by CIO Staff

Next-Gen Networks to Stir Telecom Market

Jun 08, 20062 mins

Next-generation networks (NGN) will have a radical impact on the telecom market, especially when it comes to pricing strategies, according to a new report from Ovum.

Dan Bieler, research director at Ovum, said NGNs will create new dynamics for the information and communications technology (ICT) marketplace.

“As a rough time frame for OECD countries, we expect NGNs to be in place by around 2012 for fixed and 2020 for mobile infrastructure,” he said.

The fundamental difference between NGNs and today’s network is the switch from current, “circuit-switched” networks to “packet-based” systems.

Italy’s regulator AGCOM defines an NGN as “a packet-based network able to provide telecommunication services and able to make use of multiple broadband, QoS-enabled transport technologies, and in which service-related functions are independent from underlying transport-related technologies.”

“We view the migration from circuit-switched to packet-based networks as a logical progression of the drive towards IP,” Bieler said.

From a financial perspective, one of the most direct implications of the move to NGNs is a shift in capital spending.

Opex, meanwhile, is likely to remain fairly stable initially, before offering some cost reduction potential, mainly through more efficient network management, according to Ovum.

In operational terms, Bieler said issues such as QoS and interoperability are obviously crucial to the rollout of NGNs.

While voice over IP (VoIP) will take center stage, he said outside of a private network, it remains basically impossible to control the quality of service of VoIP.

Ovum says there is no clear regulatory framework concerning NGNs on either side of the Atlantic—or anywhere else, for that matter. Every European country is working on its own approach to NGN regulation, covering the entire spectrum from non-intervention to tight regulation.

On an EU level, the debate remains focused primarily on the implementation of the new regulatory framework, rather than an NGN-specific solution. In the United States, the debate focuses on net neutrality, and a “regulation-light” approach seems to have gained the upper hand.

Bieler said the key regulatory issues surround numbering, law enforcement (that’s bugging) and universal services.

“NGNs will no doubt have fundamental implications for business models and pricing,” he said.

“But the most challenging task could turn out to be bringing together the worlds of IT and telecommunications.”

-Sandra Rossi, Computerworld Today (Australia)

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