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Tuesday, 11 April 2006 08:29

Mobile operators eying DSLAMs

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This article is also available here 

Also see
Vodafone contemplates $A65 billion writedown
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Vodafone does the global splits

When the inevitable consolidation of Australia's multiple DSLAM networks takes place those operators looking to sell lout at a good price, or receivers/administrators trying to optimise returns for creditors might find a willing buyer from an unlikely quarter: Vodafone or even Hutchison.

For many years Vodafone has made much of its pure-play mobile focus and has spent billions building and buying networks around the world to create a truly global mobile player. But as recent reports have highlighted, cracks are starting to appear in this mighty edifice.

Similarly Hutchison has built up a portfolio of 3G networks around the world. However these are more individual businesses with common ownership than arms of an integrated global operation, like Vodafone.
If the scenario of these companies getting into the fixed broadband business seems unlikely, look no further than a report from Europe from Light Reading.  It claims that: "Pure-play mobile operators such as O2 plc and Vodafone Group plc are set to enter the fixed-broadband fray in Europe, and are sizing up local loop unbundling (LLU) options that would see them procure and deploy their own DSL equipment."

Citing un-named industry sources, Light Reading continued: "Vodafone is set to follow the example of fixed-line competitive operators by procuring and deploying its own DSLAMs, potentially in multiple territories. The mobile operator has had presentations from at least one major vendor, the world's leading DSL equipment maker - Alcatel - and has likely been briefed by others."

Alcatel for one appears to be in no doubt that the likes of Vodafone be will getting into the DSL business if they want to survive. At the company's two day Asia Pacific regional press briefing held in Sydney last month one senior Alcatel executive, Dave Hills, put it quite bluntly: "In my view the days of the pure play mobile operator are numbered." And as Alcatel's director of global market positioning he should have a pretty good handle on the market.

It's probably too early to start counting those days, but the driver for this statement can be summed up in one word: convergence. All the major vendors have been pushing the idea from different perspectives for several years. For Alcatel it was "user-centric broadband" (and until recently the role of mobile was played down somewhat). For Motorola it was "Seamless Mobility":...more

Also see Vodafone contemplates $A65 billion writedown
and don't miss
Vodafone does the global splits

 




Alcatel sums convergence up today as "giving users whatever service they want, anywhere, anytime without them having to worry about how it is delivered." But it is actually much more than that: it's also about giving users unprecedented control over the what, where, when, to whom and how.

One example given by Alcatel was of a mobile phone user, directing a movie trailer to be delivered to a friend's cellphone as part of an interaction around seeing the movie together. It might sound trivial but the networking complexity too deliver, and equally importantly bill somebody for this, is enormous.

Until recently it was not all clear how the vision of convergence was to be achieved across disparate networks provided by different vendors, but the recent rise of something called the IP Multimedia Subsystem (IMS) has changed all that. It has defined the functional units of converged networks and services and means by which they communicate: so operators can buy IMS compliant hardware and software from different vendors to support different services, and ultimately bring all these together into a converged network offering converged services.

In this scenario there will still be scope for niche operators, but anyone wanting to play big time will need to have access to and be able to deliver services across both fixed and mobile networks.

It's worth noting that in this sense Telstra is one of the best placed carriers in the world: not only does it play in just about every sector of its market, it is also a very significant if not the major player in each of these markets. This is where there is potential for Telstra and this is the vision being pushed Sol Trujillo and his amigos, although of course making the transition will be far from easy.

But if Telstra is half way successful that will be bad news for major competitors like Vodafone and Hutchison that remain mobile only plays.

And if you need more evidence that Vodafone is determined to be in the convergence game, look no further than our report of this week's announcement of a global split into three functional units, one of which will "focus on converged and IP services in order to deliver new revenue streams as Vodafone seeks to provide innovative services to its customers."There's a limit to what you can converge even on today's mobile handsets, and equally a limit to what consumer want converged onto a device they carry in their pocket with a small screen.
Any true converged  offerings will have a very significant fixed line component.

 

UPDATE: The day after this article was written, Reuters reported Carphone Warehouse, Europe's top cellphone retailer, announcing plans to offer British customers free broadband Internet connections as part of a phone services package under a strategy to "transform itself from a high-street retailer into an alternative telecoms operator".

According to the report, Carphone is installing its own equipment in about 1,000 telephone exchanges to cut its dependence on former monopoly BT and expects to complete the process by May 2007.

Reuters reported that "Carphone hopes to quickly gain a critical mass of customers and mount a serious challenge to market leaders BT and recently merged NTL as it offers customers a "triple play" bundled package of line rental, unlimited voice and broadband.
 

Also see Vodafone contemplates $A65 billion writedown
and don't miss
Vodafone does the global splits


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