Telecom companies gear up for content play: Telecom & Broadband Summit

MUMBAI: Telecom providers are increasingly entering the entertainment arena as a rapid march to the convergence era..

This was what came forth in the plenary session at CII's Telecom & Broadband Summit 2005 today.

The panel discussion - Broadband and wireless in India from an International perspective - had speakers like Accenture partner Sanjay Gopal, 3Com Corporation regional product marketing director Asia Pacific Mathew Walmsley, Microsoft GM communications sector (APac, Greater China and Japan) Michele Verhoeven and BDA China MD Duncan Clark.

The speakers noted that in the past there has been talk of convergence of content anytime and anywhere. Gopal spoke about the emergence of trivergence where there are controls for getting content. An example would be Apple's iPod. This has only two buttons. The iTunes software allows users to make playlists from songs. Devices are becoming simpler to use while performing an increasing number of tasks.

Growing M&A activity: At the session one point that came out is the fact that now there are a lot of merger and acquisition activities taking place internationally. Telecom firms are expanding into adjacent companies. Vodafone, for instance, has bought firms in Romania. It is only a matter of time before they start looking at India and China.

Also telecom majors are entering the new technology arena through acquisitions. For instance, Cable And Wireless bought Bulldog last year in the UK as it anticipated greater broadband uptake. Cable and Wireless wants some control over the last mile. The company was looking to enter the local-loop unbundling (LLU) market, letting it create and sell businesses in broadband packages that are different and potentially more innovative than those sold by BT Wholesale.

At the same time, companies that make broadband investments must see that there are synergies. Robust services for broadband must be created. Otherwise there is the danger of write-offs in four years time. Customer profitability is a challenge. A telecom operator may increase his service portfolio but in four years time he may find that profitability is not what had been anticipated.

Accenture has conservatively estimated that there will be 10 million broadband homes in India by 2009. GDP growth is expected to be around five per cent. Even so one has to be careful and examine the market to know the kind of services that will work and be popular in this environment. For now gaming and music seem like sure bets.

Instances of telecom companies ramping up to offer video and better voice and other customer services were given. BT for instance has an ambitious project - 21st Century Networks (21CN). It is a 10 billion pound investment and is a global IP infrastructure that carries voice, text data and video. Three hundred vendors are revamping the network.

It is based upon multi-protocol label switching (MPLS) that carries voice, data and internet services on a single network. The 21CN offers multiple services across a single network, rather than today's multitude of networks offering specific services. For BT, this will mean fewer network elements overall and require simpler network management.

Telecom Italia meanwhile successfully rolled out ADSL. The aim is to provide cost effective broadband services. This is being done on the backbone of a content management system and an IP billings service. The firm is now in the third stage of moving towards a fully integrated platform that offers a multitude of services including IPTV and VOIP.

Korea Telecom has made substantial investments in a wireless broadband network. In the first year, the move saved $90 million in terms of operating costs. That is because they standardised the architecture. As far as IPTV is concerned, it was noted that South East Asia has an advantage over the rest of Asia. That is because of their fixed line networks, which are new and can pump in a large amount of bandwidth into homes.

At the same time IPTV service providers have to contend with a saturated TV market where cable and DTH are available. The key to the success of IPTV will rest on killer packaging and a value proposition. There is also the challenge of storage for video on demand (VOD) services.

The IP network must be configured in a reliable and secure manner. Otherwise the content owner will be reluctant to part with what he has if there is no security guarantee. The challenge will also lie in scaling IPTV for the mass market.

How do telecom firms acquire killer content? Walmsley spoke about the need for broadband solution providers to understand the mindset of the consumer. For IP operators offering a VOIP call at the cost of an SMS could be a value based proposition. He mentioned gaming on the console which is interactive as being a key driver of broadband. This is expected to grow at the rate of 300 per cent in Asia.

Triple play services will be important for telecom firms. This refers to getting everything - whether it’s a film on DVD, TV, Internet, or phone from one place. The STB thus serves as a broadband gateway. It provides network address translation.

Broadband solution providers should look to provide value added services like an anti spamming facility for the email. For the wireless digital home network, it is important to have strong encryption. Otherwise ones neighbour can access ones content like VOD. He envisioned a situation in the future where the digital home network will become a digital home entertainment network. This will be a homogeneous multimedia platform and will see broadcasters, IP and mobile service providers working together. The network will be so integrated that one will be able to surf the Internet on the mobile.

One key issue in all this in the future will be interopability between different devices at home. Through software whose standard must be agreed upon, different digital devices should be able to communicate with each other.


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