommunicationsWorldJoin uson Dec 12th -14thin Vienna, Austria

VoIPQuality calling - VoIP comes of ageby Gad Tobaly, CEO andMember of the Board of Directors of InfoVista.The growing use of VoIP - a voice technology that seems destined, one day, to replace traditionalcircuit-switched telephony - makes the reliability, performance and quality of service,QoS, of increasing concern to users and service providers alike. Widespread adoption of VoIPwill depend upon overcoming performance and security issues, including access to emergency(911) services, deterring security threats and hackers, ensuring QoS and providing the sort ofservices with VoIP that phone users have come to expect.Gad Tobaly is the Chief Executive Officer and a Member of the Board of Directors of InfoVista. Previously, Mr Tobaly spent four years atComputer Associates (CA) in the United States as Senior Vice President and General Manager, holding regional and global managementpositions within Field Operations. Before joining CA, Mr Tobaly was Managing Director with Platinum Technology in Europe and wasresponsible for the companyʼs operations in France and Africa.Mr Tobaly, who is fluent in four languages, earned mathematics and physics degrees from the Paris Jussieu University and has a Mastersin Management Information Systems from Paris-Dauphine University.Voice over Internet Protocol, VoIP, hasemerged as an increasingly popular alternativeto traditional phone connections because of itsability to transport voice communications overdata networks such as the Internet. Enterpriseand residential users are adopting VoIP servicesin record numbers, attracted to the savingsprovided by the low cost of VoIP calling.According to a new report by Juniper Research,the market for VoIP business servicesis set to reach US$18 billion by 2010. In a separatereport by Integrated Research, based on asurvey of 1,232 executives worldwide, 78 percent of large companies say they are deployingIP telephony, largely to enhance communicationswith IP applications and services such asvideo conferencing.“VoIP has already transformedthe communicationslandscape, and many industrywatchers believe that VoIPis likely to replace completelytelephone services as weknow them.”As telecommunications and cable service providerscontinue to launch an increasing arrayof VoIP offerings to enterprise and residentialmarkets, and with business critical applicationslike voice and video now running on IPnetworks, guaranteeing uptime, performanceand service levels is vital. Potential VoIP usersneed to educate themselves on the technology,its benefits and current limitations.In a traditional public switched telephone network,PSTN, a telephone number enables acircuit-switched networkʼs routing computersto establish a direct link between callers viawires. In contrast, with VoIP, a callerʼs telephonenumber is linked to an IP address. VoIPservices work by transformingvoice signals intodata packets that are ableto travel over IP-basednetworks before they areconverted back to voicesignals when they reachtheir recipient. Voice signalsare broken up intodata packets and travelfrom one computer toanother, across the Internet,until they reach theintended recipientʼs IP address.At this point, voicepackets are reassembledinto a complete signal,enabling users to hear andspeak to each other exactly as they would ifthey were using a traditional telephony service- at least, that is the goal.VoIP has already transformed the communicationslandscape, and many industry watchersbelieve that VoIP is likely to replace completelytelephone services as we know them.However, while the excitement and promise ofVoIP is real, the lack of end-to-end visibilityinto network performance, and the inability tomanage the call quality and reliability that usershave come to expect from traditional PSTN,have been a cause for concern. Mainstream,Issue 2006 23

VoIP“One of the currentchallenges associated withVoIP is both a physicaland information technology(IT) security issue.”widespread, adoption will depend on how wellthe industry addresses performance and securityissues, including enabling reliable connectionsto emergency services, deterring Internethackers and ensuring quality of service, QoS.Significant strides have been made, but thereis more work to be done. Robust performancemanagement tools need to be deployed to allowenterprises and service providers to aggregatedata and use it for base-lining, trending,capacity planning and QoS monitoring and, aswell, enable reports which can correlate businessmetrics to IT performance; and providefaster problem resolution.Improving emergency responseOne of the current challenges associated withVoIP is both a physical and information technology(IT) security issue. During crisis situations,connecting to ʻ911ʼ emergency servicesin a timely manner can be the difference betweenlife and death. Imagine the impact afailed 911 connection could have for enterprisesin terms of both employee safety andcorporate liability.In the US, in an effort to improve the effectivenessand reliability of 911 emergency services,the Federal Communications Commissionruled in May 2005 that certain VoIP providersmust supply 911 emergency services callingcapabilities to their customers as a mandatoryfeature of the service they offer. Whether ornot governments across Europe will followsuit is still yet to be seen but a number ofleading service providers have already introduced999 calling capabilities. It now seemsassured that users will soon experience thesame dependability from Internet-based voicecommunication that they have come to expectfrom conventional phone services.Securing the networkInformation security concerns have touched allareas of IT recently, and VoIP is no exception.The nature of VoIP, ruled as it is by the laws ofdata communications, opens the potential forsecurity breaches on par with those that impactany IP-based service. In order to address effectivelythe need for secure, predictable andefficient VoIP services, security must be pervasiveand proactively built into the network,not just an afterthought hastily developed inresponse to a security breach.Unless these measures are taken, there is thepotential for hackers to break into VoIP servers,compromising data. In VoIP, server-basedIP PBXs replace private branch exchanges,PBXs. These call-management boxes, whichare used for both serving VoIP services andfor logging call information, are susceptibleto virus attacks and hackers. Server break-inscould result in the loss of sensitive data andhave significant ramifications for users.Another example of a VoIP security threatis the question known as spam over InternetTelephony, SPIT. Much in the same way thatSPAM afflicts email in-boxes, a VoIP spammeror ʻspitterʼ can copy one phone call and send itto many other users, mirroring the process ofcopying an email to create spam. In this way,the potential exists for an individual to makeunwanted calls to hundreds or thousands of userssimultaneously and anonymously.“VoIP has acceleratedcompetition among serviceproviders looking to increasetime-to-market for newservices and ultimatelyboost revenue.”Ensuring call qualityPerhaps the most basic challenge that VoIPmust overcome is also the most complicated.The data networks over which VoIP servicesmust traverse were never designed to carryvoice. The migration from circuit-switchednetworks to VoIP brings a new set of challengesthat can ultimately result in poor call quality.Measurement and monitoring of performanceand QoS parameters have assumed critical importance.Service providers must committo delivering toll-call quality without affectingother critical data applications, andprovide a highly reliable infrastructure thatcan survive partial outages.The correct tools to manage the performanceof IP networks are required in orderto undertake enterprise-wide VoIP deploymentswith confidence. The next generationof performance management solutionswill measure operational benefits from thecustomerʼs point of view, using such metricsas uptime increase, cost savings andtime-to-value.A service-centric performance managementstrategyDue to its cross-silo nature and the fact thatdata and voice are converging onto onenetwork, VoIP is complex to deploy. Oftenthese factors work against an organisationʼsability to deliver high-quality VoIP servicesand a superior user experience. Call qualitymeasurements, such as the ability to trackdelays, clarity and dropped calls are criticalfor measuring the actual end-user experience.Most performance hiccups happen intermittentlyand the challenge for IT is to spot thoseinstances, obtain a clear quality assessmentof the user experience, and address degradationsbefore end-users feel the impact. Byestablishing a committed QoS strategy, IT organisationscan differentiate between types oftraffic, prioritise the traffic based on businessgoals and service level requirements and minimisecongestion. This uses the quality of theend-user experience as the objective measurementof service quality, enabling IT managersto meet increasingly stringent service levelagreements, SLAs, and deliver differentiatedservice offerings.VoIP has accelerated competition among serviceproviders looking to increase time-tomarketfor new services and ultimately boostrevenue. For residential and enterprise usersalike, service reliability will have a dramaticimpact on the adoption rates and service providersʼultimate success. Enterprises in particularare demanding enhanced managementof QoS levels and new ways they can measure,understand and negotiate service levels withtheir providers.VoIP is gaining a great deal of momentum, butservice providers must meet the high standardsboth residential and enterprise customers havecome to expect from traditional telephoneservices. Providing customers with tangibleevidence of the health and performance of ITservices will be the key to winning their confidenceand loyalty. In the end, the goal is clear,consistent, good-quality conversation. 24 Issue 2006

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VoIPSeamless communicationsby Peter Newcombe, President, Carrier Packet Networks, Nortel,Europe, the Middle East and Africa (EMEA)With VoIP, voice and advanced features - call diversion, caller display, unified messaging,multimedia, video, presence and messaging - can be economically delivered via broadband toworkers in large and small businesses whatever their location. Service providers can now supplythese services with business-grade security and carrier-grade reliability. At home, serviceproviders bundle VoIP with Internet, IPTV and even mobile calling. Dual-mode handsets enablelow-cost VoIP calling using WiFi at home, in offices and public hotspots, whilst switchingto cell networks elsewhere.Peter Newcombe is the President of Carrier Packet Networks for Nortel in Europe, the Middle East and Africa (EMEA) responsible forNortelʼs communications solutions for carriers, including broadband fixed access, voice over IP, triple-play solutions, carrier Ethernetand optical networks. Mr Newcombe began his career at STC Telecommunications, later acquired by Nortel, as a hardware engineer,working on Public Switching products. Over the years, he moved up to his current role through a series of increasingly responsible technical,product marketing and business development positions in Europe, Asia and Latin America and the United States.Peter Newcombe graduated from UMIST University, Manchester with a Bachelor of Science degree in Electronics.It is incredible to look back and think that onlya few years ago the idea of carrying Voice overIP, VoIP, was limited to experimental networksand to enthusiastic hobbyists, trying to use theInternet for free long-distance phone calls.Fast forward to 2006 and VoIP is no longercoming soon, it has arrived. In a quiet revolution,VoIP technology has penetrated everypart of our telecommunications networks, notonly in the heart of the network but also in theway that services are delivered to the end-users.In the early stages, most attention was focusedon the core of the network. Service providerswere attracted to the idea of being able toreplace multiple layers of voice and data networkswith a single IP-based infrastructure capableof carrying any and every service. Largeenterprises were equally keen on using theirinter-site data networks to carry voice trafficbetween PABXs, private automatic branch exchanges,ʻfor freeʼ.“VoIP changed all that by enablingnot just the voice itselfbut all of the features such ascall diversion, caller displayand unified messaging to betransparently carried over abroadband network.”Over the past five years, however, a massiverollout of broadband access to residentialcustomers, to Small and Medium Businesses,SMB, and to the branch offices of larger enterprisesand government organizations, hasopened up the possibility of extending VoIP allthe way to the edge of the network. Suddenly,there was an opportunity to change completelythe way people thought about telephony services.The capability of the modern PABX has meantthat large organizations have traditionally hadeasy access to sophisticated telephony services.The features may not always have beeneasy to access or use, but at least they werethere. Away from large sites, however, thepicture was less rosy. Smaller PABXs and keysystems tended to be less sophisticated, leavingstaff struggling to fit their work around thecapabilities of the telephone system insteadof the telephone system adapting to serve thebusiness.VoIP changed all that by enabling not just thevoice itself but all of the features - such as calldiversion, caller display and unified messaging- to be transparently carried over a broadbandnetwork. Small sites, branch offices, homeworkers, those working from customer locationsand travelling workers could all get accessto the same suite of capabilities as employeesat the larger sites. Users had a choice of sophisticatedVoIP feature phones or soft-phoneclients running on their PCs, enabling them tomake and receive calls using their office phonenumber from anywhere in the world, providingthey have access to a reasonable broadbandconnection. Virtual contact centres couldbe set-up quickly, with agents working frommultiple sites or even from home. Productivityimproved, network and call costs went down.Today, a great percentage, in some cases all, ofthe PABX equipment sold by major suppliersis VoIP enabled.Meanwhile, at home, teenagers found thattheir instant messaging services from Yahoo,MSN and AOL were enhanced with the abilityto talk to their friends using a cheap headsetplugged into the PC. As soon as your friendappeared on your ʻbuddy listʼ, you could talkall night for free. In most cases, the users neitherknew nor cared that this was another exampleof VoIP. Soon, video was added to voicecalling, then the ability to make outgoing callsto traditional telephone networks.Not surprisingly, these services started to findtheir way into business environments, usuallythrough the back door. By the time many ISdepartments realised what was going on, thecombination of presence indication, instantmessaging and ʻclick-to-callʼ voice communicationhad become part of many peopleʼseveryday work patterns. This has left manyorganizations with a difficult decision. Should26 Issue 2006

VoIP“In the residential market,service providers are lookingto bundle VoIP, Internet andIPTV services as a way ofbecoming a more permanentfixture in the household.”they let workers pass confidential businessinformation over public networks that cannotguarantee the security, quality or reliability ofthe network? Can they overlook the time thatemployees might waste chatting, in this manner,with friends during worktime? Or should they close offaccess to the services and runthe risk of alienating staff whohave come to rely on an innovativeway of doing business?Fortunately, some service providershave begun to offer business-grademultimedia services,which bring all the features ofthe free web-based services,but with the added benefits ofsecurity and carrier-grade reliability.These new carrier-hostedservices, based on the openSIP standard, can be tightly integratedwith VoIP systems ortraditional telephony systems,to provide a seamless serviceas users move between the traditionaltelephone network andthe VoIP and multimedia world.With VoIP maturing and becominga ʻbusiness-as-usualtechnologyʼ for both residentialand business users, the focusis shifting to how VoIP can becombined with other technologiesto create compelling convergedservice bundles, whichwill help to slow the tendencyof customers to hop from oneservice provider to another insearch of the lowest price.In the residential market, serviceproviders are looking tobundle VoIP, Internet and IPTVservices as a way of becoming a more permanentfixture in the household. Triple-playservices - or quad-play with mobile added tothe equation - offer the tantalizing possibilityof ensuring that a significant part of a householdʼstelecoms and entertainment spendinggoes to a single provider. Linking the communicationsnetwork to the TV set brings someexciting new functions, such as on-screendisplay of incoming caller identity and beingable to see the caller if they are using a cameraphone. The remote control can be used to sendinstant messages, to choose whether to acceptan incoming call or to send it to voice mail. Ifyou decide to take a call, the system will automaticallypause your TV programme until youhave finished the call.Cable MSOs, multiple system operators, havebeen delivering triple-play bundles for sometime now and arguably have some advantagein understanding what the market wants, howto package content, how to price the servicebundles and how to create a robust networkcapable of delivering voice, Internet and televisionservices. However, they are not alone -direct broadcast satellite operators, traditionaltelephony service providers and new entrantsare all targeting the same market, each believingthat their background will give thema unique advantage. The objective is to createa service bundle that both retains existingcustomers and supports the acquisition of newcustomers. Some service providers may offerfree voice minutes, others will offer free contentor free broadband connectivity.All of these services will drive a requirementfor more bandwidth to each home. Looking atthe networks already rolling out in countriessuch as Korea, it seems likely that the typicalDSL or cable modem service of 2-4Mbit/stoday will need to grow to deliver 15-20Mbit/sper household in the near future.Another example of convergence is fixedmobile convergence, FMC. There is a hugeamount of interest in dual-mode handsets,which enable users to make low-cost VoIPcalls using a WiFi wireless LAN networkwhen at home, or in the office, then automaticallyswitch over to a GSM or 3G network ifthe user leaves the building. Current systems,based on the UMA, unlicensed mobile access,standard, offer some benefits,but this is only part of the story.A true FMC experience will allowthe user to seamlessly movebetween devices - PDA, smartphone, PC, fixed phone, TV -and the network will automaticallyenable the user to accessany of their services or contentproviders.The aim is to minimize or eliminatethe need for manual interventionfrom the user, with thenetwork having the intelligenceto recognize the user and automaticallyadapt the contentor service, to provide the bestpossible user experience on thefixed or mobile device that theuser has chosen. Some of thiscan be done with todayʼs technology,but we are already trialtestingthe next generation ofnetworks, based on IP MultimediaSubsystem, IMS, which willgreatly simplify the operation ofconverged, multi-service, fixedand mobile networks. In practicalterms, IMS will make it easierfor the service providers tomanage networks and users, andmake it faster and cheaper toadd new services. The end-userswill benefit from more sophisticated,easy-to-use services, atvery competitive prices.In just a few years, Voice overIP has developed from a technicalcuriosity to a mature technology underpinninga massive investment in new networksand services. Now comes the really excitingpart, as VoIP is combined with a range of otherexisting and emerging technologies to delivercompletely new types of converged communicationand entertainment services. We are stillin the relatively early stages of this market andit will be fascinating to see how both existingand new players compete, co-operate or combineto create the winning service propositions.Issue 2006 27

