Alcatel urges telcos to see NGNs through ‘new lenses’

16 Oct 2007

Mansion House, Dublin: The broadband incentive problem said Houston Spencer, chief marketing officer of Alcatel UK & Ireland, is that the cheaper and faster telcos make broadband, the less money they make.

Don’t blame the end users for downloading huge media files, or the regulators for not providing an economically viable environment because this is the direct result of the suppliers, said Spencer.

He said that rather than address the common definition of NGNs (next generation networks), he asked the provocative question: “NGN to what end?”

Financially and growth-wise, if telcos focus on the network they are only focusing on half the problem, he said, because this is part of broadband transformation 1.0.

Instead of focusing on increasing customer loyalty and getting an NGN in place, Irish telcos need to look at transformation 2.0, he said.

Telcos need to become a platform business, a service broker and start to increase their focus in wholesale and enterprise markets. The bottom line for future profitability is diversifying into new markets for alternative revenue streams.

Spencer said that viewing a telco as a network business is a false model. It must be a case of giving value to upstream areas which deploys value to users.

Everything that goes across an IP can be viewed as a potential revenue stream, he said. With a network and solid payment/customer system in place a telco can diversify into payment and commerce.

This is not straying from what a telco ultimately is, he said. This still requires a huge amount of technology to work. It simply means that the industry must try to get value other than voice and broadband.

He said usage and scale will driven by killer applications but that there is no killer application, rather there are many that drive this, such as Facebook, which is driving mobile use second to email, but mass uptake of these apps cannot be predicted.

He also said that the paradox of user importance exists, where the importance of subscribers decreases while at the same time the importance of the individual user increases, explaining that one broadband subscription can mean multiple users, each with their own service apps and data usage needs.

By Marie Boran