ITU-T Workshop on
Multimedia in NGN
Next-Generation Networks
(NGN): Market and
regulatory trends
Dr Tim Kelly, Head, Standardization
Policy Division (ITU-T)
NGN and Multimedia Workshop,
Geneva, 10-11 September 2007
The views expressed are those of the author and do not necessarily reflect those of the ITU or its membership.
The author can contacted by e-mail at tim.kelly@itu.int.
International Telecommunication Union
Agenda: NGN: Market and
Regulatory Trends
z NGN migration strategies
¾ Why should we migrate from today’s networks to
tomorrow’s NGN?
¾ Examples of Telco Strategies (developed and developing)
z Market trends
¾ Telcos still heavily dependent on voice revenues
¾ But, the trend is towards bundling and flat-rate pricing
¾ Voice revenues will drive NGN investment
z Regulatory challenges include:
2
¾
¾
¾
¾
Interconnection, billing and pricing
Competition policy
Compensation for stranded assets
Privacy and security concerns (identity management)
NGN migration implies network integration
and a “portable” user environment
Source: OFCOM.
International Telecommunication Union
But, doubts persist over NGN
4
z NGN represents the convergence of the Telco
and IP worlds. But will it be a collision?
z Is the NGN just another a telco attempt to
recreate an “Intelligent Network” with
centralised intelligence?
z Is the NGN primarily an overlay or a newbuild?
z Is it just a clever marketing name?
z Who pays for what, where, when and to
whom in an NGN environment?
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So, what might be the benefits of a
Next Generation Network?
z For the Operator:
¾ Lower costs in having a single IP-based network to invest in
and maintain, and fewer switching locations
¾ Single billing contact with the customer (“internet with
billing, security & QoS”) and 3rd party content providers
¾ Possibility to offer multiple play (voice, video, data etc) and
faster time to market for new service roll-out
z For the Customer:
5
¾ Possibility to use the same customised environment
between different platforms and from different locations
¾ Possibility of lower prices through bundled service offerings
¾ Integration of user-generated content (e.g., photos, music
and video library, website) with that of service provider
¾ Creating an “Internet of Things”
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NGN Migration Strategies
Operators will follow different strategies, depending
on resource and market factors, write-off of current
network assets, the size of the network
z Strategy 1: Rapid deployment of core network NGN
¾ Replace core PSTN network as soon as possible.
¾ Example: BT expects 50% PSTN migration in 2007.
z Strategy 2: Rapid deployment of all-IP network.
¾ Replace copper access with fibre as soon and as widely as
possible.
¾ Example: KPN
z Strategy 3: Overlay.
Source:
Ovum.
6
¾ Keep NGN and PSTN running side-by-side as long as
possible.
¾ Example: DT plans overlay NGN with PSTN substitution in
2012
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NGN in developing countries
z More likely to be leveraged off mobile than
fixed-line networks
Source: ITU
World
Telecom
Indicators
Database.
Percentage
of mobile
users and
fixed-lines,
2006, by
type of
country
Total: 68.8m
100%
1.59 bn
69.4%
63.8%
80%
60%
89.9%
20%
30.6%
36.2%
10.1%
LDC
Mobile
Fixed lines
40%
0%
7
2.24 bn
Developing Developed
International Telecommunication Union
NGN in developing countries
z More likely to be leveraged off mobile than
fixed-line networks
z More likely to be a new build than an
overlay
Total: 61.9m
1.56 bn
1.02 bn
100%
Source: ITU
World
Telecom
Indicators
Database.
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2006
Installed
base of
mobile
users,
pre and
post 2000
80%
46.8%
Post 2000
60%
96.9%
87.4%
Pre 2000
40%
53.2%
20%
0%
3.1%
LDC
12.6%
Developing Developed
International Telecommunication Union
NGN in developing countries
z More likely to be leveraged off mobile than
fixed-line networks
z More likely to be a new build than an
overlay
z More likely to be driven by cost savings
Examples
z In Chile, VTR is offering triple play services to
2.2m residential subscribers
z In Sudan, Canar Communications has
launched an IP-based NGN network in 2005,
including voice and wireless Internet bundles
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Long-term telecom revenue trends
Revenue (US$ billion)
1'400
1'200
1'000
Other (e.g., non-voice)
800
Mobile
600
International PSTN
400
200
0
1991
Domestic PSTN
1993
1995
Source: ITU Information Society Statistics Database.
