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Wed 23 Aug 2006 04:00 AM

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Multi-access manoeuvres

Triple play has been a concept under development in the telecoms sector for some years now, with the deployment of fibre to the home playing a key role in commercialising the concept. However, the inclusion of wireless access as a fourth element of triple play is gaining market support, resulting in the development of quadruple play services aimed at maintaining and growing service revenues.

|~|Lamba,-Akshay200a.jpg|~|Akshay Lamba believes quadruple play offers cost and price benefits in terms of operational efficiencies and deep customer segmentation analysis, which assist in the rapid response to market changes and customer desires.|~|Often humorously referred to as “The Fantastic Four” — quadruple play is a term used in the telecommunications industry to signify the convergence of four types of services, namely, voice, video, data and wireless. There are three primary facets of quadruple play that must be looked into to gain a deeper understanding of the subject. First, the network view of quadruple play — what technologies enable the delivery of four different services on the same delivery channel. Secondly, what are the non-network elements, such as billing and provisioning, which need to be in place for a telecommunications company to be able to deliver true quadruple play to the market place. Lastly, what are the marketing implications of quadruple play? How can true converged services such as quadruple play be leveraged to enhance ARPU and reduce customer churn?

The network view
Traditional 2G GSM networks delivered digital voice on wireless platforms to customers. Evolving into 2.5G networks such as GPRS and EDGE, overlay networks, brought in the flavour of data on the handset. Today, 3G HSPA networks can potentially deliver broadband data and video on demand to customer premises equipment with an acceptable level of quality of service.

However, true quadruple play needs two bits of technology for successful deployment in a commercial environment — broadband wireless for the access network, and IMS based all-IP NGN networks in the core.

Disruptive technologies, such as broadband wireless solutions like WiMAX and WiBro are around the corner, with operators around the globe engaging in test beds and commercial viability designs. HSPA networks on 3G access could also potentially cover the requirements for telecommunications companies to launch quadruple play services over this access channel. WiMAX is defined as Worldwide Interoperability for Microwave Access by the WiMAX Forum, formed in April 2001 to promote conformance and interoperability of the standard IEEE 802.16, also known as WirelessMAN. The Forum describes WiMAX as “a standards-based technology enabling the delivery of last mile wireless broadband access as an alternative to cable and DSL”. Currently a number of “flavours” of WiMAX are available such as 802.16d and 802.16e.

The IP Multimedia Subsystem (IMS) is a standardised Next Generation Networking (NGN) architecture for telecom operators that want to provide mobile and fixed multimedia services. It uses a voice-over-IP (VoIP) implementation based on a 3GPP-standardised implementation of SIP (Session Initiation Protocol), and runs over the standard internet protocol (IP). Existing phone systems (both packet-switched and circuit-switched) are supported. The aim of IMS is primarily to provide converged solutions. In this way, IMS will give network operators and service providers the ability to control and charge for each service over a single access technology.

A combination of these two technologies enables telcos to deliver converged solutions that include traditional voice, VoIP, video on demand, broadcasting and broadband data all on a wireless platform to a single end user device.

The non-network elements
Putting in the necessary network infrastructure would not necessarily mean readiness for launch of quadruple services. A number of customer-facing and support activities would also need to be enhanced if one is to meet up with customer expectations. Also, business intelligence would mandate a number of enhancements in the way that the market is viewed. All this leads up to maturing processes such as single customer view, converged billing and rapid services deployment via service delivery platforms (SDP).

In the hype surrounding quadruple play, it might be easy to forget the importance of billing. Although there are several ways to support billing for quadruple play, all involve some degree of system consolidation. This ranges from the relatively simple option of bill stapling to the full convergence of disparate billing systems. In the traditional scenario, the processing, rating and invoicing for each line of business of the quadruple-play package (such as voice, video, data, and content) is performed by a separate system. Stapling the four invoices together performs the final bill consolidation. In essence, it is only at the very last mile of the entire billing process where the bundle is achieved. As part of the maturity of the quadruple play offering the invoicing process would need to be conducted by a joint billing system even though the event processing and rating is conducted by disparate systems (in case the offerings are from different networks such as GSM for voice and MSC for video/content).

IT departments would need to ramp up their abilities to provide these services to the business teams across most telecommunications organisations. A number of activities have already been initiated in the region by telecommunications companies in order to prepare their billing, SDP and CRM systems in order to be ready to deliver the necessary abilities to the business teams in order to be able to respond quickly to market changes.