11th annual event340+ attendees70+ different carriersNew directions.Where the global wholesale carrier industrymeets to do real businessCarriers World, now in its 11th year, will explore all the prospects and strategies for profitingin the wholesale business environment.Valuable insight from over 30 world leading carriers, including AT&T, Vanco, Level 3Communications, France Telecom, TeliaSonera, Global Crossing, NTT Communications,Orbitel, ENTEL Chile, ROMTELECOM, PanTel, TDC Solutions, Easynet, Interoute, BTGlobal Services, Deutsche Telekom, Verizon, Cable & Wireless, Equant, COLT and manymore will give you all the knowledge you need to:• Identify the specific needs of emerging markets around the world and position yourbusiness to best serve them• Ensure your long term success by understanding the role of the wholesale carrier inthe evolving telecoms and media environment• Recognise and deliver the requirements of your valuable enterprise customers to keepthem satisfied and loyalIn addition, private trading rooms, speed networking sessions and the online contactmeeting system combine to create the perfect environment in which to conduct realbusiness ensuring your time out of the office is as valuable as possible.26 – 28 September 2006Victoria Park Plaza, London, UKBOOK NOW!Carriers World 2006Tel: +44 (0) 20 7242 2324Fax: +44 (0) 20 7242 2320www.carriersworld.com/2006/cwYes! I am interested in attending theconference. Please send me theconference agenda.Yes! I am interested in sponsorship andexhibition opportunities, please contact me.Name: ................................................................REGISTER NOW call: +44 (0) 20 7242 2324or book online at: www.carriersworld.com/2006/cwJob title: .............................................................Company: ...........................................................Address: .............................................................Gold sponsors............................................................................Silver sponsorsTel: .....................................................................Fax: ....................................................................Associate sponsorsOrganised byE-mail: ................................................................Event code: 1151 /CWwww.carriersworld.com/2006/cw28 Issue 2006

VoIPThe evolution of VoIP -the challenge and business caseby Cees de Jong, Senior Vice President,Global Telecom Marketing, Atos OriginLow cost voice calling over the Internet is transforming communications in the developingworld, in businesses everywhere, and threatening established operators. Voice over IP, VoIP, isforcing operators worldwide to re-think their business. VoIP has grown together with the rapidgrowth of broadband access, often wireless, throughout the world. Household names such asGoogle will soon join VoIP providers such as Skype and Vonage in the marketplace. This willaccelerate both the competition and the growth of the market.Cees de Jong is Atos Originʼs Senior Vice President, Global Telecom Marketing operations. He is responsible for global sales, marketingand strategy and strategic partnerships as well as internal and external marketing communications. Prior to joining Atos Origin, Mr deJong held several managerial positions with the Dutch telecom operator KPN, where he started his career as a project manager in the ITdepartment. Most recently, he was Managing Director of KPN Datacenter, which later outsourced its IT operations to Atos Origin.Cees de Jong holds a Technical Degree from the HTS Electrical Engineering in Leeuwarden, as well as an MBA from the RotterdamSchool of Management.Voice over IP, VoIP, has been much hypedover the past few years, but the last two yearshave seen telecoms operators accept that thebenefits of VoIP to the consumer and businessuser mean that investment in VoIP infrastructureand services is necessary. The result hasbeen widespread adoption and acceptance ofthe technology in many territories throughoutthe world; it has been a whirlwind 18 months.Fears over reliability, security and cost havebeen allayed as network transport and qualitystandards have improved dramatically -and look set to continue to do so. Broadbandtake-up has rocketed, almost reaching saturationamong enterprises, leading to greatlyimproved quality of Internet calls. The packetnature of VoIP has shown itself actually to improve,intrinsically, the security of voice communicationsat the transport layer, although itstill presents security challenges at the applicationlayer and requires businesses to apply thesame security management policies they usefor critical data services. The cost of VoIP providesanother advantage; VoIP greatly reducesthe cost of calls, particularly for heavy phoneusers such as call centres or international businesses.The business caseThe benefits for businesses are there for everyoneto see. VoIP provides lower, often almostfree, calling, long-term lower infrastructurecosts, and advanced management and reportingtools. VoIP can combine voice with videoand offer a long series of features such as, forexample, ʻfollow meʼ single user numbers formobile workers, and businesses that no longerneed traditional public branch exchange, PBX,equipment in their offices. With all these featuresand facilities, VoIP is becoming not justa viable option for businesses but an inevitableone.“Consumers do not careabout the platform that managestheir calls. They buyservices, not technology.”Nevertheless, I think there are several criticalquestions businesses ought to ask themselvesbefore rushing to make the switch to VoIP.Is there a real business case to convert fromexisting systems? How will the process bemanaged? Who should provide the service?Is it truly necessary to integrate data, video orvoice? The change from PBX to VoIP is likelyto be a slow one. Managing the change willcall for a short-term increase in ʻhalf-and-halfʼsolutions - applications that connect the oldand new environments - that ease the evolutionarypath to a fully IP-based solution.The impact on consumers and home usersConsumers do not care about the platformthat manages their calls. They buy services,not technology. Will it work? Will my calls becheaper? Can I pick up the phone and see theperson Iʼm calling? ʻHow does it work?ʼ is thelast question most consumers will ask. Newentrants to the VoIP market include names,such as Google and eBay, that even the mostuninformed Internet users have heard of, so itseems unlikely that any of us will be untouchedby VoIP. It is just a matter of time.With the future of VoIP a ʻgivenʼ in consumerland,the service providersʼ priority in a saturatedmarket will no doubt be to keep theircustomers loyal. Sticky, value-added serviceswill be the order of the day, but more aboutthis later.The impact on operatorsApplication-based providers are entering themarket to compete with traditional operators,such as Skype (recently acquired by eBay) andVonage, which rely on peer-to-peer technologyrouting calls directly between the computersof two, or more, users. Skype in particular hasbuilt a loyal base of customers that adopt analmost evangelical promotion of its services:“Iʼll Skype you.” has become a part of everydaylanguage for avid converts.Issue 2006 29

VoIP“Many incumbent operatorsare investing heavily in VoIPplatforms.”Microsoft announced as far back as 2001 that itwas planning to embed session initiation protocol,SIP (the most popular VoIP standard),into Windows XP. ISPs are rapidly developingVoIP services to complement their broadbandInternet offering. Even Google is getting inon the act, having recently announced its intentionto enter the VoIP market. Unexpectedcompetition means that traditional telecomsservice providers have had to take note of aninexorable trend towards cheaper or streamlinedcommunications that could cut out a seriouschunk of their revenues.Many incumbent operators are investingheavily in VoIP platforms. Mostoperators are facing the fact that revenuesfrom voice calls are decliningand the big opportunity for them nowlies in converged networks. KPN inthe Netherlands, for example, is investingin IP equipment and sees itselfbecoming a market leader in broadbandservices, not just voice.This kind of dramatic shift in businessby operators requires a significantchange in infrastructure and IT systems,as well as updating billing andprovisioning systems to meet the newdemand, but the cost of not competingat all is far greater.Into the futureIt is hard, in my opinion, to overestimatethe impact that VoIP will haveon the telecoms market in both the developedand developing worlds. Whenthe Internet started to support voice,telecommunications tradition wasshattered. All at once, distance, locationand time suddenly became immaterial,as did the regulatory conventions thatgoverned the traditional telecoms landscape.The low cost of voice calls over the Internetis transforming the developing world andbusiness everywhere. All of a sudden, peopleand businesses who could not communicatebefore, could not afford it, can now speak toeach other. The advent of inexpensive laptopsmeans that VoIP will be used potentially bymillions more people that could never haveafforded to use a phone. VoIP not only is awonderful productivity booster for corporationsand a cost saver for consumers, it is nowthe definitive technology enabling the less fortunatethroughout our world to communicatelike the rest of us.In the developed world, over the last 12months, the market has moved on swiftly - thetechnology has been accepted and its adoptionis accelerating. The value of VoIP is no longerin doubt. Now, the discussion has moved on toone of value and customer demand - how touse the technology to keep valuable customers.The customer-centric environmentWhat is clear is that, for telecoms companies,2006 will see the emergence of the customercentricenvironment. With the adoption ofVoIP, service providers and operators will gaingreater insight into customer behaviour. In myopinion, they must use this information to provideservices and applications that will keepcustomers inspired and loyal.Operators will focus on creating a single customerview that will help them understand theneeds and desires of each individual. The buzzphrase will be ʻexcellence in customer serviceʼ,and the market will see the emergenceof smarter service models, including consolidatedbilling systems, that will tie offeringstogether and make buying services quick andeasy.The Future – hosted voice solutionsThe opportunity for future voice services liesin hosted IP applications that combine traditionalnetwork operations and new-enhancedIP services. These services range from simplevideo conferencing to contact centre applications.Future demand for these types of bundledpackages will be derived principally from educationalefforts on the part of service providers,and the overall growth of IP connectivityin each of the Western European countries. AsIP VPNs and IP voice services become moreprevalent, demand for applications that connectold and new environments and improvenetwork security and efficiency will alsogrow.Large global corporations, like Heinz (the foodmanufacturer) for example, have deployed IPnetworks at their UK and overseas office sitesand are using basic IP voice services. In Germany,Lufthansa is also starting to integrateIP voice services at many of its branch officesites.SummaryThe huge changes that are takingplace within the market are excitingand daunting in equal measure. Thetelecom companies that have survivedthe instability of the past few years arewatching the market open up beforetheir very eyes. The opportunities tocreate much needed revenue streamsfrom the VoIP revolution are incredible,but the competitive landscape isbecoming more and more complex.Traditional operators will need tobe aware of the emergence of a newbreed of service providers, some ofwhom will come from less traditionalbeginnings. Software companies likeMicrosoft, which are placing bets onthe success of IPTV, ISPs like Yahoo!,and content providers/Internet companieslike Google are all preparingthemselves to take advantage of telecomsconvergence to become the telecomscompanies of the future.The year 2006 is the year of the customer.Telecoms organisations will focuson making their offerings compelling andʻstickyʼ by giving their customers a rewardingexperience. Companies will have to gain a realunderstanding of what customers want andneed, so that they know how to keep them interestedwhilst they are bombarded with offersfrom competitors.Technologically, innovation is this yearʼswatchword. Exciting new technologies inspiredand facilitated by convergence will revolutionisethe way that people consume informationand will open the doors for operators toonce again generate real revenue. 30 Issue 2006

IPTVIPTV - open issuesby Helmut Leopold, Chairman, Broadband Services ForumIPTV, Internet Protocol television, a quickly growing force in home entertainment, uses DSL,digital subscriber line, technology to deliver television programming to the home via the existingpublic telephone network. Traditional telephone operating companies see this as a wayto compete with the cable TV companies that are starting to compete with them by offeringinexpensive voice services. IPTV can provide time-shifted and on-demand programming inexpensively,and is ideal for the distribution of user-generated content to local community orspecial interest groups.Helmut Leopold is the Chairman of the Broadband Services Forum. He is also the Managing Director of Platform and TechnologyManagement at Telekom Austria. He worked previously at Alcatel, where he served as a research engineer at Alcatelʼs ELIN ResearchCenter, specialising in high performance networking and multimedia communications. Mr Leopold is the Vice President of the AustrianResearch Center Forschungszentrum Telekommunikation Wien (FTW), and President of the IPV6 Task Force in Austria. Helmut Leopoldhas been actively involved in European projects in broadband (ESPRIT, RACE, ACTS, IST and COST) and in international standardization(ETSI), as well as in various task forces in telecommunication programmes of the Austrian government. He has lectured on broadbandcommunications at the University of Technology in Vienna for many years, and has been evaluator in the R&D programmes of theEuropean Commission.Mr Leopold holds a Degree in Electronics and Communications from the Technical College HTBLV Rankweil, Austria and a Degree inComputer Science from the University of Technology in Vienna.Internet Protocol television, IPTV, servicesare proliferating all over the world and operatorsface a variety of challenges according totheir specific local market and competitiveconditions. However, there are a number ofopen issues - such as network capabilities,standardisation, cost-effectiveness, security,service differentiation, disruptive tendenciesand new business models - that are common toall global providers.Network capabilitiesNetwork capacity is one of the main issuesfacing the provision of IPTV services. Thecurrent trend is towards homes with multipleTVs and PCs; these make unprecedented demandsupon network capabilities. Yet, this is anatural cycle, with technological developmentalways responding to market requirements in amutual dependency. New technologies such asADSL2+, asymmetric digital subscriber line 2+, and VDSL2, very high-speed digital subscriberline 2, allow higher bandwidths thanclassical ADSL. ADSL2+, for instance, enablesSTDV, standard TV quality, per household.Fibre to the curb, FTTC with VDSL2,the next step in infrastructure evolution, enablesHDTV, high definition TV, video quality.However, the challenge is to build a largeand solid enough customer base, sufficient torecoup the costs of the rollout of new infrastructure.At the same time, the further developmentof encryption technologies will helpreduce bandwidth requirements and thereforecounteract rising capacity demands. The latestencoding technique, MPEG 4, will allow forthe widespread deployment of new IPTV servicesat low cost and contribute to reaching acritical mass of users.StandardisationStandardisation is imperative for the developmentof a worldwide mass-market in low-costIPTV services, but standardisation processesare very time-consuming. Until now, all IPTVservice operators have deployed their ownʻhome-grownʼ solutions, but the industry ismaking a concerted effort to push standardisation,which will allow for mass integration andinteroperability. To achieve this, critical issuessuch as technology maturity, technology availability,cost-effectiveness and the mass-marketpotential of appropriate customer premiseequipment, CPE, need to be addressed. In thistransitional phase, the main challenge is tofind a balance between flexibility and non-optimisedinvestments in technologies that mightprove obsolete over the long term. Cooperationwith the industry leaders in the IPTV businessis crucial to choose the best options basedon present availability, with a view to updatingand upgrading technologies on an ongoingbasis. In other words, we need to ensure thata standardised approach to IPTV is ʻfutureproofedʼ.Content securityContent security is also one of the most criticalissues for IPTV. Content has an extremelyhigh market value and it is critically importantthat an IPTV service provider can guaranteesecure network platforms. The choice of theright content protection solution is imperativeto conclude negotiations successfully throughoutthe content acquisition process. Most contentcreators opt to distribute content only toservice providers that adhere to proper levelsof content and network security. Without IPTVsecurity, service providers cannot live up tothe expectations of both customers and contentcreators in terms of availability, level of qualityand exclusivity when a premium is requested.Illegal free content redistribution, content theftthrough unauthorised access, video or networkoutages or congestion will jeopardize the valueof content and of the entertainment experienceas a whole. Ultimately, this may result in nonpaymentof services, in customer churn and inthe reluctance of content distributors to enterinto business with ʻunreliableʼ telcos.Issue 2006 31

