NGN Will Piggyback on Mobile Networks; Business Models Unproven
GENEVA -- Voice revenue is crucial to getting Next Generation Networks into developing countries, as regulators, operators and consumers watch to see whether new technology can deliver lower prices while attracting required investment. NGNs in developing countries are likely to be built new, not overlaid on existing networks, said Tim Kelly, head of the ITU’s Telecom Standardization Policy Division. Doubts persist over NGN business models, he said during a workshop Monday and Tuesday on multimedia and NGN. “The business case is not yet proven,” he added.
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Savings for operators and consumers will spur NGN in developing nations, which likely will build on mobile networks, he said. The move to NGN is under way in the developing world. Two years ago an Etisalat subsidiary began rolling out an IP-based NGN network in Sudan, he said. VTR Globalcom is offering triple play services in Chile. The ratio of mobile to fixed lines is 10 to one in the least- developed countries. “If the new services are not available on mobile, then they probably won’t be available at all in the least developed countries,” he said
NGN business models must be based on voice revenue for the foreseeable future, Kelly said. Voice is still the major revenue provider worldwide, declining only from 84 percent of total telecom revenue in 1991 to about 81 percent today, he said.
Pricing is moving to flat rates typical of broadband networks and away from the per-minute pricing typical for fixed and mobile networks, Kelly said. In 2004, flat-rate plans were offered in two-thirds of the world’s economies with broadband offers, he said. In 2006, flat rate plans grew to four-fifths, he said. Speed and price performance ratios on broadband networks are outrunning Moore’s law for improved chip speed, he said. The number of economies offering 3.5 Mbps grew from 2 in 2003 to 30 in 2006, he said.
Regulators likely will keep worrying about delivering lower prices while attracting needed investment, Kelly said. Setting prices on critical services like basic voice access in bundled services probably will attract regulatory attention if prices keep tilting toward flat rates, he said. Regulators will watch for movement away from per-minute interconnection and toward flat rate, capacity-based interconnection, Kelly said. “Security may require some national level oversight from national regulators, particularly in terms of security for critical network infrastructures,” he said. Regulatory concerns involve traffic prioritization, emergency services, competition law, sharing of facilities, identity management, privacy and data retention. - Scott Billquist