1997
1999
2001
2003
Revenues from voice-oriented networks are
relatively stable as % of total telco revenue
Revenue (US$ billion)
1'400
Voice as a % of total
100%
90%
1'200
80%
1'000
70%
800
60%
50%
600
Non-voice
40%
400
Voice
30%
Voice as % of total
20%
200
0
1991
10%
0%
1993
1995
1997
Source: ITU Information Society Statistics Database.
1999
2001
2003
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The trend towards flat-rate pricing
Global trends in broadband pricing schemes
Number of economies
180
160
140
Data
Both
133
120
100
80
60
68%
Time
Flat-rate
166
145
75%
81%
40
20
0
2004
12
2005
2006
Note: Data” refers to price packages with bit caps. “Time” refers to time-metering . “Both” refers to packages with
both data and time caps. “Flat rate” implies unlimited monthly use.
Source: ITU World Information Society Report 2007 (www.itu.int/wisr).
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Growth in broadband speeds
Growth in max. broadband speeds
40
2003
2005
35
2006
2006
30
25
20
15
2005
10
5
2003
0
Speed (kbps)
13
Source: ITU World Information Society Report 2007 (www.itu.int/wisr).
International Telecommunication Union
Triple-play bundles: The example
of Free.fr (Iliad)
z Freebox: 29.99 Euros per month (US$40)
z ADSL2+ Internet up to 28 Mbit/s (down)
1Mbit/s (up)
z Unlimited VoIP calling to 49 countries
worldwide (+domestic calls and line rental
in France)
z 100 video channels (+ 150 options)
z But … only available in France
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International Telecommunication Union
Some regulatory challenges of NGNs
z Pricing: Will NGN offer prices that are significantly lower than
those available today?
z Bundling and billing: How to distinguish the real price of services
when they are bundled?
z Interconnection: Will current interconnection models (based on
per-minute settlement) work in an NGN?
z Security: If much greater capacity is available at the edges of the
network, how to guarantee security?
z Investment: Will unbundling discourage new infrastructural
investment? Infrastructure sharing?
z Traffic prioritisation: Is the Net really “neutral”?
z Emergency services: What level of universal service obligation to
impose?
z Competition policy: Significant market power will not disappear
in an NGN environment
z Consultation: compensation for stranded assets?
15 z Identity management and privacy: What rules for data retention?
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NGN interconnection options
z Either, towards complexity
¾ Differentiate between different traffic streams with
different QoS
¾ Differentiate between different user terminal
devices (e.g., fixed, wireless, portable)
¾ Provide interconnection options based on perminute, per-volume, per-service type and percontent type
z Or, towards simplicity
¾ Sender keeps all (bill and keep)
¾ Arrangements based on interconnection capacity
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Identity management and privacy
z NGN services can be
combined with identity
authentication (e.g. with
RFID)
z Can be also be
combined with locationbased services (e.g.,
with GPS)
z This may require a
federated approach to
identity management
z But it raises questions
over data retention,
legal interception etc
z ITU-T has established a The many partial identities of Alice
Source: Clauss & Klöntopp (2001), cited in ITU Internet
Focus Group on
Reports 2006: Digital.life
identity management
www.itu.int/digitallife
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Conclusions
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z NGN business case looks promising, but
voice revenues continue to drive investment
z NGN in developing countries are more likely
to be leveraged from mobile and new-build
networks, and driven by cost savings
z Trends toward bundling and flat-rate pricing
in retail market will be mirrored by capacitybased pricing in wholesale market
z Identity management and privacy concerns
pose new challenges for NGN standards
development
International Telecommunication Union
Thank you.
For more information, see:
z ITU New Initiatives Workshop
“What rules for IP-enabled NGNs?”
(March 2006) at:
http://www.itu.int/spu/ngn
19
z Trends in Telecom Reform: The
road to NGN (2007) at:
http://www.itu.int/ITU-D/treg/