IPTVIPTV services via DSL-networks are potentiallysuperior to other TV distribution architecturesin terms of security. IPTV infrastructurebased on broadband access has an inherentlyhigher security level than traditional distributionmedia such as satellite and cable. Satelliteand cable infrastructures distribute the samecontent to all customers and need encryptionsolutions to provide exclusive content. In contrast,DSL-based content delivery networksfunction like a dedicated channel with highsecurity capability.The three main pillars of security in terms ofIPTV services are confidentiality, integrity andaccessibility, CIA. Confidentiality refers tocontrol and authorisation of access to content.Integrity refers to the protection of content inits original form, i.e. Digital Right Management,DRM. Accessibility guarantees that contentis accessible under any condition, whichis quite a challenging undertaking given theperformance requirements of IPTV. Compliancewith all of these requirements is a must.Content as service differentiatorIn order to stay successful telcos have to reevaluatecontinuously what kind of servicescustomers want and how to deliver them. Contentas major service differentiator is a newphenomenon. Telcos have to re-think their oldbusiness models in order to meet the demandsof tomorrowʼs information and entertainmenthungrysociety.The range of multimedia, broadband entertainmentservices continues to grow, but customerreaction tells us that self-generated content,and content for small interest groups, will playan especially important role for the future successof IPTV.We have devoted intensive efforts to understandingbuying patterns and consumer profiles.Identifying the role of IPTV within awider television industry is crucial. Our objectiveis to take a long-term view and work hardon the types of technologies and content thatwill attract users.We have learned that one of the unique sellingpropositions of IPTV is content that appealsto small interest groups. We believe thatcommunicating to micro-level audiences withhighly personalised, emotionally and sociallyrelevant content could be the role for IPTVgoing forward. This will change the nature ofadvertising and will have a disruptive effect onthe broadcasting industry as a whole.One of the sources of information in understandingself-generated content has beenBuntes Fernsehen, a pilot project realized byTelekom Austria in a small rural communityin Upper Austria. Telekom Austria providedthe citizens with an ADSL-based distributionplatform to generate and watch content generatedby themselves and the local community.The project saw citizens turning into contentproducers and aggregators, addressing theirpersonal community and up-loading their owncontent via a feedback channel to the distributionplatform provided by the operator.In addition to locally relevant content, boththe ability to provide robust interactivity anda good user interface are fundamental elementsin developing a successful interactiveIP television service. We see IPTV opening upopportunities for the way in which communitiesaddress local issues and problems - it isa good platform for local politics and lobbying.Content addressing local issues can be avery effective way to raise awareness, fosterdiscussions and influence the decision-makingprocess within the community.The future of IPTV will also rely upon its successas a business tool, especially for small andmedium enterprises, SMEs. We believe thatIPTV will provide local and niche businesseswith powerful tools and a unique platform toaddress highly relevant micro audiences in avery cost-effective way.Innovation potential of IPTV: new businessmodelsIPTV is also posing unprecedented challengesin terms of new business models since it hasa disruptive impact on traditional media businesses,which in turn have come under extremepressure to modernise themselves. IPTVis boosting innovation, improving customerconvenience on an ongoing basis and creatingsustainable success for companies.In the past, the content industry was scepticalabout IPTV services. It was convincedthat traditional business models were viableenough and needed no reengineering. Todaythe situation is evolving quickly, and theproliferation of IPTV applications opens upbrand-new opportunities. The content industryhas recognised the potential of such newIP-based TV services as an additional sourceof revenue generation, and is willing to collaboratewith service providers to explore newcontent distribution channels, enter new marketsand forge new partnerships.Moreover, time-shifted TV and video on demand,VoD, style content distribution thatbring commercial-skipping capabilities, usergeneratedcontent and niche programmes, requirenew, specific, advertising formats. Thechallenge is to find solutions that can be viablein the arena of global competition.Finally, IPTV can provide bundles of differentapplications. These may include a selectionof digital music channels, gaming ondemand, home video conferencing or remotehome video monitoring, as well as interactiveservices for special interest groups in the areasof e-health, e-government and e-learning. Aspreviously mentioned, self-generated contentwith high emotional relevance is also seen as aʻkiller applicationʼ for IPTV. These additionalfeatures not only offer a great measure of differentiationfrom the competing solutions, butare also revenue drivers that provide serviceproviders the opportunity to ʻup-sellʼ and, atthe same time, increase customer loyalty.Key players in the long run: telcos versusbroadcastersIt is of crucial importance to embrace IPTV asearly as possible, even if not all the technicalissues have been resolved. We will only knowin the long run whether IPTV providers will beable to break the domination of the traditionalcontent and broadcasting industries and turninto media distributors, or if they will simplybecome access providers. This exciting age ofIPTV promises to keep us in suspense a littlewhile longer. Connect-World iscelebrating its 10th yearanniversaryThrough the years, Connect-World’s authors told of the riseof mobile, of fibre, of wirelessand of broadband; they told ofthe dot.com meltdown, ofdigital inclusion and convergence,of standards and breakthroughs,the rise of IP andthe fall of switching and of theregulatory turnaround.In every issue of Connect-Worldheads of state, ministers andregulators, heads ofinternational institutions andleaders of industry speak ofwhat the ICT revolution, as ithappens, means to the peoplein their regions of the world.www.connect-world.com32 Issue 2006

She’s not a difficult customer. She just wants the latest services,great prices and no hassle.Trust Intec to help.Customers aren’t easy to please. They want the latestcommunications services, and they want them now. It’s up toyou to provide them. It’s up to us to help you.Intec helps over 360 carriers worldwide deliver the high performanceservices their customers demand, like IPTV, music downloads,bandwidth on demand, mobile Internet and VoIP. Backed by thetechnical expertise of over 1,000 professionals, and partnerships withthe world’s best system integrators, we build our BSS/OSS solutions todeliver the real-time, high-volume performance services you need tomeet the demands of your toughest customers.Find out more at www.intecbilling.com, or email us atinfo@intecbilling.comIssue 2006 33

IPTV Content SecuritySecuring the brave new TV worldby Jeremy Thorp, CEO, Latens SystemsThe growth of IP based TV content distribution depends upon the providerʼs ability to controlaccess to content and receive payment for it. Conditional Access, CA, and Digital Rights Management,DRM, solutions work together to protect access. Together, they make sure that onlyauthorized users can access and transfer (or not) the content between authorised devices, andthat the service and content providers can bill for providing such access. Many current solutionsare hardware-based; newer, more flexible solutions use software.Jeremy Thorp is the CEO of Latens Systems; he has served in a number of high-level positions in the broadcast industry on both sidesof the technology divide - as both an operator and as a technology vendor. Prior to founding Latens in 2002, Jeremy Thorp was ChiefTechnology Officer at Tandberg Television. Previously, Mr Thorp served as Group Managing Director, responsible for design and roll outof interactive cable systems, Internet content and other services and as NTLʼs Director of Strategy. Mr Thorp began his career at Bain& Co, a leading management-consulting firm.Mr Thorp earned his Degree in Engineering from London University.There is a ʻBrave New TV Worldʼ being inventedright now and, as is usual during timesof change, there are many issues to debate andquestions to answer. Future business models,network suitability for multicasting and potentialprofitability are all fertile areas for crystalball gazing. However, of one thing we can becertain: in whatever way TV is distributed, itis crucial that revenues and content are adequatelyprotected. Without content protection,the rights owners, be they Hollywood studiosor pay TV channels, do not have a sustainablebusiness model. Once their content leaksout, unprotected, over the Internet its valuefor future exploitation is hugely diminished.Presently, smartcards protect most pay TVover cable and satellite TV. Although this protectionis reasonably effective, it introducesextra costs and reduces flexibility. Given theproblems in deploying hardware-based ConditionalAccess, CA, and the power of moderncryptographic techniques combined with digitalnetworks software-based security solutions,we are likely to see a migration to software solutions.On their own, the flexibility and costadvantages of software security are highlycompelling, but when combined with the understandingthat software security can providegreater security levels than hardware security,you can see why the days of hardware-basedsecurity are numbered. Indeed, it is now veryunusual to see new operators launching serviceswith hardware-based security.“IPTV - it is becoming moreand more apparent that thesoftware-based approach tocontent and revenue securityis becoming the standardsecurity approach.”The ʻBrave New TV Worldʼ enjoys a multiplicityof new delivery mechanisms, with anew business model appearing almost everyday. For the sake of simplicity, Iʼm going todivide these new television services into IPTVand Internet-TV.IPTV – operators of IPTV services provide TVand additional communication services over adedicated private IP network. Initially, theseservices are comparable to a cable service, butover time the services will increasingly seekto defeat the competition using the power andflexibility of IP networking to offer a richerand more powerful TV experience.Internet TV – refers to the use of broadbandconnectivity over the public Internet to offervideo entertainment. These services alreadyinclude myriad business models, fromstraightforward streamed-video services to thelaunch of hybrid Internet TV services, whichdeliver only Video on Demand, VoD, or otherenhanced services, over the Internet. Theseexciting new Internet TV services includevideo distribution enabled by peer-to-peer distribution,and services that use the Internet togive travellers access to the same content theywould have when at home.Securing new TV servicesFirst, looking at IPTV, it is becoming moreand more apparent that the software-basedapproach to content and revenue security isbecoming the standard security approach. Theuse of secure software modules makes it economicallyunattractive for a pirate to attemptto produce and profit from a hack. This sort ofprotection resulted from a thorough re-evaluationof how to secure TV revenues and content.Using secure software modules combinedwith the power of the network, you can change- within minutes - the security on a particularnetwork, to respond to any pirate attack thesystem detects. This speedy response meansthat there is little possibility for the pirate togain financially from an attack. Consequently,such protected networks are not only more secure,but are also unlikely to be attacked. As34 Issue 2006

IPTV Content Security“There are a number of initiativesto standardise DRMinteractions, but these areproving difficult to concludebecause of technical, patentand commercial rivalries.”IPTV systems gain subscribers and increasein profitability they will increasingly seek togain early access to recent content. At thispoint, IPTV systems will increasingly becomeprime targets for commercial pirate organisations,and protection will become much moreimportant for success than other securitytools such as watermarking. Chasing contentthrough watermarks that identify the sourceof the material will be operationally too difficult.Obtaining the information required toidentify individual users is often prohibitedby privacy legislation and then is only usefulafter a breach, hardly a sensible main lineof defence. The operator, when faced with apirateʼs attack, needs to be able to secure hisoperating revenues - a properly designed andimplemented software CA system will allowthe operator to do exactly this.For those business models that are perhapsbetter described as Internet TV, software enabledDigital Rights Management, DRM, ispresently the favoured method of protectingcontent. However, as Internet TV models becomemore mature, it will be crucial for the securityschemes deployed to offer the revenueprotection strength of CA. In general, I believewe will see a future in which CA will increasinglyoffer DRM type functionality and viceversa. An example of why it is important thatCA and DRM co-exist and work together isaddressability. Users will want to move contentaround different devices, between, say,their set top-box, one or more mobile devicesand their PC.In advertising supported TV business models,the addressability provided by CA, workingwith DRM, enables the operator to report accuratelyhow consumers interact with a brand,wherever and whenever that interaction takesplace. For paid content models, CA/DRM enablesbroadcasters, content owners and operatorsto have a choice as to whether they enableviewers to move content to other devices apartfrom the set-top box. It is likely that TV serviceproviders will be able to gain incrementalsubscription revenues from content portabilityas well as additional advertising/marketinggenerated revenues. All of this is enabledby solutions that use secure software agentsto track and provide marketing informationwhilst protecting content and revenues.CA and DRM will also enable new revenuestreams by enabling consumers to enjoy paidfor content when, where and how they wantwith DRM policies that control how contentcan move from device to device.Standards will also become critically important.In the ʻBrave New TV Worldʼ wherecontent is purchased, stored and consumedon different devices, itʼs hard to see how suchconsumption patterns would be possible withouta standards-based approach, which is morelikely to deliver the interoperability necessaryin a multiple-device future than individualproprietary DRM schemes. Without standards,there is also the danger that a single proprietarytechnology could become too powerful,leading to the content industry becominghighly exposed to a break of security in thatsystem, or not being best served by that contentsecurity vendorʼs future solutions.“To protect future TVservices, security systemsmust provide standardsbased scalable solutionsthat ensure that TV operatorshave the ultimate in contentpackaging freedom”There are a number of initiatives to standardiseDRM interactions, but these are provingdifficult to conclude because of technical,patent and commercial rivalries. In the future,however, it will be increasingly important tohave CA and DRM schemes that work together.The CA system touches many parts of theoperator system - so making it easy to integrateis important, and following the existingDigital Video Broadcasting, DVB, standardshelps enormously with this. Greater flexibilitythan traditional CAS systems offer, regardingthe type of business rules an operator canput in place to market its video services, isimportant. Customers with smart-card-basedsolutions are often restricted in what they cando in terms of packaging their product - nextgeneration security architectures are removingthose restrictions.Another key issue in security for TV servicesis scalability. This is particularly true intodayʼs IPTV market, where once an operatorpasses the 20,000 subscriber mark, manyof the technologies creak at the seams andinteroperability is stretched. In comparison,tests run with a large European cable operatorʼssystem data, which was doubled in sizeand run as a benchmark, proved that softwaresystems, in principle, had no trouble scaling toover four million customers. Scalability reallyis important, particularly since many currentCA/DRM solutions do not, physically and/oreconomically, scale-up well.In todayʼs TV environment there are concernsover fragmented audiences, competingbusiness models, disconnects between thecosts and revenues of network builders andvideo distributors, and increasing pressure tomaximise return-on-investment. As a result,it is vitally important that operators choosesecurity systems that maximise the flexibilityof their content packaging and their businessmodels while providing the highest possiblelevels of security. The best way to do this isthrough software security. To protect futureTV services, security systems must providestandards-based scalable solutions that ensurethat TV operators have the ultimate in contentpackaging freedom and complete control overhow they market their services, so that theywill be able to develop and adapt to the futurerequirements of new services and new customerdemands. Issue 2006 35

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IPTVThe IPTV quality challengeby Peter Collingwood, Regional Vice President, Europe, Middle East & Africa,JDSU Communications Test divisionTriple play, the combination of voice, data and video, is the package service providers need tocompete in the marketplace today. The changeover from traditional telephony calls for morethan just upgrading the network to transmit a TV signal. Video quality requirements are quitedifferent from those for voice and data - and significantly more difficult to maintain. Subscribersatisfaction and retention depends upon quality of service, reduced installation and supportproblems, and constant end-to-end testing to guarantee high-quality reception.Peter Collingwood is Regional Vice President, Europe, and Middle East & Africa for JDSUʼs Communications Test division (formerlyActerna). Mr Collingwood has been with the organization for over 18 years and has served in senior level corporate positions in Europeand the United States.Mr Collingwood holds a Bachelor of Science Electronics Engineering and Diploma in Industrial Studies from Loughborough Universityof Technology.Across all segments of the market - from R&Dlabs to customersʼ homes - triple-play servicesdelivery is raising expectations. Equipmentmanufacturers envision a strong return fromnetwork build out. Service providers hope toregain or increase average revenue per user,ARPU, by entering this new market. Mostimportantly, consumers anticipate a broaderrange of service options and features at a competitiveprice.Confidence is also high in all segments. Withgreat strides made in broadband voice and data,the market is poised for video-Internet ProtocolTelevision, IPTV, but to make the tripleplay happen, efficient deployment is crucial.Successful widespread IPTV adoption willhinge on a precise balance between rapid servicedelivery and on-going outstanding qualityof service, QoS. Close attention to a qualityinstallation and service assurance strategy thatsignificantly reduces or eliminates early installationfailures is key to striking this balanceand, ultimately, unleashing the full potential ofthe voice, video and data bundle.Demanding audienceIn the home consumer arena, TV is a highlyʻemotionalʼ medium. Anticipation for a particularshow or event can build for days, weeksand even entire seasons. When the awaited“Differing from terrestrialor satellite delivery mechanisms,IPTV communicationgoes beyond sending aselection and receiving thecontent.”time arrives, viewers want a flawless entertainmentexperience, one where the deliveryservice performs perfectly and invisibly.This expectation stems partially from customerexperience with the solid reliability of installedterrestrial and satellite broadcast systems. Inthe IPTV market, the expectation is magnifiedby the consumer trend toward high-definitionentertainment systems. As pace setters allocateincreasing portions of their entertainmentbudgets to home theatre gadgetry, investmentsare climbing well into the thousands for highresolutionTVs and digital surround soundsystems. Consumersʼ quality of experience,QoE, expectations are growing exponentiallyas well. Consumers are embracing IPTV as therevolutionary service delivery mechanism thatwill showcase the full potential of their homesystem investments.These early adopters will not settle for servicedelivery that does not yield maximumsatisfaction in the form of total quality entertainment,and they will not wait patiently forproblem resolution. Providers may have onlyone chance to get the service right, or lose thecustomer. Sophisticated and educated, theseconsumers will demand near-immediate turnup,expect perfect service performance fromday one, and readily churn to the competitionwhen they do not receive it.Complex service, complex infrastructureUnderstanding the complexity of deployingan IPTV service that will meet these high expectationsbegins with an understanding ofthe service itself. IPTV is not simply televisionover the Internet. Rather, it includes liveand broadcast TV as well as high-end optionssuch as video-on-demand, VoD, content andlive pause/rewind/fast forward programmecontrol functionality. The service is deliveredusing Internet protocol over private networkswith broadband connections, either through aPC connected to the TV or a set-top box, STB.The STB is a device that contains a small computerto decode the entertainment media datastream and let customers choose and manipulatecontent for immediate and future viewing.Differing from terrestrial or satellite deliverymechanisms, IPTV communication goes beyondsending a selection and receiving thecontent. IPTV can include two-way interactivecommunication applications such as gam-Issue 2006 37

