Linking Networks

Convergence has been one of the buzzwords in the telecommunications industry for the past couple of years, but not just in the more competitive Western markets. Middle East operators are now looking towards one type of convergence, triple-play, to offer customers voice, data and video.

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By  Alex Ritman Published  April 27, 2006

|~|Marafih200.jpg|~|“I think we will hopefully be among the first in the region to provide these triple-play services. With triple-play we will be covering everybody, because it is done through DSL technology.” Dr Nasser Marafih, CEO of Qtel.|~|Convergence has been one of the buzzwords in the telecommunications industry for the past couple of years. The industry has been drawn together, not just by market convergence as suppliers and operators merge, but within the technology, as new developments allow previously separate services to come together, allowing providers to have a larger range of offerings. Landline operators looking to claw back declining voice revenues have been looking towards fixed-mobile convergence. BT in the UK, for example, has developed its Bluephone, a handset which connects to a GSM network when outdoors but once within range utilises either Bluetooth or Wifi to connect to an IP network. Such a move reduces the cost to the consumer, but also ensures that the fixed-line provider rather than the mobile operator makes the all-important termination. Rife competition in advanced and highly liberalised telecoms markets such as the UK has seen serious churn rates among the more established operators with subscribers switching to alternative providers with more offerings. One form of convergence that has helped both side of the competition is triple-play, the trio of services including voice, data and video, giving a combined offering of telephony, broadband and television to customers. Such a large package requires higher bandwidth, something that, up until only recently, could not be achieved down operator’s normal copper lines. Research in the US as far back as 2001 indicated that of the two million lines lost by the regional operators over the year, 60% was due to triple-play offered by cable providers. But the advancements of DSL technology now mean that the bandwidths needed to offer such triple-play offerings are available. In these competitive markets, where operators are battling it out, not just against alternative fixed-line providers, but cable and satellite, some believe the telcos simply must deploy triple-play if they are to survive. Jurgen Hofkens at Alcatel thinks telcos don't really have an option. "The profitability for telcos of triple-play services is unsure, but they simply don't have a choice." To compete against the offerings from cable or satellite, Hofkens believes telcos simply have to offer at least the same, or risk losing the market. "One of the major sparks is the fear for the future," says Hofkens. As telcos are unsure of what lies round the corner with regard to future revenue threats, they "must simply offer as much, if not more, than their rivals". As Hofkens points out, the cost for telcos to compete in triple-play is in their advantage, having already established networks and with decades of experience. "The price of new generation DSLAMs has been falling, and with the improved ethernet technology, and the increased bandwidths from ADSL2+ and VDSL the operators can make a serious case to shareholders perhaps unsure about entering triple-play without any guaranteed profits." ADSL2+ can support bandwidths around 20-25 megabits a second and VDSL up to around 52 megabits. But the Middle East has not yet seen the sort of competition experienced in Europe and North America, yet triple-play is certainly on the radar of local operators. Liberalisation has meant that previous monopolies are being or have been dismantled and operators are realising that their fixed-line customers might not be so secure as they once were. Regional operators are starting to look towards triple-play, the technology allows fixed-line operators to have voice, broadband and television all sent down the same connection, vastly increasing their offerings and helping improve efficiency, ease of use and general customer satisfaction. Operators in the region are slowly moving towards IP-based Next Generation Networks, moving them away from old Legacy platforms and being able to offer a vast array of new services. One of these is triple-play. “We have started gradually deploying an NGN network,” says Dr Nasser Marafih, CEO of Qatari incumbent and monopoly holder Qtel. “We have a clear roadmap where we will replace the old TDM network with NGN.” Using a multi-vendor strategy the deployments started in 2005, with the replacement of the old switches set to go on over the next three years. With an IP-based platform, triple-play services are the inevitable applications to drive revenues. According to Marafih, trials have already started in Doha and he expects them to be completed by 3Q06. “I think we will hopefully be among the first in the region to provide these services.” Providing video is not simply a case of providing sufficient bandwidth, it requires complicated arrangements with content providers and