A marketing view
In the next decade, voice revenue, as a separate component will probably disappear, becoming part of a myriad of communications services and entertainment bundles. Voice in the digital and IP world will become part of a discounted package. This consumer-driven momentum will be compounded by VoIP technology, which will destroy the present business model. Other mediums of communications, such as SMS, IM and wireless, will eat into wireline voice.

Established voice revenue will decrease on an ever-slippery slope as we approach the end of the decade. As a separate entity, voice revenue can potentially be for all practical reasons dead. Commodity access charges will always be around. Broadband will become the dial tone of this new millennium, a commodity on which various services will be delivered. The value will be in the services, not the access, and the established enhanced voice services will simply become discounted “throw ins” of the standard bundle.

A similar phenomenon began in the 1990s. Frances Cairncross detailed “The Death of Distance” in The Economist magazine and later in her 1997 book by the same name. Distance is dead. The cost of electronic communication will not be impacted by distance. After the initial communication infrastructure was deployed, future information would travel at an effective price of zero. Distance is dead, was not a statement of fact for the day, but rather portends to the future. Future metering of communications based on distance would disappear. The disappearance of distance metering takes time, though the exact timing of distance's demise is yet to be determined. Similarly, the death of established voice revenue will parallel the death of distance.

This decade is also set to usher in “The Death of Bandwidth”. Bandwidth on demand and fibre to the home will practically erode the current bottleneck of bandwidth delivery at customer premises. This would have a lasting impact on the way the marketing teams view the market. With distance and bandwidth a commodity, the business differentiator for telecommunications companies will be the services offered and their quality. Given that customers will be charged for bundles of services, it becomes a sustainable challenge for marketing departments to create the right product mix for specific customer segments. The new challenge then is — how does one price and profitably bundle these services.

Business decisions
Incumbent operators are struggling to replace voice revenue and profit lost due to competition, price declines, migration and substitution effects. To minimise losses, they have had to introduce products that might cannibalise existing offerings.
In the consumer market, operators have targeted broadband internet access, value-added services, mobile services and are beginning to offer forms of entertainment. Bundling these services into triple and quadruple play offers has resulted in deeper penetration of services and reduced churn.
But competitive pressure from cable companies, VoIP providers and mobile operators has driven pricing to the point where incumbents' revenue has not grown or has fallen, and margins have reduced.

Things have not been much better in the business market. While bandwidth demand continues to grow rapidly, competition from low-cost providers, plummeting prices per megabit, network grooming, displacement of inefficient private line, and frame relay networks have produced minimal or no growth. In search of revenue, service providers have been pursuing managed service opportunities, offering customer premises equipment and services, and pursuing IT and applications, with and without strategic partners.

These challenges are critical in the short term and will persist until incumbents can evolve their network and operations to become more cost-competitive and flexible enough to meet the market's future demands for a high degree of customisation. Incumbents have a high cost structure to support. This results from their still-significant investment in legacy copper plant and network equipment, their “carrier of last resort” obligations and personnel costs that are significantly higher than those of their competition.

In the enterprise market segment, as telecoms service providers search for new revenue streams, finding the most appropriate and cost-effective network architecture to implement quadruple play services will also be a key differentiator.

To increase revenue from the business market, telecoms carriers can offer network based services such as internet protocol/multi-protocol label switching (IP/MPLS) virtual private networks (VPNs), as well as converge different streams of business traffic such as asynchronous transfer mode (ATM), frame relay and time division multiplexing (TDM) through a single platform over an IP/MPLS core.

Companies view reliable, secure “any time, any place” access to corporate resources for staff, suppliers and clients as a strategic necessity to remain competitive. Compared with traditional network solutions such as private-line, frame relay and ATM, services based on MPLS offer the promise of greater networking capability, flexibility, scalability and operational simplicity at a potentially lower total cost of ownership.

In summation, there are two streams of quadruple play that can be offered to the market. Firstly, a “virtual” quadruple play package where the services are bundled together for marketing however the individual services are delivered over separate networks with loosely knit support services.

Secondly, a “true” quadruple play package where all four aspects are delivered over a single wireless delivery channel with a converged core network and an integrated support structure. While, the first option is good for accelerated go-to-market strategies, it is the second that provides cost and price benefits in terms of operational efficiencies and deep dive customer segmentation analysis, and hence rapid response to market changes and customer desires.

The author is a business & telecoms consultant and can be reached at akshay@lambaweb.com. The views in the article are the author's and are not attributed to the publisher or the employer in any way.||**||

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