IPTV“For service providers,delivering this enhancedcapability comes at the priceof implementing new technologiesand managing morecomplex networks.”ing, distance learning or video conferencing.By fully utilizing the high-speed functionalityof the broadband infrastructure, IPTV givesthe consumer greater control over content byestablishing viewing schedules for stored contentor selecting viewing sequences for broadcastvideo.For service providers, delivering this enhancedcapability comes at the price of implementingnew technologies and managing more complexnetworks. IPTV is made possible throughthe advent of technology and protocols tosend high-speed transmissions reliably overmyriad existing and emerging infrastructures.ADSL2+ and VDSL (new higher speed versionsof digital subscriber lines, DSL) are enablingproviders to maximize existing copper,while the on-going build-out of optical fibreto the network edge, FTTx, is bringing vastpotential for new service delivery. The buildingblocks that form the network infrastructurefor IPTV are the same as those that form thefoundation for VoIP and high-speed data delivery.(See Figure: Building Blocks of TriplePlay) With the addition of a video head end- the main facility for generating IPTV systemsignals - providers prepare media streams totravel through their distribution and accessnetworks to the customerʼs home, and the inhomedistribution network. However, unlikeVoIP and data services, IPTV requires continuous,in-depth testing and monitoring ofthe network infrastructure as well as proactiveintervention to maintain the quality of the datatravelling on it.New testing considerationsAcknowledging the sheer complexity of IPTVdeployment is the providerʼs first step towardsuccessful service rollout. Comprehensiveplanning for its unique test and measurementneeds is the next. Bringing video flows onlineon a network already carrying data and voicetraffic greatly increases bandwidth demandson the infrastructure. The dynamic nature ofvideo - with its frequent and rapid channelchanging and VoD requests, for example - isan issue that providers have not addressedpreviously in meeting voice and data class ofservice, CoS, parameters. In addition, traditionaltransport or access test equipment thatmay already be in place on a network cannotreliably test IPTV. The existing test solutionscannot delve into IPTVʼs application-specificQoS metrics or resolve trouble before it affectscustomer service. (See Sidebar/ Photo: Whatʼswrong with this picture?)Essentially, each sector of the service deliverynetwork - head end, distribution, access andin-home - needs IPTV-specific test solutions.Transport and access testing are familiar tasksfor service providers, but what is standard fortraditional services has been re-defined fortriple play. Copper and fibre qualification takeon new significance when preparing the physicalplant to support the increased bandwidthrequired by simultaneous delivery of voice,video and data. As data rates continue to increase,use of wider frequency spectrums isrequired. This, in turn, means field techniciansmust carry a new class of tool capable of testingto new and more exacting specifications.With triple play, the access loop no longerends at the network interface device outsidethe customerʼs house, it extends throughoutthe in-home distribution network and so, heretoo, a new set of tools is required.Good planning can assimilate these refinementsto transport and access testing strategyas extensions of existing practices. Where thedramatic difference in needs and approach occursis the digital video testing aspect. Serviceproviders deploying IPTV face entirely newtest methodologies and service assurance challenges.While digital video testing has manyfacets, the most important to consider is ensuringstream composition integrity. Systemsand tools that maintain timing and synchronizationaccuracy, assure audio/visual quality,and maintain compliance with broadcastingindustry standards accomplish this.The digital transport stream that brings IPTVservice to customersʼ homes is different instructure and composition than the other dataand signals travelling over the broadband network.Quality video stream content begins atthe packet level, in the head end. Governed byMPEG-2 standards, each packet in the transportstream is coded at the head end with extensiveinformation needed to ensure QoS atits destination. Each packet must accuratelyretain this information as it moves through thedistribution, access and home networks to thecustomerʼs STB.The video stream is comprised of an endlessflow of these packets, each carrying combineddigital and audio payloads, and there are oftenmultiple programmes on each stream. Tosort the millions of packets, and arrange themto display synchronized sound and pictures,the stream carries an encoded map of the incomingcontent that directs the STB decodingprocess. In addition, an MPEG transportstream may include tables that list subscriptionand pay-per-view options as well as datafor electronic programme guides. Of concernfor providers is that the complex contents ofthese flows have less tolerance for packet lossand jitter. Consequently, IPTV service requiresdistribution and access networks to perform tohigher standards.With this reduced tolerance, each IPTV datapacket travelling across the network introducesthe potential for error - error that willcompromise viewing quality and erode thecustomerʼs confidence in, and loyalty to, theservice provider. These errors can be tremendouslydifficult to locate and resolve. Lackingthe appropriate equipment, technicians mightspend days sectionalizing MPEG transportlayer problems, since these errors frequentlycannot be detected on the IP layer. To effectivelydiminish this and other troubleshootingdifficulties, providers can employ a comprehensivecentralized digital video test system.Such a system looks into all IPTV data flowssimultaneously, interprets stream maps andtables, and presents the results in a mannerthat lets the technicians assess easily the healthof the stream. Then, actions can be taken, remotelyif needed, to ensure high QoS.It is important to note that bringing the serviceto the customerʼs door is not where theIPTV service delivery challenge ends. IPTVservice has unique in-home network testingconsiderations as well. When field personnelare dispatched to a residence, the service costsrise sharply if the technician cannot completethe job in one visit. The technician must carrytools that will emulate the customerʼs STB toobtain and validate the video programme flowsand QoS values that have been established bythe service provider. Additionally, the technicianmay need tools to test the in-home distributionnetwork if acceptable service qualitycannot be verified. Multiple visits with poorquality service, or no service, will not pleasethe discriminating customer.A matter of timingBuying trends show that consumers are readyto invest in new services. Market research reportsshow that all major telecom providers“It is important to note thatbringing the service to thecustomer’s door is not wherethe IPTV service deliverychallenge ends.”38 Issue 2006

IPTVThe rapid adoption and evolutionary natureof triple-play services has resultedin myriad scenarios for delivering VoIP,data, and IPTV services to customers.Regardless of how the triple-play infrastructurebuilding blocks are stacked,providers are striving for a commongoal: solid network performance thatdelivers the services and quality of experiencecustomers want.Whatʼs wrong with this picture?and multiple service organizations are buildingout to claim a share of the IPTV servicesdelivery profits. The data supports the rationale- never before has there been a situation whereattention to test and measurement was so vitalto realizing the potential of a new serviceopportunity. Informed providers will make theinvestment. Those who do not will be quicklypassed as their well-prepared competitors barrelahead with the trend.Faulty IPTV data transmission can leave thecustomer with unacceptable picture quality.This is particularly true with flat-screen highdefinition TVs, a minute error can yield hugecomplications including loss of audio, lip syncerrors, blocking, tiling or freezing.Diagnosis for these problems is complex - oneor a multitude of network conditions couldresult in garbled or missing sound and poorqualityimages. Jitter on the line, packet lossand faulty synchronization are only a few ofthe conditions that can give way to unacceptableQoS. Using traditional test methods tomeasure IP parameters, a technician may findtransport network performance to be within acceptablelevels, yet QoS is not. Drilling downinto the IP transport stream is the first level ofproblem solving, but to resolve QoS issues forIPTV, the technician must be able to delve intothe MPEG transport stream.Whether turning up IPTV service or respondingto a trouble call, technicians must carry instrumentsthat not only verify service qualityand IP transport parameters from the demarcationpoint, but verifies that the customer willbe able to change channels and take advantageof fee-based services as well.To retain customers and decrease repeat servicecalls, the provider must ultimately employtools to verify content stream integrityand a centralized, application-aware, serviceassurance system to prevent errors that occuron the network from affecting the customerʼsQoS. Issue 2006 39

IP TelephonyThe changing IP Telephony business modelby Allen Timpany, founder and CEO, VancoVirtual Network Operators pay to use excess capacity on existing networks and sell fully managedsolutions, customised for each client, under their own names. Since they do not investin infrastructure, they can provide services cheaply. Internet telephonyʼs claim to fame hasbeen its low, at times free, per minute costs, however the cost of handsets, support and trainingeliminate much of this advantage. Currently, the true value of IPT comes from the advancedbusiness support applications it makes possible.Allen Timpany is the founder and CEO of Vanco. He is the pioneer of the asset-light approach to networking. Mr Timpany coined theterm ʻVirtual Network Operatorʼ, which has become an industry standard. Allen Timpany has previously built a number of IT companies,including the largest IBM desktop-support business in the UK. Companies previously founded by Mr Timpany include: WakebourneLimited, specialising in the installation and maintenance of PCs and LANs; Tycom Limited, a UK-based PC manufacturer; and GuestelLimited, an Apple Computer dealer.Mr Timpany graduated from Bath University with a First Class Honours Degree in Electrical Engineering - Thermodynamics.Virtual Network Operators, VNOs, do not owninfrastructure, they procure it from the mostappropriate providers to deliver fully managedsolutions customised for each of its clients.Unlike companies that have chosen to investin IPT, Internet Protocol telephony, technologies,or not, as the case may be, VNOs havea product-independent view of this perennialhot topic.When IP Telephony first hit theenterprise radar at the turn of thecentury, the talk was all about costsavings. Innovators had got overthe introspective technology talkand carriers started to come toterms with this threat to their traditionalwire line cash cows, and togetherthey went to market sellingthe savings from IP. Not a bad decision,you might think, especiallywhen an ICM Research study indicates costreduction has been the number one priority forCIOs since this formal market analysis beganand probably before as well. However, whilethey were selling what enterprises wanted,they were not selling what IPT offered at thetime.Cost reduction arguments were based onʻfree callsʼ across an IP network verses ʻexpensiveʼminute rates. The reality is that analogueminute rates have come down in pricedramatically as carriers respond to the threatof IPT. However, the real sticking point is inthe changeover costs. Analogue telephonescost £20 per user and most businesses, ratherperversely, have them coming out of their“IP Telephones are still around £150 per user.Add to this support costs of £10 to £15 peruser per annum plus the expense ofretraining staff at the outset, and the costreduction arguments for IPT fall flat, even forcompanies that already have a IP datanetwork in place.”ears. Many have written off the cost of thesehandsets, and often a large part of the analoguenetwork that supports them. One newIPT customer, previously networked for bothtraditional voice and data by a national carrier,was found to have 2,000 unused PSTN ports itknew nothing about.Meanwhile, IP Telephones are still around£150 per user. Add to this support costs of £10to £15 per user per annum plus the expenseof retraining staff at the outset, and the costreduction arguments for IPT fall flat, evenfor companies that already have an IP datanetwork in place. However, it should be saidthat the big equipment vendors are makingsignificant concessions on the capital cost ofthe phones to win new business,which they hope to make back onthe support contracts, and this hasaltered the Return on Investment,ROI, calculation somewhat.There is, occasionally, a genuineROI argument for greenfield orremote sites and, in these cases,enterprise customers have startedto see financial benefits, albeit on asmall scale. Adopting IPT in greenfieldenvironments will usually make sense,but then it becomes important for the serviceprovider to be able to integrate that with theexisting systems. The complexity of this hasstopped many companies from moving to thistechnology even when there is a business caseto do so.40 Issue 2006

Connectingthe unconnectedby 2015...Connecting the unconnected by 2015 was one ofthe key challenges embraced by world leadersat the World Summit on the Information Society(WSIS).It is a major task, but one that can be achieved if weall contribute our unique expertise and resources.Together, governments, the private sector, civilsociety and international organizations can usethe benefits of information and communicationtechnologies to improve health and education,boost economic opportunity and enhance culturaland linguistic diversity.Join the growing number of organizations thathave become partners to Connect the World, aglobal initiative launched by the InternationalTelecommunication Union and other committedstakeholders.Dr Tarek Kamel, Minister for Communicationsand Information Technology, Egypt www.itu.int/partnersCONNECTTHE WORLDIssue 2006 41

October 2 nd to 5 thThe most qualified Telecom & ITevent in Latin AmericaTECNOLOGIATo sponsor Futurecom, please access negocios@futurecom.com.br42 Issue 2006To register for the International Seminar, please access www.futurecom.com.br/inscricoes

IP TelephonyThus, it is a compelling but non-financial businessargument that will pull IPT into enterprisecompanies in some sort of magnitude – and Iuse ʻpullʼ rather than ʻpushʼ because enterpriseswill only see the benefit if they lookcarefully at the business case rather than justbelieve in the hype.The IPT message, then, is evolving to one focusedon improved functionality, efficiencyand integration, with cost being driven out asa result of these factors, rather than being thejustification for IPT in its own right. Enablingtrue hot-desking and improved customer servicethrough integration of calls and computersare two of the common examples cited. Thesebring business benefits, but IPT will ultimatelyreduce costs, whether through the reduced costof employee moves, adds and changes, or thecost of delivering a certain level of customerservice.While more and more enterprise customers areseeing the upside of IPT through focusing onthese user benefits, they must also be aware,based on user experience, that each new technologycomes with a downside. Traditionalvoice remains exceptionally reliable, havinghad 100 or so years of monopoly state-sponsoredsupport in almost every country. Thesecombined regional networks form a tremendouslystrong and dense voice network designedspecifically for the job.Despite technological advances, running voicetraffic over IP is not just a case of swappingover your phones. To run voice traffic reliablyon an MPLS, Multi-protocol Label Switching,network, it must be able to configure allof the necessary queuing and traffic prioritisationon the customer premise equipment, CPE,devices, as well as configuring prioritisedbandwidth in the core itself. The big factorsaffecting voice performance across the IP networkare the compression and decompression,CODEC, unit used to compress the voice trafficitself, and the network latency/jitter performance.This is not just important at the time ofimplementation - the network must be carefullymonitored to ensure that these parametersremain acceptable over time.However, these technical problems can be, andare being, solved. The carriersʼ regional MPLSnetworks are technically capable, while globalVNOs are connecting these networks and providingClass of Service re-marking, consistentQuality of Service scoring, and global SLAs,service level agreements, to connect the carriersand provide a harmonised service to enterprises.This is an important role as, unlike thegovernment-controlled voice networks, globalisationvia collaboration is not somethingthe carriers, acting in a competitive environment,are renowned for. Meanwhile, enforcedglobal standards are highly unlikely in a marketplacethat is already scrambling not for thenext technology innovation, but for the oneafter the one after that.The good news for enterprises is that it is thenext IPT innovation that will deliver the realcost savings, and the even better news is thatit is already well advanced. The bad news, Iguess you knew it was coming, is that, asusual, companies are protecting their technology-dependentrevenues as they try to recoupmassive financial outlays on the last round oftechnology. However, this time it is not thewireline carriers but the mobile operators andtheir networks.This is because IP connectivity to mobile providerswill be fundamental in creating the costsavings that the majority of enterprises willneed to see before making the leap to IPT. Thereason is this - 70 per cent of enterprisesʼ analoguevoice calls are to company mobiles, and45 per cent of that, or just over 30 per centof all analogue calls, are to mobiles carried bypeople sitting in offices. If offices can connectthese mobiles to the IP network, eliminatingthe voice-minute charges, the user companieswill obtain very big savings. What is more,when you factor in the cost of the mobileto-mobileconversations that are taking placewithin the enterprisesʼ offices, you can doublethat already very big saving. This is the singlemost persuasive reason for enterprises toswitch to IPT.“Traditional voice remains exceptionally reliable, having had100 or so years of monopoly state-sponsored support in almostevery country. These combined regional networks forma tremendously strong and dense voice network designedspecifically for the job.”Issue 2006 43

