Getting convergence right

The mobile phone community is confident about the future, despite the economic crisis. With real convergence now a reality, they should be right. Look at it this way: if it’s easier to communicate, it’s also easier to get out of the doldrums.

The Alcatel-Lucent stand: demonstrating just what can be done with a fully converged network

During an economic downturn, this becomes critical. For the first time in ten years, sales of new mobile phones have fallen. The ARPU – average revenue per user, the gauge of revenue an operator can expect to make off each customer – is falling as well, as people cut back on mobile telephony and operators cut prices rolling our ever more attractive offers. The steady annual increases which have fed this industry so far can no longer be taken for granted.

Against this backdrop, the mobile companies are busy plotting their course. This includes not just the big mobile phone makers, the organisations producing the network equipment the services run on and the mobile operators themselves, though these are there in force. It also includes the software developers with the applications that run on the networks, the companies that supply the databases they need and much, much more.

Out of all this, a number of clear strands emerge. In the current economic climate, some of these are obvious. Green telecommunications is one. The logic is simple. First, more energy-efficient equipment means less greenhouse gas is generated. But there is another aspect, equally important: greater energy efficiency also means lower operating costs. With pressure on revenues, this takes on added significance.

This effort is a multifaceted one: Alcatel-Lucent, for example, is working on the development of mobile base stations powered from alternative sources of energy. Clearly, this means that there are no emissions and now recurrent energy cost. The main driver, however, was the need for fully stand-alone units to take mobile services to areas far from any electric distribution grid.

Traditionally, base stations in remote areas have been powered by small diesel generators. This is clearly not an ideal situation: diesel supplies need to be regularly topped up, and of course generate a lot of CO2 along with electricity.

Demand for such alternative, self-sufficient base stations comes from developing countries seeking to extend mobile coverage into difficult areas like desert. But not only: they are also being put to work in countries with a mature infrastructure, as a valuable and practical solution in remote, mountainous areas through which running power lines is an uneconomic exercise.

But Alcatel-Lucent is not just working on these lines. Tim Krause, Chief Marketing Officer told the press during a briefing session on 17 February 2009 that the company has run trials of a new dynamic power save feature with China Mobile: “Circuits that are not in use are switched off, but power up fast when they are needed,” he explained. A simple capability, but one which can deliver 30% saving in power consumption.

In other developments, Alcatel-Lucent’s Bell Labs is also looking at what needs to be done to reduce the power consumption of base stations in other ways. The focus as moved to cooling requirements. Maintaining the equipment at the correct operating temperature takes a lot of power for cooling, especially in hot climates. So any savings here should yield substantial benefits.

By changing the physical design, structure and layout of components Bell Labs believes it can get much more cooling through passive means, just as buildings can be built to reduce the need for heating or cooling systems.

Eco-friendly telecoms may hit the zeitgeist of the moment, and throw in cost savings to operators in a welcome bonus. But the main focus of the World Mobile Forum is solidly on service improvement and the shape of the networks of the future – and on the sort of services that can be created.

On the technology, the buzz is all about LTE (long term evolution) networks, the successor to the 3G networks now deployed across Malta and, indeed, in the rest of the world. Along with LTE, there is also end-to-end IP – and this is, if anything, of much greater interest.

The LTE promise is a vast increase in the bandwidth available on mobile networks. This means that there is so much more that can be done: multimedia, virtual reality, you name it, all this is on display at the stands at the Mobile World Congress. They do grab attention, but looking more closely the real value promise is not these bright and beautiful demo applications. The real value lies in the way they pull together different networks – wireless and cable, say – pull information from one or a number of devices, and then organise delivery to, quite possibly, another device.

In Alcatel-Lucent’s demonstration, the carrier was a live LTE network. And the demo works: the new, 4G network delivers the goods. It delivers lots of bandwidth. Yet even more exciting than this is the use of the IP protocol throughout the network.

What this means is that any device can share information with any other, as long as both are capable of handling IP – the internet protocol. And they can do so on any network, fixed or wireless as long as it can transport IP data. This is a big deal: from the operator’s point of view, IP costs less per unit of data. But from the user’s point of view, it enables a whole range of converged services.

This is the essence of Alcatel-Lucent’s reorganisation, as outlined by the company’s President, EMEA Adolfo Hernandez. It involves the French American organisation concentrating on LTE as its mobile technology of choice, on end-to-end IP networks and on WiMAX as its fixed wireless solution, a replacement for DSL.

The company is discontinuing some of the older technologies, while retaining capability on a number of the more recent legacy systems that are still in widespread use. It also looks to create entry points into the IP network for some of the older systems.

Importantly, it is also proposing a new business model. Currently, the network operators provide the means of transport for data, Mr Hernandez explained. On to of that, application providers deliver services and value. Yet revenues are not distributed evenly throughout the system, he said: the two layers share a very small connection.

To increase that connection and even out the distribution of value, he outlined a new business model that leverages the information within the network to allow applications to deliver more valuable services.

“A website operator only knows when a user visits the site itself; the network operator always knows when a user is online,” he said. And the network operator has, simply through the functioning of the network itself, a lot of information about the subscriber.

In the new business model, a third, enabling layer is introduced between the other two. In this layer, information from the network is extracted and delivered to the application provider, allowing highly personalised services to be delivered – and bringing the network operator back into the value chain.

With one proviso – this use of information may fall foul of privacy and data protection laws. So, Mr Hernandez explained, the services need to be opt-in, while the way Alcatel-Lucent is exposing this information to third parties does so without identification. That stays with the operator, effectively creating a filter that protects sensitive data from misuse and developing a chain of trust.

Alcatel-Lucent’s demonstration highlighted just these services on its stand, and running it all off an end-to-end LTE network to show that the promise of that speed is in fact real. The show stopper is a virtual reality demonstration: impressive, it simulates a visit to Paris. But the excitement of this demo is in the way information has been pulled together from different devices, delivered  over both fixed and wireless infrastructure, and then returned, providing navigation to the user, information about the city, and adding the capability to share that, and make purchases.

The LTE provides the bandwidth this needed. The ability to get the many different devices to work together is the result of the use of IP throughout the network.

Virtual reality is not a service Alcatel-Lucent is suggesting is ready for real time use, though its time may come. It was demonstrating how an all-IP network, with enough bandwidth, can be used to provide real, value added services. For example, a user may choose a film to watch while waiting for a taxi – and then has the ability to shift it to a screen in the taxi, and again to the home TV. Photos can be viewed on the home TV screen, transferred via a home IP hub; when a call comes in on the fixed line, all phones registered on this home hub ring.

The network can also be configured to take note of the user’s preferences: but Alcatel’s solution continues to give the user control: what information is to be shared and how has to be set. This allows considerable personalisation: ads will be delivered according to preferences. And of course, the user gets the option to buy and pay for the things he likes – with each of these further developing the profile.

This has been demonstrated for a home environment, but many of the features have considerable application to the SME market, and this is not taking the opportunities to do business over the converged networks.

Many telecoms operators have said they will not be looking to investing in LTE just yet, since their 3G networks still have life left in them. GO is likely to hold back as well, but already operates a network capable of handling IP services throughout, Brian Micallef, the company’s Product Manager – Broadband told me. His position covers both wired and wireless broadband as a single service.

There is little need to increase the bandwidth while there is still a lot of spare capacity left, he said. And many of the converged services do not require the high bandwidth LTE can provide; those should work on current networks.

But he pointed out one other issue with the adoption of LTE: more spectrum is needed, and the telecoms industry is waiting for it to be freed. Until that happens, Mr Micallef said, investment in LTE is unlikely.

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