broadcasters. Fortunately for Qtel, it has sufficient experience with Qatar Cablevision, its wireless cable television system that was inaugurated in 1993. “We cover most of the country with this service, but with triple-play we will be covering everybody, because it is done through DSL technology,” says Marafih. The current offerings through Cablevision provide around 90 channels, and the deals drawn up will be a useful tool when transferring over to triple-play. “We have agreements with most of the major content providers such as Orbit, Showtime and Star. It's just a case of expanding that agreement, and of course bringing additional content.” Etisalat in the UAE is also transforming its network to an NGN, using equipment from Huawei and Alcatel. Mohammed Hassan Omran, chairman of the operator, calls the move the ‘revival of the fixed network.’ “Fixed networks all over the world have witnessed some kind of slowing down over the last several years and this includes the UAE because of mobile services taking over. Fixed lines have reached saturation point in many countries, not only in the UAE. But now [we are aiming to generate] more usage on the fixed lines [and] are deploying an NGN, which can offer voice, data as well as video. We intend to introduce it on a larger scale in the UAE, especially in the new areas of developments where we are going with new networks.” Etisalat’s chief engineer of NGN planning, Mohammed Yousif Al Ramsi, says that the operator realised the limitations of its previous network. “We realised that the PSTN was not growing, it is designed mainly just for voice,” Following a tender in late 2003, out of 10 bidders, Huawei and Alcatel were selected for initial trials. The trial deployment involves a softswitch — the control element — and the media gateway, which can interface NGN subscribers to original TDM subscribers. Omran claims that in offering the customer triple-play services Etisalat can revive the fortunes of its fixed line network. Like Qtel in Qatar, it has the advantage of previous experience in television broadcasting. “At Etisalat we are in a better position because we own e-vision (the cable television broadcaster) and e-vision will be used to provide the video service. So the NGN will be able to deliver high-speed data and voice. Our aim is to expand e-vision using DSL because it is cheaper than fibre. We are experimenting using DSL [for television]. This is the way we have to develop the market.”||**|||~|thunman200.jpg|~|“When a customer switches to fibre, they’ll never go back. The question is will they switch because there is a lot of talk of being able to do TV over DSL. It’s like eating soup with a fork, you can do it but becomes really messy and that is basically what triple-play over DSL is like. Whereas on fibre you have a lot of capacity, 100MB, a Gigabit, basically unlimited capacity in the infrastructure.” Martin Thunman, CEO of PacketFront.|~|Omran says that broadband connectivity at home will not just be for internet usage. “You should be able to use it for online gaming, home shopping and other services.” Etisalat’s NGN network rollout began in 2005. “We established a small network earlier and we are expanding it. I expect that before the end of 2006 a big portion of the network will be based on NGN.” In Jordan, the first steps were made towards introduction of full-triple play services with Jordan Telecom’s Livebox. This voice-over-IP commercial service, launched in late 2005, provides residential DSL customer with both voice and data. Alcatel, one of the major suppliers championing triple-play technology, integrated and deployed the solution, responsible for the Livebox project’s overall system integration. Fellow Frenchmen Netcentrex were also involved, supplying applications components. Luc Savage, the Jordanian incumbent’s chief strategy officer, claims that the operator was able to make the transition to VoIP via state-of-the-art convergent technologies and new the introduction of a new regulatory and licensing regime in 2005. “In a second phase deployment, Jordanians will also benefit from video connectivity.” Vincenzo Nesco, Alcatel’s Middle East VP, says the move to the next stage of services should be trouble-free. “This contract will make the transition to triple-play in the near future effortless.” While the Livebox does not yet incorporate video, Luc Savage believes that VoIP calls will be something of interest to Jordan Telecom’s subscribers. “I think that every ADSL subscriber will be interested, at some stage, in this product. At this point we see VoIP as being an aggregation of the internet and any other application, which can be sound, music, data or video. Voice is simply another application of the internet.” Savage acknowledges that similar products have been available across the world previously. “We have just brought the innovation here. We know about Skype, we know this type of service provider is offering services on a global scale, and we are saying that we can bring something to the market that uses the benefits of VoIP, so we are bringing to local markets services that have been provided by companies like Skype globally.” Jordan Telecom’s strategic partner France Telecom launched its own Livebox offering a year earlier than its