IP Telephony“Africa is responding more swiftly to broadband, implementingit faster than it has ever done with any technology sincecolonial days when a broadcast network was regarded as essentialto the well-being of the African countries’ occupiers.”It is happening now. Hybrid GSM/WiFi phoneslike the Nokia 6136 have this sort of functionalitythat will eventually lead to a single phonenumber that can be reached anywhere usingGSM out of the office and wireless connectionto IP in the office and at hotspots. However, themobile operators do not like this threat to theirnetworks, to their earnings, and are not goingto give up without a fight. However, whateverthey do will only delay the inevitable as hybridphones become price competitive and theROI for mobile over IP becomes compellingfor enterprises.So when the tide comes in, where does thisleave everyone - the enterprises, carriers, bothmobile and fixed, and the VNOs?Most enterprises will not want to train teamsof IT staff at great cost, as this will reduce thesavings that are forefront in driving the move toIPT. Nevertheless, this will continue to happenas technology moves on and the next round ofskill upgrading takes place. Carriers will continueto invest in technologies, infrastructureand assets as they compete for their slice ofthe globe along their chosen technology roadmap,investing their shareholdersʼ money andsweating their assets to get it back.Meanwhile, VNOs will continue to sit betweenthe carriers and enterprises, understandingcustomer needs and assisting them in selecting,integrating, implementing and managingthe technologies that suit their business requirements.The mobile space remains as fragmented asfixed line - many operators have evolved fromthe domestic fixed-line carriers so their footprintsare usually limited to their ʻhomeʼ country.Yes, there is some consolidation throughthe M&A, merger and acquisition, activity ofthe big players, but in many cases this amountsto little more than a marketing agreement.Again, just as in the fixed-line space, thereis a huge challenge for global enterprises, fororganisations that want to take advantage offixed-mobile convergence but operate in manycountries. Again, the VNO approach offers ananswer to this.A service provider defines a solution ratherthan sells a device. As mobile over IP becomesa very real proposition for enterprises, the potentialfor cost savings and business value willbe found and banked, but it will be in the proactivemanagement of multiple technologiesand carriers, for IPT and beyond, that enterprisesreally see, rather than hear, the difference.Connect-World iscelebrating its 10th yearanniversaryThrough the years, Connect-World’s authors told of the riseof mobile, of fibre, of wirelessand of broadband; they told ofthe dot.com meltdown, ofdigital inclusion and convergence,of standards and breakthroughs,the rise of IP andthe fall of switching and of theregulatory turnaround.In every issue of Connect-Worldheads of state, ministers andregulators, heads ofinternational institutions andleaders of industry speak ofwhat the ICT revolution, as ithappens, means to the peoplein their regions of the world.www.connect-world.com44 Issue 2006

IP Telephonytic PSTN numbers and, at times, to certaincountries as well, are now billed at a flat rateby ISPs. Network-less VoIP providers includededicated start-up companies (e.g. Vonage andSkype) and several major Internet portals thathave recently added VoIP to their offerings.Although, since they do not control the infrastructuresthey use, the VoIP providers are unableto guarantee consistent quality of service.Nevertheless, they have designed catchy userinterfaces and well-integrated service suites.Their services are presence-enabled - userscan tell which of their contacts are availableon-line - and they include advanced featuressuch as unified voice mail, ring-tones, Webcamvideo and virtual phone numbers.Network-less VoIP players are actively seekingalliances with manufacturersto integrate theirsoft-phone software directlyinto user devices. Asoftware-enabled devicecould be a USB, universalserial bus, phone, a WiFisingle mode handset, adual mode mobile handset,a laptop, or even aplain USB key. It is worthremembering that whilethe VoIP pioneersʼ businessmodel mirrors thecarriersʼ, portals derivethe bulk of their revenuesfrom advertising, e-commerceand affiliation programmes;they mainly usecommunications applicationsas audience-farmingtools.It is true that the migrationof traditional PSTNtraffic to VoIP is influencingthe voice revenuesof the incumbent wirelinecarriers. Not onlyare they charging lessfor telephony services, but they stand to losecustomers to the multiplay offerings of theirbroadband competitors which take advantageof local loop unbundling, LLU. Cost-effectiveVoIP-enabled multiplay packages, offeredby both the incumbents and their broadbandchallengers, have enjoyed strong commercialmomentum. To complicate the matter, the network-lessVoIP players, start-ups and portalsalike, have come up with their own competitiveofferings.Wireline operators are not the only ones affectedby VoIP. Wireless carriers are concernedsince cheap fixed VoIP, and the future adoptionof dual phones by consumers and professionals,could drive them to change the businessmodels that led them to charge a premium foroutgoing mobile calls. Voice is still the breadand butter of mobile operators with 80 per centof their revenues derived from voice. NomadicVoIP services over WiFi hot-spots, when readyfor mass-market adoption in a few years aftersignificant technical and commercial barriersare lifted, will compete for the calls placed athome over mobile handsets (40-60 per cent ofmobile calls are made from home) and forintra-campus business calls.The FT Group has proactively addressed thesechallenges as an opportunity to expand itscustomer-centric offering and is already theleading hot spot provider in some of its majormarkets.“Today, many service providers are implementing, or atleast considering, advanced IMS/SIP networkarchitectures to support fully convergent multimediaapplications.”Naturally, IP communications will keep improving.High-fidelity 3D voice (a stereo-liketechnology that lets one distinguish betweenspeakers in an audio conference via audibleclues) is technically feasible today. Dualphones and intelligent USB keys (pen drives)will give access to IP voice and data applicationsover any public and private WiFi hotspot.Video-enabled eyeglasses and car windshieldscould allow travellers to read messages, watchvideo content and place video calls. Today usersalready transfer VoIP calls from their laptopto their sound systems and could, likewise,deflect video calls to their TV sets in the future.All Internet service and social networking siteswill be endowed with communications applications.Pervasive presence-based networks willalert you should friends stroll nearby. Ratherthan a stand-alone application, telephony willbecome just another feature of a personal servicesuite, a ʻwidgetʼ in a personal home page.Leading-edge communications services willbe accessible over any device since they willbe delivered across unified Internet ProtocolMultimedia Subsystem/Session Initiation Protocol,IMS/SIP, network architectures. Today,many service providers are implementing, orat least considering, advancedIMS/SIP networkarchitectures to supportfully convergent multimediaapplications. They areinvestigating technologyadvancements (includinghigh-fidelity spatialsound), and integratingtheir services with thoseof Internet partnersʼ tocreate comprehensive offeringsfor consumers.The offer of a wide rangeof managed voice anddata services to businesses,including dual phoneand multi-access networklaptop cards, will becomeincreasingly common.At the end of the day,VoIP poses serious regulatorychallenges. Now thattheir traditional businessmodels are attacked bynetwork-less providers,what new business modelsshould they embraceto be able to keep operatingtheir infrastructures and investing for thefuture (e.g. IMS/SIP, wireless broadband, fibreto the home)? Therefore, as VoIP scales beyonda niche offering to become a mainstay carriergrade replacement for the PSTN, an essentialquestion is how regulators can keep fosteringthe service innovations, which will be the keyto the customersʼ best interests. Naturally, IP communications will keep improving. Highfidelity3D voice (a stereo-like technology that lets onedistinguish between speakers in an audio conference viaaudible clues) is technically feasible today.46 Issue 2006

Issue 2006 47

IP NetworksNetworks in the age of IPby Mauro Righetti, CEO and board member, ItaltelTo remain competitive, operators throughout the world are upgrading their infrastructures tointegrated IP-based networks for voice and data. These next generation networks, NGN, letthem offer a wide range of enhanced voice- and data-based features, including VoIP, data,video, video-telephony and broadcast TV, among others. It also gives operators the flexibilityto provide business customers with a range of managed and hosted services, such as IP-PBXswitchboards, which offer fixed and wireless convergence to facilitate company communications.Mauro Righetti is the CEO of Italtel and a member of its board. Previously, he took part in the creation of Smart Venture Partners, aventure capital firm active in the hi-tech sector. With the Oracle group, he founded and managed Oracle Italia, was Vice President ofOracle South Europe, Chairman of the Corporation Management Advisory Board, and Chairman and Member of the board of NetworkComputer Inc. – a NASDAQ-listed member of the group. Mr Righetti started his career with Olivetti, where he assumed roles of increasingresponsibility until his appointment as industrial area manager and member of the management committee.A promising scenarioThe development of broadband IP technologiesintroduces the possibility of new serviceswith multimedia content, which offers, anddrives, the opportunity to bring about a majortransformation of the architecture of telecommunicationsnetworks. In this regard, theleading operators in the sector in the Europeanregion are making investments in upgradingthe network, from an infrastructure geared totransporting voice, where data is an add-on, toan integrated infrastructure based on IP technologyfor voice, video, data, video-telephony,broadcast TV, and other multimedia servicesthat will emerge in the future. We are talkingabout Next Generation Networks, NGN, ormulti-service networks, which enable the convergenceof all types of communication to asingle network infrastructure based on the IPprotocol. The convergence of video, voice anddata communication services to a single infrastructurereduces costs, simplifies installationand support, and allows operators to offer new,more flexible service models known as managedand hosted services.The trend of evolution towards a Voice overIP, VoIP, infrastructure and application solutionsis now unstoppable; it is aimed at allbusinesses that have widely-distributed officesand which, consequently, need a voice communicationssystem that is efficient, economicalto manage, scalable, and open to IT standardsfor development, customisation and integrationwith new applications. VoIP thereforeapplies to all areas of the market, from consumersto small enterprises, from companiesto public administrations. The Yankee Groupexpects the aggregate market for next generationnetworks infrastructure and services togrow worldwide from €3.5 billion to €6.7billion, resulting in a 24 per cent compoundannual growth rate (CAGR), between 2005and 2008. More specifically, the prospects forgrowth within EMEA for NGN and next generationservices, NGS, are very strong: capitalexpenditures will show a 22 per cent CAGR,growing from €833 million to €1.5 billion.VoIP: new ways of working and interactingThe advantages deriving from this are many,both from an organizational and an economicpoint of view. VoIP has the power to change- radically change - ways of working and waysof interacting with colleagues, external suppliersand customers. The convergence of thetelephone network with the Internet/intranetwill bring unexpected consequences for personalbehaviour in areas such as peopleʼs mobilityand their way of interacting with eachother. There is another form of integration aswell - the integration of advanced telephonyservices with software applications that wereonce associated with computers.VoIP also has the power to eliminate completelythe costs of ʻon-netʼ traffic, that is trafficconsisting of internal calls. At the sametime, VoIP can greatly reduce managementcosts, since the activation or reconfigurationof a userʼs service is managed centrally from adigital dashboard. In addition to these imme-48 Issue 2006

IP Networksdiate benefits resulting from VoIP, it reducesthe entry costs of advanced communicationsservices, such as video communication, to thepoint where any user device can be equippedwith these services according to their requirements.This avoids unplanned investmentsthat grow over time. Indeed, these servicesdo not require special ad-hoc investments ininfrastructure and terminals, since they are, infact, an integral part of the multimedia solutionover IP. VoIP lends itself very well to theimplementation of solutions like IP contactcentres, which integrate the companyʼs multimediacommunication system with a CustomerRelationship Management, CRM, system,resulting in considerable benefits in terms offront-end service.The intelligent communications stationA single company network, both local andinter-office, can connect personalcomputers, IP telephones and fax machineswith, nowadays, almost vanishingfunctional differences. In fact,with VoIP a telephone is no longer justa telephone, but is, rather, becomingan intelligent general communicationstation that can integrate applicationssuch as email, the company directory,unified messaging and, for specificsegments, even custom-developedvertical applications. What is newhere is the possibility of choosingwhich terminal, IP phone or PC, toassign to an individual user based ontheir specific requirements. Whateverthe choice, it will always provide accessto multimedia communication. In the caseof VoIP, the service will include a ʻpresenceʼindicator, which enables the user to verify thepresence of other people, of each individual,on the network. This will indicate each userʼsavailability to receive messages, to receivetelephone calls, or even his ʻdo not disturbʼstatus if heʼs busy performing other operationswith his terminal (PC, PDA, telephone). VoIPnaturally goes together with the Internet andwill become an integral part of future multimediacommunications.Convergence for businessWithin an enterprise, VoIP enables the functioningof fixed/mobile convergence based onthe IP protocol. For example, it would be ofgreat use to companies, to governments, thepublic administrations, to be able to integratecontact centres in their telecommunicationsinfrastructures. This would increase their capacityto provide customer or public servicesvia innovative portals that support applicationssuch as unified messaging, click-to-dialand videoconferencing.Companies with widely distributed offices,with a great many phone lines and with significantamounts of traffic on the networks theyuse, will have quicker returns if they alreadyhave an IP-based data network.Large companies typically have telephonecosts that significantly boost operating expenses;they also find themselves investing totackle their demanding and increasingly complexinfrastructural problems. Large publicand private organisations are the main beneficiariesof solutions that make use of telephonyover IP because of the ease of recovery thesesystems provide, their efficiency and low costand, above all, because of their need to rationalisethe channels of communication essentialto facilitate teamwork. Together with this,large companies often have an existing infrastructurethat makes it possible to implement apainless changeover to VoIP technologies. Theexisting infrastructure offers a point of entrythat facilitates the transition to the new systemand takes the maximum advantage of the companyʼsown, often-under-utilised, local andinter-office network. Nevertheless, to decideupon the sort of communications system that acompany requires, it is not enough to considerthe level of earnings or the number of employees;it is the telephone cost per employee thatshould drive the decision. A small market researchcompany that makes extensive use oftelephony, for example, could have a greaterneed to switch to VoIP than a manufacturingcompany that has greater revenues and hasmore employees.Carrier revolution - hosted and managedsolutionsAnother important and innovative feature forVoIP users is that operators and service providerscan offer remotely managed solutions thatdeliver cutting-edge communications serviceswithout the users having to deal with all theassociated technological complexities. Thisis a major step forward compared to the usualalternatives of contracting a service companyor tackling the technology barrier on its own.Either alternative can slow down the introductionof innovative services. Using the in-housestaff to tackle new technologies and introducethe new services can expose the company tounpredictable, unquantifiable or, even, unmanageablerisks.With managed services, the service providersbecome outsourcers, in the sense that they supplytheir users, on the one hand, with equipmentand, on the other hand, with staff formanaging the infrastructure. In other words,we are seeing the growth of a managed VoIPmodel of outsourcing. This is a turnkey formulain which the operator not only offers thevoice transport service and maintains the telecommunicationsexchange, but also providesthe infrastructure for the service, eliminating,for the most part, investments that otherwisewould have had to have been made bythe user. There are essentially twoways that service providers supplymanaged VoIP services. The first ishosted IP PBX (switchboard) equipmentdedicated to the company butphysically located and managed withinthe service providerʼs network. Thesecond option is managed IP PBX: theequipment is installed at the clientʼssite and remotely managed by theservice provider. Operators providingthese services, introducing thesemanagement models, can charge forthese services and, in this way, buildrevenues to compensate for the lossesresulting from the reduction in voicetraffic brought by VoIP. By offering adiversified portfolio of services on a fee basis,such as management of voice service, voicemail,and unified messaging, service providerscan build their revenues while increasingoverall customer loyalty. Issue 2006 49

