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Friday, 28 September 2012 08:57

Collaboration key to keeping telcos in the value chain

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Alcatel-Lucent is bringing to Australia an initiative designed to help its telco customers participate fully in the value chain of network-delivered services and applications but one of these - NBN Co - is limited to providing basic carriage services.

Alcatel-Lucent's VP of emerging technologies and innovation, Jason Collins, was in Australia this week to bring the company's ng Connect industry collaboration programme to the Australia and New Zealand markets.

Collins explained ng Connect (www.ngconnect.org) "is about bringing people together and discussing as a group directed collaboration towards one goal...illuminating the things in the network that are important and figuring out what the end user experiences that are possible are."

Alcatel-Lucent announced ng Connect in February 2009 saying it was "dedicated to establishing a rich and diverse ecosystem of infrastructure, devices, content and applications for both mobile and fixed broadband networks...[to] bring the benefits of a seamless broadband experience to mobile phones, computers, cars, gaming systems and more, enabling consumers to stream more content, run more sophisticated applications on-the-go, and communicate in the most popular formats of today, and tomorrow."

It has grown from an initial membership of seven to 180 and, Alcatel-Lucent says: "The key outputs of ng Connect are prototype solutions that consist of expertise and technology from member companies."

In particular, the company's underlying goal with ng Connect is to try and ensure that its major customers - network operators - are not reduced to mere carriage providers with all of the value in the end user service being provided by over-the-top players, like Google and Apple.

"What we are hoping to do is to create a healthier industry ecosystem so all of us can benefit," Collins said. "I am trying to create a local ecosystem here in Australia and New Zealand of people in multiple industries to help us in thinking through those experiences an then building them."

Major US telcos - AT&T, Verizon and Sprint "are all engaging in open innovation," according to Collins. "They are building centres. They are doing this for multiple reasons. They get a marketing showcase...They also do interoperability testing and certification [of new network-connected devices] but more importantly it is about getting new telco products and capabilities into the pipeline so they can improve their time to market."

One way in which Australia's largest telco, Telstra, is trying to maintain its role in the value chain is by investing in innovative applications and trying to facilitate their incorporation into its network, through its recently formed subsidiary, Telstra Application and Ventures Group.

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However overall the Australian market differs significantly from most developed markets in that the 'worst case' scenario depicted by Collins - and spelt out by other Alcatel-Lucent executives at its Technology Symposium earlier this year - is, in part at least, government policy: namely the NBN.

NBN Co is precluded by legislation from playing any part in the provision of value added services. Its role is to provide basic connectively reliably and at the least cost. And it will have a monopoly.

However NBN Co is as keen as Alcatel-Lucent to foster applications that will add value to its network, but of course it matters not to NBN Co whether the providers of those apps are over the top operators or other network operators.

And such is the design of the NBN that there will be multiple roles for network operators. The NBN is an access network only. Any application or service provider must find a means of delivering traffic to all 121 NBN Co points of interconnect if it wants to deliver a national service.

It can do this by building its own infrastructure, by buying capacity from existing network operators, by contracting with an existing service provider to deliver traffic to those 121 points of interconnect, or by simply being a fully over-the-top player and delivering services over the Internet.

This situation could impact the value chain in multiple ways. Very large over the top players, like Google, might well find it more economical to buy bulk capacity to reach those 121 points of interconnect, further eroding the role of present network operators.

Telstra will no longer have a monopoly over the main access network but multiple network operators will compete for the business of application and service providers on a level playing field to provide connectivity to end users via that access network. This could, potentially, result in some innovative and mutually beneficial relationships.

At the very least it should provide scope for some interesting local projects for ng Connect.

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