Shows and Throes – Convergence and Divergence
Every second six new Internet users join the net. Ten years ago, statistics from the ITU show there were less than 75 million users – today there are more than one billion. The influence of the Internet Protocol, IP, however, is far more profound than even that seen in these extraordinary statistics. IP lets users transmit any sort of information – be it voice, data, image or text, our telephone conversations, radio broadcasts, television shows, whatever you may have – digitally over a single network; this is called network convergence. Convergence, not just of networks though, but of markets, is the hottest topic at the shows I have been to during the last two weeks. Now convergence has been a hot topic for several years, but this year things are changing considerably. Convergence was the technological wonder all the vendors were hawking at shows in years past – the great hope for the future of communications, the great dream of the sales force. Convergence was there, of course, but mostly as a taste of things to come. This year convergence is not as much a question of technology, but of markets. The technology, after years of talk, is finally real – it’s here and ready for use. The vendors, of course are competing, but the big competition is between the users – the operators and service providers. Broadcasters, fixed and mobile telephony operators, cable companies, Internet service providers, virtual operators, VoIP providers – everyone, that is – are all vying to offer the broadest possible range of IP-based communications services to businesses and individuals. From the talk, the attitudes, it is easy to see that for many this battle for the market is becoming personal; service providers are diverging more than converging as the market heats up.
Futurecom, 3-5 October 2006 in Florianópolis, Brazil, is one of the best regional shows I know. Year after year one can count on a first-rate conference line-up. The leaders of Brazil’s most important telecommunications vendors and service providers all participate as keynote speakers, debaters or lecturers – and those that are not on stage are there to listen and learn about what the competition is up to. This is something of a ‘family’ event for the sector and the rooms tend to fill with muttering friends and ‘family’ from all sides. As always, Brazil’s telecommunications authorities, the minister and his staff, and the head of the regulatory agency with his staff, are there for the duration of the show. While the show goes on, that is where the action is in Brazil’s telecom sector.
The exhibition area hosts all of Brazil’s major players; it is the major business networking event of the year.
This year, the discussions centered upon proposals for the next government – Brazil is in the midst of a presidential campaign – upon universalisation and inclusion, broadband and convergence, convergence and more convergence. This year’s Futurecom was a show of convergence and thinly disguised divergence. Now that technological convergence is more than talk, the talk is – ever so politely, at least in public – heating up as each of the players tries to stake out his piece of the market. In lecture after lecture, debate after debate, one heard thinly disguised complaints about the supposedly unfair advantages the competition, the operators, cable companies, mobile operators, broadcasters – take your pick – has.
The Broadband World Forum in Paris, France, 9-12 October 2006 is not as much of an industry-wide, general, event – not as much of a family show. It is a single purpose show all about broadband, one of the main drivers of convergence. It is an IEC show, and as at all such events, one can count upon an excellent series of conferences. The show’s keynoters included, among others, Didier Lombard, Chairman and CEO of France Telecom, Francois Loos, France’s Minister Delegate for Industry and Mike Quigley, Alcatel’s President and CEO.
Convergence drove most of the interest. Since the Internet Protocol turned the ordered world of telecommunications upside down, and made it possible for service providers to cost-effectively provide voice, data images and text over a single network, the goal has been to offer triple play, voice, data and video – or ‘quad play’, which adds mobile service to the mix. For some service providers, cable companies, for example, this has been relatively simple. Telcos, on the other hand, have found it difficult to compete with the cable companies until now.
IPTV, a way to let fixed telcos transmit television and compete with the cable companies and other service providers, was one of the stars at the show. Telcos need IPTV to complete the product range they need to compete with the service providers that are using Voice over IP, VoIP, to siphon off their core voice business, and the IPTV vendors with their latest and greatest products were all there. No more ‘vaporware’, the real thing has come at last; the market is full of new IPTV products.
WiMAX was the other star of the show. In the past, there was much talk about using WiMAX, a standardized, much improved, IP version of the old point-to-multipoint radio technologies, for backhaul or connecting local access networks to the primary network ‘backbone’. The longer reach of WiMAX wireless and its high capacity made it a promising way to deliver wireless broadband in hard to reach regions. Many operators, though, see WiMAX either as a way to compete with – or enhance – mobile, cellular, services or as an inexpensive way to rollout local broadband access. Most of the WiMAX talk at the show was about cell-like network topologies with lower-than-3G mobile pricing, WiMAX enabled chip sets for computers and dual-mode 3G/WiMax mobile handsets. Still, as one vendor admitted, as network topology and use approaches that of current cell phone networks, when the investment in third generation (3G) cellular frequencies is amortised and when the cost of handsets comes down, there may be little if any practical difference between the two technologies.
Alcatel Vice President, Carl Rijsbrack, summed up well what full convergence can mean to users and service providers – “new dimensions to the TV experience… richer service and a better reach… a seamless experience” and “user-centric services”. In his view, the ‘killer application’ will be a ‘cocktail’ combining different types of media, delivered by broadband, with guaranteed quality of service. The new IMS-based architectures will feature presence, reachability, location-based services and self-management of systems and services. For business users, convergence will bring new business models, better service delivery, and improved processes.
The telecommunications sector, despite the shows and the brave faces, is in the throes of a major revolution. Companies, concepts and fixed ideas are melting down and being re-forged to meet the new realities. The shows give us a glimpse of a new start for service providers and operators as they begin to re-invent themselves and scurry to find new products, new services and new business models to meet the new day.