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Networks and Regional DevelopmentICT and hope in Kenyaby Dr Kai Uwe Wulff, Managing Director,Kenya Data NetworksKenyaʼs economic development will depend upon the introduction of an extensive broadbandinfrastructure throughout the country, especially in rural areas. The liberalization of Kenyaʼstelecommunication sector, and the introduction of competition, made the build out of wiredand wireless networks throughout the country economically viable. These networks will stimulatethe development of an ICT support service sector, encourage advanced services for outsourcing,such as call-centres, and motivate the migration of some production and, eventually,R&D to rural areas.Dr Kai Uwe Wulff is the Managing Director of Kenya Data Networks where he has overseen the growth of KDNʼs infrastructure, includingthe roll out of WiMAX and fibre optics. Prior to Kenya Data Networks, he worked with the African Safari Club Group of companies. There,he served as the Marketing Director & CIO until appointed the Managing Director of the African Safari Club, African Safari Airways.Previously, Dr Wulff owned and worked with WULFF EDV Systemhaus AG in Germany, a solution provider for networks, hardware andsoftware, business/management consulting and IT audits.Kai Uwe Wulff is a Doctor in Economic Science, a licensed commercial pilot and a trained officer of the German Air Force.“Whether your end users are on-site, at homeor mobile, they expect instant access to resource”;“The performance of your wide areanetwork, WAN, is essential to your staff andcompanyʼs continued success”; “Your networkis mission-critical”; “The reliability, speed ofaccess and stability of your network must betaken for granted.” Although they sound mundane,these statements sounded far-fetched afew years ago in Kenya. However the liberalizationof the telecommunication sector inKenya and subsequent registration of privatecompanies to offer networking solutions hasmade all this possible.Despite all the positive steps taken in the telecommunicationsector in Kenya, there is stilla great need to increase the access to facilitiesin the rural areas of Kenya. Although thecountryʼs rural areas have 80 per cent of theKenyan population, the infrastructure in theseregions remains either inadequate or non-existent.This has led to a great disparity in the servicesthat you can expect in rural Kenya andsince information is power, this has furthercontributed to the great financial gap betweenthe ʻurbanitesʼ and the ʻrural folksʼ.Infrastructure in KenyaThe underdevelopment of Kenyaʼs rural infrastructurecan be traced back to the long yearsof state control and ownership of economicactivities. Still, even after the entrance of theprivate companies in the sector the concentrationof telecommunications activity in theurban centres has continued. The return on investmentin Nairobi and Mombasa is definitelyfaster than in a remote town like Kakuma. Thisis further aggravated by the countryʼs regulatorystructure, which stipulates a fee structurebased upon the number of transmitters in thenetwork and not a flat fee. This penalizes theoperators that have a wider reach. Therefore,without proper direction or incentives from theregulator, the infrastructure builders will continueto ignore rural Kenya.“The return on investment inNairobi and Mombasa is definitelyfaster than in a remotetown like Kakuma.”Kenyaʼs private network operators all startedproviding service by setting up microwavebase stations. The main reason for using microwavewas the speed with which a wirelessnetwork could be installed. As soon as a transmitteris set up, an operator can start servingclients in any town within its reach. With severalinterconnected transmitters, an operatorcan start linking client branch networks andany other services that may be required. However,as the clientele increases, the need formore capacity makes additional radio frequenciesa necessity.To overcome the above-mentioned problems,and that of interference that starts manifestingitself given the great number of microwave radiosinstalled on the roofs of users, operatorshave begun to deployed fibre optics. This willsupplement the copper network that is providedby the incumbent (Telkom Kenya) andis available in most urban centres. Due to thegrowth of networking needs in Kenya, the nationwidemicrowave backbone that is providedby the incumbent, Kenya Data Networks andthe GSM operators, is no longer sufficient.That is why a countrywide fibre optics backboneis in the process of being deployed. Thiswill be to the Kenyan economy in the 21st centurywhat the Kenya-Uganda Railway was inthe 20th century.With heightened expectations, customers arenow demanding features from their networkproviders that were not possible a few yearsback. Tomorrowʼs competitive network operatorwill have a wide range of services to offer.1. Service Level Agreement (SLA) – Giventhe competition, some operators will soonbe offering SLAs that call for 99.99 per centnetwork uptime; other network operators arealready offering a 99.9 per cent network uptimeSLA;2. Clear troubleshooting/escalation procedure– No one in the world can have a 100 per centtrouble-free solution. In the event of a problem,clients want to know that their problem isIssue 2006 51

Networks and Regional Development“Kenya has had a significantimprovement in its infrastructure,and this has contributedto the fastest growth inaccess to the Internet andtelephone services in theregion.”being addressed and how to get in touch withtheir service delivery managers and accountmanagers;3. Clear and transparent pricing – There shouldbe a simplified process for WAN pricing. Thismeans that the clients should view pricing as aclear and transparent monthly operation for anagreed level of services (SLA);4. Change Control Procedures – A comprehensivechange control process imposes a necessarydegree of discipline on the way technologyis allowed to grow and develop within anorganization. Given the necessary emphasison security when delivering WAN solutions, itis obvious that any uncontrolled changes to afirmʼs WAN infrastructure could lead to potentialsecurity issues; and5. Security – Todayʼs networks are designedin a highly structured way. To reduce the complexityevery layer is built upon the precedinglayer in order to meet the demands of clientsthat are becoming increasingly aware of theirsecurity requirements.InfrastructureThere have been several developments in asfar as infrastructure in the region is concerned.Kenya has had a significant improvement inits infrastructure, and this has contributed tothe fastest growth in access to the Internet andtelephone services in the region. Several organizationshave been licensed as Local LoopOperators with a mandate to provide affordabletelephone services to Kenyans. This ismeant to further improve service levels andcompetitiveness in this sector.However, judging from what has happenedwith the network operators, it would be safeto assume that the majority of these companieswill concentrate on the urban centres. Itis for this reason that we are now embarkingon an ambitious project to reach 80 per cent ofKenyans with affordable data, video and telephoneservices by the year 2008. This will beachieved by means of the following infrastructureprojects:1. A countrywide fibre optics network is in theprocess of being deployed;2. The Eastern Africa Submarine Cable System,EASSy, will bring international access,but its interconnection of the countries inthe region will be more important. Currentlya telephone call from Kenya to England ischeaper than one to the Democratic Republicof Congo. The system aims to change thisanomaly;3. A seamless WiFi network is being deployingin Nairobi and later to the rest of the country.This will not be used not only for Internetaccess, but also to provide access to local andregional content; and4. WiMAX - Kenya already has the largestWiMAX network in Africa. Given local conditions,this is an ideal network for last mileconnectivity.These projects are meant to build capacity notonly in the urban centres, but also in the ruralareas. This will make all the projects beingpushed by the government and, as well, bysome non-governmental organizations, possible.Projects, such as the much talked aboute Government project that is meant to take servicesclose to the people, will not be possiblewithout a good infrastructure. The eLearningprojects undertaken by educational institutionsare among the many tasks that will rely heavilyupon the availability of a good networksystem.There are some impediments in Kenya, andindeed in Africa, that have contributed to theslow growth of its telecommunication infrastructure.Some of the obstacles are:1. Wrong attitude/lack of interest from equipmentmanufacturers - the attitude that somemanufacturers have is that Africa needs productsthat are almost obsolete in the rest of theworld; this is stifling progress. The commentsthat we get are ʻit has worked in Europeʼ, ʻitis affordableʼ etc. They do not question if it isthe best technology for the region. They needto understand that the disposable income fortelecommunication services in Africa is lowerthan that in Europe, but the demand for qualityis not less. Africa has unique needs, but companiesthat take time to acquaint themselveswith the continentʼs problems can meet them- and make a profit;2. Availability of electricity – In rural Kenya,the percentage of households with electricityis only about two per cent. Going back to theprevious point, manufacturers of equipmentshould, for example, think of offering equipmentthat can use solar power or rechargeablebatteries; and3. Licence fees – The frequency fees leviedon network operators in the region by the governmentsare prohibitively high and, since thecost is then passed on to the end users, the unnecessarilyhigh cost of connectivity results inlow service uptake.A cycle of growthWhat the region needs is a paradigm shift;instead of concentrating on the cost of infrastructure,the focus should on the services thatcan be provided. The question that should beat the top of the ICT expertsʼ minds should be:“What can we do with the links to improveour business?” not, “How much does the linkcost?”As long as the state of telecommunication infrastructureremains poor, the growth of theregionʼs economies will continue to be slow atbest. Development of ICT can stimulate fastergrowth in the following ways:1. Appropriate, affordable, technologies canstimulate service uptake and usage;2. With increased usage, and access to informationand learning, the knowledge neededto participate effectively and efficiently in theeconomy can be generated;3. The growth of ICT usage will stimulate thegrowth of a low-level local service industry tosupport it. This, in turn can leads to the growthof small industries;4. The growth of ICT and the development ofthe communications infrastructure will alsomake possible the development of somewhathigher, medium-level, ICT-intensive, servicessuch as call centres;5. Production Shift – medium level supportwill lead to the migration of some productionto locations in rural areas;6. R&D - after production is established, thenext step will be the establishment of researchand development in these areas;7. Top Level support - R7D will necessitate thedevelopment of local top level support; and8. Outsourcing into rural areas - eventuallythere will be outsourcing to the rural areas. “Africa has unique needs,but companies that take timeto acquaint themselves withthe continent’s problemscan meet them - and make aprofit.”52 Issue 2006

Issue 2006 53

Arab Telecommunications MarketsDiversity and growthin the Arab telecom marketsby Jawad J. Abbassi, General Manager, Arab Advisors Group,a member of the Arab Jordan Investment Bank GroupTelecommunications penetration in the Arab region is surprisingly high. In eight of the 16countries studied, total penetration, because of users with multiple lines, is greater than 100per cent; and in only two is it less than 50 per cent. Although high penetration is typically associatedwith competition, the UAE and Qatar, where total telecom penetration exceeds 200per cent, are still monopolies. ARPUs, however, vary widely from US$9 to US$69, dependingupon rates, income and usage.Jawad J. Abbassi is the General Manager of the Arab Advisors Group, a member of the Arab Jordan Investment Bank Group. Beforefounding Arab Advisors Group, Mr Abbassi was a Senior Telecommunications and Technology Consultant at the Economist IntelligenceUnit (EIU) in Boston, USA. There Mr Abbassi produced comprehensive research reports on, among other things, the markets for Africanwireless, Middle East communications and Egyptian communications. Working as a EUI Consultant to the World Bank, he quantified theʻinformation economy infrastructureʼ in Morocco, Egypt, Jordan, Saudi Arabia and the United Arab Emirates. Previously, Mr Abbassiworked as a Corporate Accounts Manager for Jordanʼs leading Internet service provider (NETS), worked for an Apple Computersʼ dealership,and was a weekly Information Technology columnist for Jordanʼs leading English weekly. Mr Abbassi is a frequent guest speaker atconferences and seminars related to technology and communications in the Arab World.Mr Abbassi received a BSc in Engineering from the American University in Cairo (Egypt - 1993) and his MSc in Information Systems fromthe London School of Economics (United Kingdom - 1998).The Arab telecommunications landscape isstrikingly diverse. The regional diversitystems from the underlying diversity of theArab countries themselves. The differences inincome levels, demographic makeup and marketregulatory structures translate into verydifferent telecommunications markets. Whilea picture may be better than a thousand words,numbers are sometimes better than both!Every year, we calculate a measure called theTotal Country Connectivity Measure, TCCM.We calculate the TCCM by adding the householdfixed line penetration, cellular penetration,and Internet usersʼ penetration rates ineach country. The household fixed line penetrationis measured by dividing the residentialfixed lines by the number of households ineach country. The TCCM shows the extent of“If a country has a TCCMmeasure of 60 per cent, thismeans that at least 40 percent of the population arenot users of any of the threeservices constituting themeasure.”connectivity of individuals in a certain countrywhether via fixed lines, cellular lines and/orInternet. Of course, there will be an overlapsince many individuals will be using thesethree communications technologies at thesame time. However, the measure still yieldsan accurate and informative picture on the levelof ICT services penetration in each country.For example, if a country has a TCCM measureof 60 per cent, this means that at least 40per cent of the population are not users of anyof the three services constituting the measure.While a TCCM score of more than 100 percent is very positive, it does not mean that allthe population uses the services due to overlapof usageExhibit 1 below shows the results of theTCCM 2005. The 2005 results revealed thatQatar, Bahrain, UAE - the United Arab Emirates,Kuwait, Saudi Arabia and Oman - theGCC, Gulf Cooperation Council, countries- lead the Arab countries in TCCM scores.Lebanon, Jordan, Tunisia, Syria, Algeria,Exhibit 1: Arab Countriesʼ Total Country Connectivity Measure 200554 Issue 2006

Arab Telecommunications MarketsEgypt, Palestine and Morocco follow. Yemenand Sudan had the lowest ranks on the totalconnectivity measure.Comparing the TCCM scores of 2004 (see Exhibit2) with TCCM 2005, reveals the progressfor the year. Algeria, Yemen, Saudi Arabia andJordan showed significant improvement intheir TCCM 2005 score compared to that of2004. In 2004, only six countries had a TCCMscore of more than 100 per cent, a number thatrose to eight in 2005.The cellular boom in most Arab countries isthe main driver of total connectivity growth.Still, the cellular boom numbers should beclosely examined. The Arab cellular marketsare predominantly prepaid markets. In countrieslike Egypt and Morocco, prepaid usageis very much lower than post-paid usage, anda substantial number of prepaid GSM usersuse their cell phones mostly to receive calls or,even, as pagers. Indeed, according to our newsurvey of 700 GSM users in Morocco, some80 per cent of Moroccan GSM users are stillusing payphone services for national calls. Theaverage monthly minutes of usage for prepaidGSM users in Morocco is less than 20 minutescompared to more than 350 minutes forGSM post-paid users. As Morocco prepares toaward new 3G cellular licences in 2006, theupcoming cellular operators, and the GSM incumbents,must address the low usage levelsof prepaid GSM users in the country to enhancethe prospects of success.Revenues and ARPUs are also widely different.Public switched telephone network, PSTN,monthly ARPUs in Arab countries range froma low of US$10 to a high of US$77. Cellularmonthly ARPUs range from US$9 to US$69.The disparity stems from differences in ratesand usage levels.Interestingly, the top ranking countries in theTCCM are the least liberalized markets. WhileBahrain has indeed progressed far in an ambitiousfull liberalization of the market, UAE andQatar remain monopoly markets. This revealsa small paradox; in the Arab World, monopolymarkets are ahead of competitive markets interms of adoption of telecom services. Yet theparadox is easily explained: competition mayresolve a good many of the supply bottlenecks,but it cannot fully transform the underlyingdemand situation. High poverty and illiteracylevels in many Arab countries limit the potentialdemand for telecom services. While in thesmall gulf markets of Bahrain, UAE and Qatar,a slew of factors enhance demand regardless ofthe monopoly nature of the market. These includehigh income levels, elevated educationalstandards and the presence of large numbers ofworking age expatriates.Despite the regionʼs pockets with monopolymarkets, liberalization is progressing in manyArab countries. Arab fixed voice markets areExhibit 3: Current Communications Marketsʼ Regulatory FrameworksCountry PSTN Cellular InternetAlgeria Duopoly Competitive CompetitiveBahrain Competitive Duopoly CompetitiveEgypt Monopoly (1) Duopoly (2) CompetitiveJordan Competitive Competitive CompetitiveKuwait Monopoly Duopoly CompetitiveLebanon Monopoly Duopoly CompetitiveMorocco Duopoly (3) Duopoly (4) CompetitiveOman Monopoly Duopoly MonopolyPalestine Monopoly Competitive (5) CompetitiveQatar Monopoly Monopoly MonopolySaudi Arabia Monopoly (6) Competitive (7) CompetitiveSudan Duopoly Duopoly CompetitiveSyria Monopoly Controlled Duopoly CompetitiveTunisia Monopoly Duopoly CompetitiveUAE Monopoly (8) Monopoly (8) Monopoly (8)Yemen Monopoly Competitive Duopoly(1) On December 31, 2005, Telecom Egyptʼs monopoly over international voice and data services ended.(2) Third mobile operator expected by beginning of 2007.(3) Meditel already launched its first fixed line packages in May 2006. A third licence was granted to Maroc Connect,which has not started its operations yet.(4) Ongoing 3G licence tender launched in May 2, 2006.(5) Paltel and Jawwal face illegal competition from Israeli operators.(6) New licence will be granted by end of 2006.(7) One or more new cellular licences will be granted by end of 2006.(8) The new telecom operator is already licensed and will kick start its operations in mid of this year, starting with cellularservices to be followed by fixed line and Internet services.Source: Arab Advisors Groupmoving towards a more competitive era. ThePSTN market remains a monopoly in 11 outof 16 Arab countries. Five countries, namelyAlgeria, Bahrain, Jordan, Morocco and Sudan;have licensed new operators; these started operationsin 2005 and early 2006. During 2006,fixed voice services competition is expected toarrive in the markets of Egypt, Saudi Arabiaand UAE.The Qatari cellular market is the only monopolymarket out of 16 cellular markets coveredin TCCM 2005. In the UAE, the new licensedoperator ʻduʼ should start operations in 2006.Of the markets covered in the exhibit below,nine Arab markets have cellular duopolies.Five countries have full competition in cellularservices, namely Algeria, Jordan, SaudiArabia, Yemen and Palestine, whose nationaloperator faces unlicensed competition from Israelioperators. On the Internet services front,Qatar, Oman and the UAE are the only Arabcountries that still have monopoly Internetmarkets. Oman has plans for liberalization andthe UAE will have competition when the newsecond operator launches its service.Far from being similar - uniform - markets,the Arab Telecom markets present a story ofdiversity and heterogeneity. These markets offermassive growth potential for operators andvendors alike. Targeting the regional potentialrequires a deep understanding of every countryʼsspecific conditions. Exhibit 2: Arab Countriesʼ Total Country Connectivity Measure 2004Issue 2006 55

