This month, a radically different theme, aimed at raising your sights.
If you have investigated using a single provider for the various media services into your home (TV, phone, data), you may have noticed that minimum contract periods are increasing. In many countries, the standard period has moved from 12 to 18 months and may soon be 24 months. Why? Because the cost of delivering an ever wider range of services to domestic customers is constantly escalating. Commissioning costs per new customer can run into hundreds of dollars. And that’s not counting the substantial advertising and cold calling costs associated with attracting that new customer.
And commissioning cost is only one of a number of challenges currently facing network providers.
Hardware is an ever increasing requirement. Homes need set-top boxes, satellite dishes, decoders and adapters; carrier exchanges constantly have to invest in new hardware. With the increasing pace of change, cost of obsolescence is a major factor in carrier finance models.
Limited interop – At present, carriers deliver multiple-play services on separate platforms. Each platform is tailored to a specific way of bridging, multiplexing, processing and encoding/decoding of media for that specific service. This approach was necessary for reliable service delivery but is costly and limits interoperability. Introduction of new codecs is costly and painful for the carrier.
Interoperability with other bearer networks is limited to ‘same media, same codec’. This limits opportunity to recoup capital investment for the carrier and gives rise to another two big issues:
Limited market share – Remember the advantages for certain carriers who had exclusive access to the iPhone in the earlier days of its manufacture, or UK Premier League Football. Consumers will go with the carrier that best meets their needs. Limited interoperability means limited access to customers.
Missed opportunities – Codec lock-down and interop limits prevent communications carriers from creating new markets. One day we’d like to think that it will be possible to have a video-conference between a cellphone user, somebody using Skype and somebody using regular telephony (represented by an avatar), all being watched by a fourth party in high-definition TV. Of course all of this will be delivered through disparate bearer networks that interoperate and manage charging. The technology for all of this exists today but cannot be glued together on a large scale.
Or can it?
We think the solution is both very simple and already proven, but may require a major shift in approach from the traditional large carriers; namely, internet technology as the transport mechanism plus software as the delivery engine.
Let’s look at the requirements for this to work:
- stable, fast, highly available broadband to homes and businesses
- end-to-end management of many simultaneous multimedia sessions (voice, video, email, chat, whatever)
- consistent management of different processing requirements for differing media types
- super-fast, efficient routing
- many distributed software components
- minimal specialist hardware
- enough processing power to handle the capacity (cheap enough)
- standard servers (cheap enough)
Does this kind of setup sound familiar? It should. All the above requirements are currently being met in call centers across the world, albeit on a smaller scale, by solution providers such as Sytel. It could be that the future of next generation networks is currently being trialed in a call center near you.
Adoption of such a delivery model brings the advantages of reduced cost and wider choice for both the consumer and carrier.
The cost of commissioning new users and maintaining the system as it grows decreases. Less Capex and less Opex means a substantial decrease in the cost of bringing a new customer online.
The ability to easily plug in a variety of codecs and communicate between them means greater choice for the consumer and instant connectivity between carriers, bringing a fully converged network closer to reality. New codecs can be installed with a minimum of effort as standards or new requirements emerge. The whole system becomes much more agile and fast to adapt, which will be necessary if the larger carriers are to avoid going the way of the dinosaurs.
So what is to stop the call center providers of today becoming the network backbone providers of tomorrow? Well, not much actually. It just takes a little forward thinking by the major players. Welcome to the future.
Whoops, sorry if this got a bit long, but hope you enjoyed the ride!