Early adopters of NGN

The deployment of next-generation networks (NGN), using the Internet protocol (IP) to support fixed, wireless and mobile voice, video, data, and broadcast television services, is expected to provide new opportunities to increase consumer choice.

Although ITU has defined NGN (see box), views still vary and operators and vendors that have begun the process of development or migration have different claims and definitions. In the Republic of Korea, Korea Telecom uses the name BcN (Broadband convergence Network), and plans to have an entirely IP-based network by 2012. Telekom Austria aims to do the same by 2009. In Canada, Telus and Bell Canada have also announced plans to implement NGN, as well as Sprint and Qwest of the United States, and Italy’s Telecom Italia. Japanese carrier, NTT, is building an NGN and developing ubiquitous broadband services.

BT rolls out NGN

In the United Kingdom, BT has named its NGN the 21st Century Network, to which it transferred the first customer lines in November 2006. The firm’s first NGN customers live in the village of Wick, near Cardiff in Wales. By the end of summer 2007, around 350 000 households in the area are expected to have joined them. BT will then review the project before moving (from early 2008) to the planned national upgrade of all remaining customers across the United Kingdom — some 30 million lines supported from over 5500 telephone exchanges. There is a forum where regular consultations take place with all other operators in the country, so they can understand and influence BT’s plans.

"Big ideas usually start with simple thoughts," BT Wholesale Chief Executive Officer Paul Reynolds, said at ITU TELECOM WORLD 2006, commenting on his firm’s first NGN system. "BT’s 21st Century Network programme started life as a simple thought — BT would transform its business, eliminate cost and complexity and make life simpler and more flexible for our customers," Mr Reynolds explained.

BT says that the new network will deliver voice, data, broadband and multimedia services, more quickly and cheaply than before. These include a new generation of broadband with speeds of up to 24 Mbit/s — three times faster than those currently available for most UK customers. The company’s move to an all-IP network is estimated to cost around GBP 10 billion.

Broadband policy matters

NGN evolution may differ between developed and developing countries because of access and affordability, since these remain pressing issues in the developing world. NGN development is expected to flourish in countries with robust broadband policies or extensive broadband penetration. In these countries, mainly in the developed world, consumer demand for high-end, innovative services is matched only by limitations on bandwidth.

Meanwhile, countries such as India, Pakistan and Malaysia have adopted facilitative broadband policies, making these markets ideal candidates for NGN migration.

What users want

How people pay for services is also influencing demand for NGN. Consumers want simpler billing systems that cover everything they receive through the network, and more personalized services of a higher quality. Demand is being fuelled too by increasing communication across national borders for both personal and business purposes, requiring high performance, widely available, secure voice and data services.

Business users are already looking for flexible, virtual private network (VPN) solutions. Future demand is likely to focus on innovative services and network intelligence — security, storage and ways to support better integration of their networking and information systems.

Operators seek savings and efficiency

Among the factors driving operators to migrate to NGN is the growing competition in old markets and newly liberalized ones. Falling revenues from voice calls (and the multiplicity of networks that can deliver them using VoIP technology) are prompting operators to convert to a fully IP-based architecture (see The future of voice).

Traditional fixed-line carriers have generally been the leaders in broadband Internet access using digital subscriber line (DSL) technology. But they are faced with pressure from competitors such as mobile operators, new VoIP providers, or wireless carriers, as well as from cable television networks that can now support bi-directional IP-based services.

In Romania, for instance, competitive pressure from cable television operators has led the incumbent to modernize its network and decide to move towards NGN. In anticipation of joining the European Union on 1 January 2007, Romania passed legislation in 2002 that includes a general authorization regime. Its resulting regulatory framework promotes competition in infrastructure, with cable television operators offering triple-play voice, Internet and television services at the equivalent of EUR 9 per month.

Convergence and growing competition have made traditional operators invest in common IP-based core infrastructure. These investments will eventually lead to savings, through reducing the cost of running different networks while increasing the products offered and thus (potentially) the number of subscribers. Operational efficiencies can also be anticipated.

Many paths, one goal: to bridge the digital divide

Despite dramatic advances in telecommunications in many developing countries — particularly via mobile telephony — major disparities remain in providing Internet and broadband services. For example, most African countries have yet to launch high-speed Internet services, although a few, such as Morocco, offer broadband services of up to 20 Mbit/s and Sonatel in Senegal has rolled out a triple-play service bundle offering voice, Internet access and television programming. Most mobile operators have 2G (second-generation) networks. Some of these are being transformed into 2.5G or GPRS (general packet radio service) networks, but, for most people in the developing world, mobile broadband services such as GPRS and 3G are still out of reach.

Service providers in developing countries are aware of the potential cost-saving efficiency of NGN and in Brazil, India and Viet Nam, for example, they have announced plans to migrate to core NGN. Projects for FTTx (fibre-to-the-home or other building, or to the curb or node) are also being undertaken in such countries as Bangladesh, Brazil, Pakistan and Viet Nam in anticipation of moving to NGN, although they are mostly concentrated in highly populated, high-income areas.

South Africa is to host the 2010 Football World Cup. In preparation, it is capitalizing on advances in 3G and digital migration to ensure that every mobile phone in the country can receive mobile television, while visitors from around the world will be able to use mobile multimedia services to send images and video footage of the action at South African stadiums.

The technological innovations that can be leveraged when migrating to NGN such as Wi-Fi or broadband wireless access (BWA) technologies are already changing the way universal access is being extended to rural and remote areas in both developed and developing countries. In Mongolia, for example, rural areas are being given spectrum free of charge for WiMAX and Wi-Fi in order to improve Internet access.

India’s Telecom Regulatory Authority has recommendedmeasures to de-license spectrum in the 5.1 GHz and 5.3 GHz bands and to earmark additional spectrum bands that are not in high usage for deployment of BWA networks.

The Dominican Republic, which has already launched 3G services, plans to introduce WiMAX soon. Its state-of-the-art operators use soft switches, with other operators still offering services based on circuit-switched systems. The road to NGN may take many paths. But developing countries also have certain advantages in the migration process to NGN. Compared to more developed markets, service providers in the developing world generally have fewer legacy products in their core networks (for example, ISDN, IP, ATM, FR, and SHDS). This makes it easier for them to "leapfrog" to all IP-based systems. Limited deployment and penetration of copper networks, and the falling cost of fibre, can also facilitate "greenfield" deployment of FTTx projects. In some developing countries, the absence of complex access-based ex ante regulations also means that there are fewer regulatory commitments to consider.