29 November – 1 December 2006, SingaporeSpice it upAssociate sponsor:Organised by:Maximise profit from voice• Its no longer about the technology… it’s about the market for VOICE!• Optimizing network expenditures and driving commercial profitability ofvoice service offerings while also addressing customer requirements forquality, security and price.• Defining the opportunities for voice, from revenue recognition, to marketshare growth, to customer management in the shifting mix of voiceminutes, voice over IP, mobility and bundled service offerings.Response form Fax back to (65) 6226 3264Exhibition / Sponsorship I wish to sponsor and leverage on the year-round marketing campaign. Please contact me to discuss. I wish to attend the conference. Please send me the programme when available. Please find attached topic synopsis for consideration as a speakerMedia partner:Name: _________________________________________________________________________________________________________________________Company: ______________________________________________________________________________________________________________________Job Title : _____________________________________________________________________________________________________________________Address: _____________________________________________________________________________________________________________________Tel: ___________________________ Fax: _____________________________ Email: _______________________________________________________For more information, please call on +65 6322 2700 or visit www.terrapinn.com/2006/voe_sg56 Issue 2006

IMSCreating tomorrow’s communications services todayby Bahaa Moukadam, Vice-President, IP Telephony,Spirent CommunicationsIP Multimedia Subsystem, IMS, a standardised network architecture, facilitates convergencebetween all sorts of fixed and mobile, wired and wireless networks by providing seamless handoversbetween these dissimilar networks. VoIP/SIP, WiFi, WiMAX and cable all come withinthe scope of IMS. IMS offers carriers an easier evolutionary path to newer network technologiesand easier adoption of new applications. Still, since all of the IMS protocols have yet tobe standardised, its adoption may, at times, be somewhat troublesome.Bahaa Moukadam is the Vice-President for IP Telephony at Spirent Communications. Mr Moukadam has more than 18 yearsʼ experience inthe communications test and measurement industry. He has held positions in design engineering, product marketing, marketing, businessdevelopment, and executive management at Hewlett Packard (now Agilent), Wandel & Goltermann Technologies (now Acterna), and TelexComputer Products. Mr Moukadam has written industry articles for internal publications and has spoken at several industry events.He holds a Masterʼs Degree from the University of Kansas and a Bachelorʼs Degree in Engineering from the University of Missouri.IP Multimedia Subsystem, IMS, promises tobecome a standard architectural frameworkfor the rollout and development of convergedcommunications services. As the providersof these services face a global industryshakedown, IMS finds itself sitting squarelyat the core of the next wave of technologicalnetwork transformation. The industry facesdeclining revenues from traditional services,mergers and acquisitions, complexity drivenby network convergence, and an increased focuson the commercial realities that go withit. The benefits that IMS promises are greatlyneeded.An Internet Protocol-based, IP-based, infrastructurewill bring significant changes to thebusiness models of service providersworldwide. In a market whereservice rollout, management andreliability are under increasedscrutiny, IP technology can answermany questions.Against a backdrop of saturatedcustomer bases and squeezed margins, convergencewill permit cheaper access to servicesand an explosion in the variety of revenuegeneratingservices. Nevertheless, the networksneed to be ready. IMS can help ensurethat IP can properly underpin the convergedinfrastructure. It guarantees - in theory at least- a seamless experience and handover betweenfixed-line, cable, mobile and wireless access.Created in early 2005, the goal of IMS was toenable telephone portability across fixed-lineand mobile handsets. Since then, it has grownin scope to incorporate VoIP-based enterprisenetworks, WiFi/ WiMAX and cable.IMS is a series of protocols and interfacespecifications that facilitate standards-basedfixed/mobile, voice/data and voice/videoconvergence. Dozens of specifications influenceIMS architecture - not all of which areyet standards. IMS is in the midst of its owncomplex evolution, and the ambiguity causedby constantly changing protocols hampers thecongruent development and implementationof communications services.“For service providers, network convergencevia IMS provides a significant opportunity forincreasing the average revenue per user.”Network innovation continues to create opportunitiesfor carriers, and IMS equipment ismoving up on the telecommunications shoppinglist. With US$21.6 billion in expectedspending on next-generation voice and IMSequipment by 2009, the forecast is for phenomenalgrowth.The opportunitiesFrom the end userʼs point of view, the advantagesof IMS enabled services are clear. Identityportability across mobile and fixed-linenetworks, centralised voicemail and messaging,and converged services such as virus protectionand file storage make up a compellingraft of new features and services. The ubiquitousavailability of the userʼs personal environmentat the office, in the home and on theroad allows for an enhanced user experienceand higher productivity in our increasingly nomadicsociety.For service providers, network convergencevia IMS provides a significant opportunity forincreasing the average revenue peruser, ARPU. At the same time, itallows them to reduce their operationalexpenses by having a single,converged, IP-based network. Notknowing which services will getsignificant traction with users, theability to deploy chargeable servicesquickly gives service providers an environmentof rapid market-based experimentation.Services that are embraced by users can bescaled quickly, maximising revenues.For network equipment and handset manufacturers,network convergence presents anunprecedented opportunity for a new wave ofnetwork and handset upgrade cycles. The tran-Issue 2006 57

IMS“Implementing IMS is farfrom simple. Prototypingand predicting the effectsof IMS traffic on productionnetworks will be difficult tomanage.”sition to an all IP network will be characterisedby a series of intermediate steps over manyyears. Manufacturers that are able to anticipateand execute in alignment with both the technicaland business challenges of carriers arelikely to reap significant rewards from theseupcoming upgrade cycles. Due to the scale andcomplexity of this transformation, many manufacturerswill be able to benefit only throughpartnering and consolidation.The challengesIMS introduces a host of challenges to equipmentmanufacturers and service providers.IMS is at the intersection of multiple, concurrentlyoccurring convergence trends and ismuch more challenging than previous networkevolutions. These trends include convergencefrom VoIP and PSTN, public switched telephonenetwork, to IP Telephony, Triple Playservices convergence and fixed/mobile convergence.The inherent complexity of IMS - its maze ofstandards, interfaces and protocols - could bea stumbling block for many service providersand carriers migrating to an IMS-based network.The draft standards from numerous independentorganisations could result in a levelof uncertainty and hesitation for some serviceproviders until the standardisation process isclarified.Implementing IMS is far from simple. Prototypingand predicting the effects of IMStraffic on production networks will be difficultto manage. The complex interoperabilityrequirements, such as handshaking, mediaconversion and synchronisation will all haveto be resolved whilst guaranteeing quality ofservice. As a result, it is essential for operatorsto develop a deep technical understandingof the underlying technologies. It will becomeobvious that interoperability testing, performanceand scalability assessment, quality ofexperience, QoE, and service management arenecessary for successful deployment of IMSbasednetworks.Carriers are likely to struggle with organisationaland domain expertise issues in the shortterm. Since IMS by definition crosses both thewireline and the wireless domains, carrierswill have to figure out how to make cross-domainand cross-organisational decisions. Oncecompartmentalised by technology, equipmentand vendor selection, network architecture,service offerings, rollout strategies and servicemanagement approaches will all be inter-relatedby IMS. Some carriers will find it necessaryto re-draw organisational lines while keepingtheir current wireline and wireless networksand businesses operating smoothly - a bigchallenge, to say the least.Simulation and testingFaced with upgrading network equipment toIMS standards, carriers and service providerswill face a new challenge - developing testingprocesses and methodologies to ensureinteroperability, scalability, security and faulttolerance. While network equipment manufacturersbegin to create systems to handleIMS protocols correctly, carriers will need toensure the systems themselves are configuredproperly and provide consistent, integrated,services. Carriers and service providers - andtheir systems integrators - will not be able tosimply plug IMS compatible equipment intotheir networks. Ambiguity in the IMS specificationswill almost certainly guarantee that theequipment will need considerable testing andtuning before deployment, during early trialsand ongoing service management.New equipment being developed by networkequipment manufacturers will support a numberof different fixed and wireless protocols“Service prototyping helpsdiscover where networkproblems could occur andhow each affects the totalservice delivery.”58 Issue 2006

IMS“The application service layer offers value-added features and functions that go beyond thestraightforward connection and integration of heterogeneous networks and devices.”such as SIP, DIAMETER, H.248, IPv6, andthe like. Network equipment, too - includingrouters/switches, cable head ends, gateways,session border controllers, softswitches,DSLAMs, PBXs and end points - will all needto accommodate these protocols. Add to thesethe protocols necessary for 3G networks, theIMS-specific XML Configuration Access Protocol,the Message Session Relay Protocol,plus the payload protocols for VoIP, Internetand multimedia traffic, and you have a serioustesting challenge.For example, with an edge router that handlessession management for Flash movies, comprehensivetesting is required to maintainproper throughput and quality. Service prototypinghelps discover where network problemscould occur and how each affects the total servicedelivery.Simply testing for proper infrastructure operation,while mandatory, is not sufficient. Rigoroustesting is essential to ensure that multimediaapplications, including voice and video,provide the QoE expected by users. During theinitial phase of an IMS implementation, testequipment placed at selected end-points, inthe field, across the network, provide ongoingfault reports. Because IMS is intended to beaccess-independent, the work of data conversionoften falls to the carrierʼs infrastructure.Testing ensures the delivery of correctly formatteddata to the end point.The three layers of the IP media subsystemWithin a service provider network, design and deployment of IMS technology takesplace within three specific layers: the connectivity layer, the control layer and theapplication service layer.1. The connectivity layer comprises the core Internet-working hardware within thenetwork. This may actually consist of several separate networks, such as one forwireline and one for wireless subscribers. An essential design principle of IMS isthat, despite its IP, packet-based, implementation, it supports both circuit-switchedand packet-based equipment, as well as the gateways between them. The SIP, SessionInitiation Protocol, the common element that ties IMS together, manages signallingthrough the connectivity layer, and the IMS network as a whole.2. The control layer is used to provision services and is implemented using differentcomponents, many of which are servers running within the carrierʼs network. Thecontrol layer also handles session setup and teardown, and manages the handoff ofsessions between carrier networks. IMS uses a session-oriented protocol, SIP, whichallows flexible negotiation and handshaking between end points, and the policybasedenablement and billing for services on a per-session basis.3. The application service layer offers value-added features and functions that go beyondthe straightforward connection and integration of heterogeneous networks anddevices. Carriers use the application layer to not only distinguish between themselvesand competitive networks, but also to lock subscribers in by, for example, storing agreat deal of application data and customisation that canʼt be easily transported.Working towards returnSuccessful IMS deployments are dependenton rigorous testing of all parts of the networkinfrastructure and the QoE. The pressure willbe on service providers to keep up with thepace of change.The set of protocols and interfaces that defineIMS are still evolving. The IMS set ofstandards is far more complex than anythingthe communications sector has had to adoptbefore, so it brings with it new challenges innetwork management. With the lucrative enhancedservices it makes possible, however,IMS is moving into the spotlight as a new wayto boost ARPU and ensure carriers get the mostfrom their investments in IP. As customers beginto expect better quality and more excitingservices - such as video on mobile phones -IMS will allow service providers to ensure thatthe investment they are making now is fullyfuture-proofed.With the right testing during deployment andongoing monitoring and service management,IMS is set to revolutionise IP services fromwithin. Issue 2006 59

Device ManagementDevice management for IP voice and databy Gene Wang, Chairman and CEO, BitfoneDual mode mobile handsets that access both mobile telephony and WiMAX for VoIP couldsoon be widely available. This will bring many benefits, including cheaper calling, but managingthe devices that bring these services will complicate the operatorʼs job considerably.Managing the highly complex device hardware, software, roaming and problem resolution is adaunting chore. Specialised device management software that can handle these tasks over theair is coming to the operatorʼs rescue and facilitating the growth of the market.Gene Wang is the Chairman and CEO of Bitfone. Gene Wang has over 21 years of experience leading high technology companies andhas participated as the CEO in three startups. Prior to Bitfone, Mr Wang was CEO and Chairman of Photo Access, selling its hardwarebusiness unit to Agilent Technologies. Previously, he served as the CEO of Computer Motion, which he led through a successful IPO.He has also served as: Executive Vice President at Symantec, where he managed four divisions; Vice President and General Manager atBorland; and, early in his career, Vice President of Marketing at Gold Hill Computers.Gene Wang received a BS Degree in Computer Science from the University of California at Berkeley.As the wireless market matures and technologyevolves, competition amongst operatorshas increased dramatically. In response to increasedcompetition, and an eroding growthrate, many operators began diversifying theirproducts by offering data services in additionto voice services. Operators are now dependenton services such as SMS, picture sharing,mobile gaming, instant messaging, and otherdata-centric services as the drivers for incrementalgrowth.Among the wireless data services under consideration,Voice Over IP, VoIP, has caughtthe publicʼs eye enabling new options forcommunication, such as push-to-talk, andinexpensive phone calls to anywhere in theworld. For the first time wireless users havethe capability to bypass the traditional circuitswitchednetwork and route their calls over apacket-switched network such as the Internet.VoIP is basically a set of protocols that convertan analog voice signal to Internet protocol,or ʻpacketizeʼ your conversation and deliverthem over an IP network versus a traditionalpublic switched network, PSTN.Leading VoIP vendor Skype TechnologiesInc., which is available around the world, hasabout 75 million users and Vonage has roughly1.6 million paying users. The availability ofubiquitous broadband access through wirelesstechnologies, such as 3G and WiMAX, furtherfuels the fire for VoIP. WiMAX, or 802.16e, isa broadband wireless solution similar to WiFiexcept that WiMAX is capable of coverage ofmiles versus feet and megabits versus kilobitsper second compared to todayʼs cellular networks.3G networks provide broadband dataservices using the cellular network and add theextra convenience of accessibility from justabout anywhere a subscriber may roam.However, even with strong consumer demand,“Leading VoIP vendor SkypeTechnologies Inc., which isavailable around the world,has about 75 million usersand Vonage has roughly 1.6million paying users.”VoIP technology has its challenges for providinga compelling user experience. While Internetor PC-based adoption has proven desirable,a market for the service moving towardsa fully mobile environment, via a dual-modephone with fixed/mobile convergence, raisesa host of management and support issues thathave not been addressed previously. Today,the operatorsʼ customer support centers costsare swelling trying to support smart devices,and their network operations teams are scramblingto support the most basic data services.The addition of a complex technology such assophisticated VoIP devices, coupled with multiplemanagement authorities to support them,introduces the potential for problems.Operators and solution providers need a comprehensivedevice management solution thatprovides the flexibility to provision and managedevices dynamically as they roam throughcellular and broadband networks, update thecore firmware of the device over-the-air,OTA, and automatically diagnose device issuesOTA. A variety of features are needed tomanage successfully a commercial VoIP solution.Automated device provisioningToday, most subscribers require settings fortheir primary network and Internet access.Power users such as ʻPro-sumersʼ and corporateusers require further settings for moreadvanced services such as email, synchronization,and instant messaging. With a VoIP devicean entirely new dimension of complexity is introduced.As devices roam between multiplenetworks and management authorities, a complexset of parameters are required on both thenetwork and the device to make the wirelessexperience transparent to the user. The phonemust be configured to handle an ever changinglist of roaming partners and networks inorder to maintain a reasonable service level.Without a seamless method of configuring andupdating service parameters, operators face asignificant risk of spiraling support costs andhigh customer churn.Device management solutions provide anideal mechanism for dynamically managing60 Issue 2006