Middle East investment, and Savage says the experience of its European partner has been very useful. “It is very important to have the experience of our strategic partner France Telecom, which launched it one-year before we did, in order to benefit from of all the technical issues that occurred during the launch of the product in France. So we could leverage significantly on France Telecom’s experience.” In Saudi there are clear signs that triple-play over DSL is on the horizons. Saudi Telecom Company (STC), the kingdom’s incumbent and largest operator in the Middle East, has turned to Alcatel, Cisco Systems and Lucent Technologies to create a state-of-the-art broadband network. Saudi has previously been slow on its uptake of broadband technologies, but this partnership will give STC an extra 250,000 DSL lines by mid 2006, covering 75% of the KSA. Alcatel has received the largest chunk of the contract and will deploy a total of 170,000 DSL ports, the largest DSL contract in the region in terms of ports. According to Michel Rahier, president of the French supplier’s fixed communications business, a route is being made for triple-play. “The Middle East is a key area for broadband development, with large increases in the number of broadband subscribers, and a clear path towards triple play,” But while these operators move towards triple-play, utilising their existing copper cables to push more services to their subscribers, some suggest that the bandwidths needed for a true customers experience are not available. An alternative deployment is fibre, which, like DSL, is being used extensively across the world. In the US, one of the countries with the highest consumer demand and competition in terms of television and video offerings, the two main operators are investing huge amounts in fibre rollouts. Both SBC and Verizon have massive fibre plans, SBC bringing fibre-to-the-node with its Project Lightspeed initiative and Verizon taking it all the way into the home with its FiOS network. The move is not coming cheap for these operators. SBC has already allocated around US$4-US$6 billion for Project Lightspeed. But, as argued by those in the industry, if it is to compete it must offer the same as the rivals, whatever the cost. SBC’s fibre rollout gives it 20-25 MBs, enough to deliver not one, but four streams of TV programming, including high-definition TV, ultra-fast broadband internet access and VoIP – all on a common IP network platform. While there may not be the same consumer demand or competition in the Middle East to require such bandwidths, fibre is still making an appearance in the region. In the UAE, Dubai Internet City (DIC) last year signed a deal with PacketFront, a Swedish-based provider of open access fibre-to-the-home (FTTH) technology, to build the free trade zone’s triple-play FTTH environment. Having conducted a series of extensive test and pilot projects over a two year period, DIC selected PacketFront’s technology to provide its customers with an extensive selection of triple-play services, including TV, telephony and high-speed internet. “FTTH has taken off in Europe and is also seeing interest in Japan and the US,” says PacketFront CEO Martin Thunman. Thunman is confident that fibre provides a far more attractive offering than DSL. “When a customer switches to fibre, they’ll never go back. The question is will they switch because there is a lot of talk of being able to do TV over DSL. Even if that is possible, there are still a lot of challenges. It’s like eating soup with a fork, you can do it but becomes really messy and that is basically what triple-play over DSL is like. Whereas on fibre you have a lot of capacity, 100MB, a Gigabit, basically unlimited capacity in the infrastructure.” But compared with DSL, fibre is expensive to deploy, requiring the time consuming and costly practice of roads being dug up to lay the wires. The Middle East’s vast amount of new developments could be a more efficient beneficiary of fibre, but for the construction already erect, DSL might be a more cost-efficient method of delivering triple-play. In Italy, FastWeb, seen by many in the industry as the model for all triple-play providers, began an ambitious plan in 1999 to provide FTTH across Milan, digging up around 2,500 kilometres of the city. However, after the city rollout was completed, FastWeb decided to use DSL. The operator, which has now deployed DSL to cities all over Italy, found that the capex costs were in DSL’s favour at US$500 per subscriber as opposed to US$700 for fibre. Despite using the different technology, FastWeb found it could offer exactly the same to its customers, needing a bandwidth of 4MBs to offer its on-demand DVD-quality videos. While it may be a serious amount of time before competition in the Middle East telecoms market ever reaches the levels in Europe or North America, if at all, it seems the regional operators are taking note of the technologies deployed in the advanced markets to combat any threats on their fixed-line subscriber base. With the interest and investments being made in NGN networks, and moves towards fibre, it shouldn’t be too long before operators are offering full triple-play services to their customers. ||**||

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