Authors include: - Connect-World
Authors include: - Connect-World
Authors include: - Connect-World
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Triple play<br />
Last chance for telco profitability: triple play networks<br />
by Kevin DeNuccio, President and CEO, Redback<br />
TraditionalfixedvoicetelcosfaceseriousthreatsfromIP-basednetworks:growthand<br />
perminuterevenuesaredeclining,andmobileservicecompetitionhascapturedclients.<br />
BroadbandIP-basednetworksletacarrierusesinglehighqualitytripleplaynetworksto<br />
carryalltraditionalvoiceanddataservices,provideVPNs,video,gamesandahostof<br />
otherpersonalisedservicesaswell.Telcosneedtoconsolidatetheirnetworkstooffer<br />
usersanarrayofcost-effectivetailor-madeservicesviaabroadbandIPinfrastructure.<br />
KevinA.DeNuccioisthePresidentandChiefExecutiveOfficerofRedback.Heservedpreviouslyasthe<br />
SeniorVicePresidentof<strong>World</strong>wideServiceProviderOperationsatCiscoSystems,wherehewasresponsibleforallfieldactivitiesintheserviceprovidermarketplaceglobally.DuringhistenureatCisco,Mr<br />
DeNuccioalsomanagedworldwidefieldoperations,includingallsalesandengineeringsupportorganisations.BeforejoiningCiscoSystems,hewasthefounder,PresidentandChiefExecutiveOfficerofBell<br />
Atlantic Network Integration, a wholly owned subsidiary of Bell Atlantic, now Verizon<br />
Communications,responsibleforcorporatestrategyandoperations.MrDeNucciohasalsoheldsenior<br />
managementpositionsatbothUnisysCorporationandWangLaboratoriesasVicePresidentintheir<br />
networkintegrationandworldwidechannelpartnerbusinesses.<br />
KevinDeNuccioearnedhisdegreeinFinance,fromNortheasternUniversity,andgraduatedfromthe<br />
ExecutiveMBAprogrammeatColumbiaUniversity.<br />
Advances in IP (Internet Protocol)<br />
equipment, rapidly increasing broadband<br />
penetration and growing residential<br />
broadband capacity are revolutionisingthedeliveryofservicesvia<br />
broadband. Interactive television,<br />
voiceandnextgenerationonlinegaming<br />
services are rapidly becoming a<br />
reality,duetobreakthrougharchitecturesthatdelivertheseservicesatdramaticallylowercost.<br />
Historically, telecom operators have<br />
dedicated entire networks to single<br />
services. This means that telecom<br />
operatorsneededanetworkforvoice,<br />
anotherforleasedlines,oneforVPNs<br />
(virtual private networks), one more<br />
for Internet access, and so on. With<br />
thegrowthofbroadbandandIP,acarriercanbuildasinglenetworktocarry<br />
alltheseservicesandmore,especially<br />
since the quality of service end users<br />
demand is now available using IP<br />
networks.<br />
Dialtonebroadband<br />
Similartothealways-availabletelephony<br />
dial tone, many carriers are<br />
preparing their networks to offer a<br />
‘dial tone for broadband’ service that<br />
will bring broadband service, by<br />
default, to every household. This<br />
broadband connection will provide<br />
anynewserviceaconsumerrequests.<br />
This gives residential and business<br />
users access to a wealth of services,<br />
rangingfromVPNstovideo,togames<br />
or voice. Eventually, when greater<br />
bandwidth is available, virtual reality<br />
based applications will be accessible<br />
overbroadbandconnections.<br />
Thetelecomoperator<br />
perspective<br />
The end user sees a virtually endless<br />
streamofIP-basedcapabilities.What,<br />
though,doestheadventofbroadband<br />
IP applications mean for the telecom<br />
operatorHowcanatelecomoperator<br />
use these technologies to position<br />
itselfforhealthygrowth<br />
Voice,thecorebusinessoftraditional<br />
wireline telcos, faces serious threats<br />
fromIP-basednetworks.Voiceservice<br />
growthhasbeenslow,perminuterevenues<br />
are declining and competition<br />
frommobileserviceshasdrainedfixed<br />
traffic.<br />
A few years ago, the volume of data<br />
traffic, mostly Internet access, surpassedthatofvoiceontelconetworks.<br />
Consequently,theInternetProtocolis<br />
now the dominant network protocol.<br />
Analysts predict that Video-over-<br />
Broadbandtrafficwilleventuallysurpassvoiceanddata.<br />
Today’s competitive world is a challenge<br />
for telcos. They face shrinking<br />
voice revenues and need to generate<br />
new revenue, but income from<br />
Internetaccessserviceshasbeenlow,<br />
and often barely profitable. Internet<br />
accesspricesareexpectedtodrop,so<br />
whatcanthetelcosdo<br />
Thetwoobviouschoicesareeitherto<br />
selllowcostaccessandtransportorto<br />
offercontentandbecomeafullservice<br />
provider.Thefirstoptionrequiresthe<br />
telco to pursue the lowest possible<br />
costsforreliableserviceandbecomea<br />
costleader.Thesecondoptioncallsfor<br />
adding value to its access and transport<br />
services to increase its Average<br />
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