Device Management“As VoIP drives usage of broadband data services, it will be even more critical that policieson the device are enforced to take advantage of network partners that optimize profitabilityand ensure the highest customer satisfaction.”the service configurations of mobile handsets,by over-the-air provisioning of device andnetwork specific parameters. Furthermore, theparameter definition can be dynamically calculatedbased on device and location specificinformation gained by remotely interrogatingthe device.Firmware over-the-airAccording to an Arc group report, checking a2G handset completely for software flaws andoperational efficiency requires the testing ofbetween 100,000 and 200,000 items. With 3Ghandsets, the list of items checked to assurecomplete operational normality totals betweenfour and five times that of 2G handsets. Thegrowth of the software residing on the deviceis driving dramatic increases in the complexityof the handset, not only in the number oflines of code but also in the interaction betweenvarious components. This increasedcomplexity, coupled with a shrinking developmentwindow, substantially increases the riskof software related problems.In order to deliver a cost effective VoIP solutionand high-quality user experience, a comprehensivedevice management solution mustinclude the capability to update the core firmwareand software over the air. The solutionmust be able to query remotely the device andretrieve the required device characteristics,such as manufacturer, model and firmwareversion to identify the correct update for thedevice. During an update, the user experienceis crucial. The user experience may consist ofallowing the user to schedule or defer updates,provide detailed information either before orduring the update process, and provide thefastest update process possible.Another important feature is making the timingof the update convenient. For instance, thesolution should provide numerous options toobtain an update, such as allowing the user tosearch through a menu item on the phone, updatethe phone when placed in a docking station,provide a web portal to trigger the update,or enable the management authority to initiatean update campaign and push an update to theuser.DiagnosticsAccording to research firm InStat/MDR, technicalsupport calls for data-enabled phones occurthree times more frequently than calls forhelp with basic voice phones. What is more,on average, the call length for data-relatedsupport calls is four times that of voice calls.The customer care groups of your operator andoriginal equipment manufacturer, OEM, areinundated with calls and their costs are skyrocketing.Add new VoIP devices to the equationand you can imagine where we go fromhere.An automated remote diagnostic feature enablesa management authority to ensure servicesare operational. This can be done inmany different ways. The device may be profiledduring a customer care call, automaticallytriggered by predefined traps and eventson the device, or initiated by the user througha portal or menu item. During a profile, hundredsof device parameters are gathered suchas email, network, or Internet settings, signalstrength, call drops, applications resident, etc.over a TCP/IP connection. The solution thenautomatically detects inconsistencies or possibleproblems using an analytics tool or devicetemplate.An automated remote diagnostic solutionmakes it possible for manufacturers and managementauthorities to increase the productivityof device support for data and applicationrelatedissues. The result is better customerservice, greater productivity, lower staffingrequirements, fewer training requirements andhappy customers.Policy managementAs in traditional cellular service, dataservices that utilize fixed/mobile convergencenetworks will also require roamingpartners for both cellular and broadbandaccess. The Preferred Roaming Listparameter on a device tells the devicewhich roaming partner to use, and is setup to ensure the operator can take advantageof negotiated roaming charges withpreferred networks. These lists are constantlyupdated, and outdated lists mayend up costing the operator millions ofdollars in excess roaming charges fornon-preferred networks.As VoIP drives usage of broadband dataservices, it will be even more criticalthat policies on the device are enforcedto take advantage of network partnersthat optimize profitability and ensurethe highest customer satisfaction. Froma logical perspective, the solution mustabstract the service logic from the networkand be capable of dynamically authenticatingthe device based upon policies,the existing service contract, andenable a real-time billing functionalityfor various services and applications. Asingle, unified, device management solutionwill streamline the management process,accelerate adoption, and improve the user experience.Policy management considerations are of increasingimportance, as well, for enterprisesthat wish to leverage the cost benefits of VoIPon mobile phones. Here, too, it is critical thatenterprises are able to adjust remotely policyparameters on devices to ensure approvednetworks are used and that appropriate securitymeasures are in effect to prevent sensitiveinformation from being compromised whenusing the new VoIP technologies. Device managementalso provides the added benefits of remotelylocking stolen or lost devices to protectusage of the device, and access to sensitive informationstored on the device, such as contacttelephone numbers and email addresses.VoIP is a complex technology interacting withnumerous logical and physical entities. Whendeveloping the business case for adoption, thereturn-on-investment is significantly impactedby factors such as total cost of ownership includingthe hardware/software costs, customercare costs, device complexity, etc. The successof VoIP is dependent upon the quality ofservice, QoS, and transparency of these issuesto the end user. A comprehensive device managementsolution augments traditional VoIPdeployments and is the missing element in asuccessful VoIP go-to-market strategy. “In order to deliver a costeffective VoIP solution and highquality user experience,a comprehensive devicemanagement solution mustinclude the capability to updatethe core firmware and softwareover the air.”Issue 2006 61

Voice and ApplicationsVoIP and market changeby Tony Lavender, Director of Telecoms Research, andMark Main, Senior Analyst, OvumVoIP is growing throughout the world wherever broadband penetration permits. Mobile broadband,hence mobile VoIP, is still quite limited. Although there are several VoIP service providers,they are not interconnected. A user of one VoIP service cannot directly call another withoutgoing through the public telephone system. The ʻSIPʼ technology VoIP uses is not limited tovoice, and it seems that voice will become just another component of transaction-based businessrather than a significant cash-generating business in its own right.Tony Lavender is Ovumʼs Director of Telecoms Research. He is responsible for the companyʼs global telecoms research programme. Hehas 24 yearsʼ experience in the telecoms industry. Prior to Ovum, Tony was at Oftel - now Ofcom - the United Kingdomʼs telecom regulatorwhere he played a leading role in competition and technical issues. Mr Lavender began his career with BT where he held a numberof senior roles.Tony Lavender studied Electrical and Electronic Engineering at Queen Mary College, London. He is a Chartered Engineer and a memberof the UK Institution of Engineering and Technology.Mark Main is a Senior Analyst with Ovum; he has 25 years of experience in the telecommunications industry. He is presently a memberof the Broadband@Ovum advisory service team - responsible for the analysis of fixed-line consumer broadband services - but also worksclosely with other Ovum Advisory Services on broadband network issues. Before joining Ovum, Mr Main was a Communications Engineerat Nortel Networksʼ Harlow Laboratories, developing advanced broadband and IP networking solutions. He had worked previously as aCommunications Engineer at BTʼs research and development laboratories.Mark Main is a Chartered Engineer, holds a BSc Degree in Electronic Engineering from the University of Southampton and has a postgraduateDiploma in Management Studies. He is a member of the Institution of Engineering and Technology.Voice over IP, VoIP, is gaining ground. VoIPvoice services over broadband have beensteadily gaining acceptance since about 2003,although much of the technology and the overallprinciples pre-date that by many years. Insome markets around the world, consumerVoIP is performing well - users in Japan andHong Kong are keen adopters of VoIP solutionswith a double-digit percentage uptake bypopulation. In Europe, France is the shiningstar with a few percentage points less.Elsewhere, VoIP uptake is considerably lower,in the region of a few per cent - althoughgrowth is still relatively rapid. What thismeans is that while VoIP is starting to makean impact, a fundamental change has yet tocome about. One reason is that the availabilityof voice services has grown steadily in recentyears and mobile services have tended to dominatefixed-line substitution so far. These mobileservices are attractive to new voice usersin that they can be used anywhere, often havesimple pre-pay arrangements and - in regionswhere fixed line broadband penetration is low- are an easily accessible alternative. VoIP serviceshave hitherto focused on the fixed-linebroadband market, primarily as a means toreduce long-distance and international callingrates. The appeal of VoIP depends, in the firstinstance, on the availability of broadband service.This will change as the market maturesand as feature sets grow.VoIP is a starting point, not the endpointA growing number of VoIP service providersbase their solutions on Session InitiationProtocol, SIP, technology, since the systemcomponents and customer premises devicesare widely and inexpensively available. TheInternet Engineering Task Force, IETF - apre-eminent IP technology standards-makingbody - continues to develop new SIP-basedvoice services. SIP-enabled applications havegreat potential and are not limited to voice. Abroad range of new applications will becomepossible as voice becomes a feature embeddedwithin other applications. Until recently, voicetelephony has been a relatively stand-alone,and very ʻprotectedʼ, application - largely becauseit is a significant cash-generator for telcos.That, increasingly, is no longer the case.Triple play (voice, video and data) serviceproviders have to offer voice services in theirbundle, but do not necessarily expect to yieldmuch other than a relatively fixed revenuefrom it. Equally, the incorporation of Skypeʼscommunications capability within the eBaybusiness model seemsto indicate that voicewill become just a componentof another transaction-basedbusinessrather than a significantcash-generating businessin its own right.The service opportunityVoice presents a paradox. Voice services aregetting cheaper as PSTN, public switchedtelephone network, tariffs fall, but users stillexpect high quality, reliable and secure voiceservices for their person-person communication.Currently, a number of highly competitive,non-interconnected, service providers,each trying to dominate the market, offer VoIP.The limited amount of VoIP interconnect thatexists today tends to be between the smallerplayers and is rather basic - many callingfeatures are not supported. VoIP interconnectwill present some significant challenges asthe number of users and networks scales-up.Providing all the end-to-end feature support,security, support for law enforcement requirements,quality and reliability within an interconnectedbusiness model necessarily meansthat someone will have to pay - most likely theend-user. It is unlikely that guaranteed endto-endvoice service will ever be free - it willprobably always have a price. Nevertheless,there is an emerging opportunity in the VoIP“SIP-enabled applications have greatpotential and are not limited to voice.A broad range of new applications willbecome possible as voice becomes afeature embedded within otherapplications.”62 Issue 2006

Voice and Applicationsinterconnection business; VoIP interconnectionis a complex business, but certainly onewith rich rewards for the successful servicefacility providers.Of course, many of the major telcos have theirown longer-term VoIP migration strategies aspart of a wider plan to implement next-generationnetworks, NGN, that call for the convergenceof fixed and mobile access and networksfor both data and voice. Although theequipment vendors are busy developing theirrespective NGN voice solutions, there will bea role, no doubt, for a new breed of facilityservice providers working alongside, or evenon behalf of, todayʼs telcos.Personalisation and presenceVoice telephony historically used a fixed,wired, connection. Mobile telephony beganthe move towards personalisation of voice services,but the integration of fixed and mobileapplications has had relatively limited successso far. This is partly for reasons of technology,but it has also to do with the relative high costof terminating voice calls on wireless than onfixed networks. As IP-based solutions increasinglypermeate all types of voice platforms, itwill become simpler to implement applicationsbased on usersʼ availability and ʻreachabilityʼ- a phenomenon known as presence. The useof SIP-based communication features will aidthis integration, not only for voice applicationsbut also for multimedia - video, file transfer,chat and other forms of messaging. Value-addedfeatures are expected to drive VoIP adoptionalong with other multimedia communications,but they will need to be simple to understand,simple to use and appropriately priced. Thereis an opportunity to carve out, designing andimplementing services to match the changingneeds of user groups.The rise of the application-focusedprovidersService providers have historically providedconnectivity and value-added applications.The lack of a common architecture has, so far,hindered applications development. The movetowards NGN will give operators and theirservice provider partners a chance to moveinto new applications. Most NGN plans callfor the development and implementation ofnew services over time.Emerging marketsAs noted, the adoption of basic VoIP servicesis underway and growth is particularly strongin emerging markets. A number of alternativenetwork providers have moved quickly to undercutthe incumbent voice operatorsʼ callingrates. Incumbent providers have been slowto respond with their own, competitive, tariffbundles and are losing out. In these markets,the adoption of broadband services is accelerating,not only because of high-speed Internetaccess, but due also to the availability of lower-costvoice services. As a result, broadbandaccess is growing fast in emerging marketssuch as Eastern Europe, South America andparts of the Middle East.“Fixed-line broadbandavailability has tended totemper the overall market sizefor VoIP.”The growth is not limited to consumers - municipaland commercial organisations areadopting new network solutions to make possiblechanges in working methods and procedures.Many of the changes are still quitesimple, largely because until recently IT infrastructurehas been rudimentary and poorlyintegrated. However, evidence of a greater focuson new applications and services is emerging,driven by a growing equipment vendorfocus upon these promising markets. Giventhe relative absence of legacy voice systemsin emerging markets, we expect to see morerapid adoption of new business applicationswith embedded voice services than has beenthe case in developed markets.Change of end-users needsPeople today are using technology in unexpectedways, reflecting what is important intheir lives. We should not assume that voicecommunications in the next ten to 20 yearswill be used the way they were in the past.The rise of social networking clearly indicates“People today are using technology in unexpected ways,reflecting what is important in their lives. We should notassume that voice communications in the next ten to 20 yearswill be used the way they were in the past.”that people are readily embracing new onlinetools and services in their lives. These are notsimply generation-driven changes - althoughthere are differences in the way todayʼs youthcommunicates compared with older generations.Organisations, and people within them,are also taking up new ways to work. As in theearlier discussion on ʻpresenceʼ, it is clear thatall communications - including voice - willextend well beyond the rather basic tools wehave long been accustomed to use.As with social networking, we expect that newgroups and associations will form the foci formany new communications-based applications;the potential of these groups is alreadydrawing the attention of entrepreneurs.Issues and problemsAs noted, fixed-line broadband availabilityhas tended to temper the overall market sizefor VoIP. We expect this to change as new applicationsstart to drive broadband availability.Adoption of VoIP technology by wirelessoperators will also catalyse VoIP uptake. Thelack of interconnection between VoIP serviceproviders, which could enable lower-cost endto-endservice, is an even greater problem.Interconnection is hindered by a number offactors, some commercial, some technical andsome political. It is a complex area, and onethat needs considerably more attention. In themeantime, there will be concentrations of usersaround relatively narrow application areas.Indeed, it may suit some service providers toremain isolated, particularly as business andrevenue models are still taking shape. Skype,for example, has never thought it necessaryto connect to other VoIP providers, althoughsome of its users would certainly wish to doso.VoIP has made a solid start, but there is muchyet to do. The story does not end with VoIP -extended voice services will provide enriched,more personalised, more purposeful communications.Voice is breaking out of its traditionallimitations, but there is a great deal of work yetto do. In the interim, there are short-term opportunitiesto create and capture new regionaland national markets with the new VoIP/SIPplatforms. Real opportunities will result fromidentifying the subtle changes in how peopleand organisations interact. We are likely to seeunexpected developments on the long journeyto an all-IP communications world. Buildingand sustaining a successful business model asthe markets and technologies evolve througha long series of complex changes is the challengeservice providers face. Issue 2006 63

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