Rami Houbby is director of service provider marketing with Allied Telesyn, a communications equipment supplier
What changes have you seen in the market thanks to issues like network convergence and triple-play services such as voice, video and data?
If you look at the majority of services today, if you are a carrier, you build a network. We ended up having service providers with separate networks to operate, manage and maintain. Each network is a single-service network.
Services now are changing; they’re no longer tied to an infrastructure. Today we can get a telephony service that is tied to the internet, like Skype. All of a sudden the service is just an application. Look at iTunes: [Apple] is a service provider, effectively, but it doesn’t own the infrastructure. That’s the challenge going forward for operators and service providers — how can they get a cut from these services on their networks.
Today, video requires the bandwidth and that’s why today it has to be delivered by the network owner because they can control the quality of service. With compression technologies, it will definitely happen where you own the content and the relationship will be between you [the content creator] and the recipient, with no one in between.
What implications does this trend have for manufacturers and operators?
It’s clear that the transition from network-based services to application-based services is hurting them. Last September China Telecom disabled Skype on its network because its revenue was going somewhere else. This is competition driven by technology and technology causing revenue displacement.
If you look at the providers that have narrowband infrastructure, they cannot add any value. Connectivity on its own where there’s no quality of service or capacity for premium services is really commoditised. The infrastructure needs to be robust, intelligent and application-aware to be able to drive these services. Unless you as a provider have that in your network, you can’t provide them and benefit from them.
Infrastructure operators are working with the likes of different application providers on how they can have bundles incorporated in their offering — this is in Asia and it’s coming to Europe. Yahoo! and BT have done a deal — people ask: ‘where’s the synergy?’ Yahoo has got no infrastructure but it is adding a lot of value to the BT infrastructure. It is already happening but it will be more commercialised when there are things like video and music integrated.
By Gordon Smith