Hélio Marcos Machado Gracioso Issue: Latin America 2006
Article no.: 4
Topic: EoIP and industrial policy in Brazil
Author: Hélio Marcos Machado Gracioso
Title: President, CPqD, and President, CPqD Technologies & Systems Inc., USA
Organisation: CPqD/CPqD Technologies & Systems Inc., USA
PDF size: 184KB

About author

Hélio Marcos Machado Gracioso is the President of CPqD and the President of CPqD Technologies & Systems Inc. in the USA. Prior to CPqD he served as the Director of Research and Development for Telebrás system in Brazil. Mr Gracioso has been with the centre since its conception, working in the digital transmission, optical communication, microelectronics, and technological planning areas. Mr Graciosa has chaired several boards of directors; he is currently the President of the Advisory Board of Telebrasil, and a member of the Council of Telecommunication and Information Technology of the Brazil-Angola Chamber of Commerce. He is also a member of the Boards of Trópico, Algar, Cleartech, Telebrasil, and Fundação Fórum Campinas. Mr Graciosa is a telecommunications engineer and holds a Master’s Degree in Electrical Engineering from the Pontifícia Universidade Católica of Rio de Janeiro (PUC/RJ).

 

Article abstract

The convergence of networks to enable Everything over IP, EoIP, in Brazil involves a series of vital national issues. Changes to Brazil’s regulatory system and its industrial policy are required to support fully the EoIP paradigm. The participation of Brazilian industry in the EoIP Age, through the production of significant high value-added local technology, will help promote changes in Brazil, foster digital inclusion, improve social and economic indices, and generate value and wealth that will circulate throughout the Brazilian economy.

 

Full Article

According to the Organization for Economic Co-operation and Development, OECD, convergence can be viewed from three different perspectives: market convergence; regulatory convergence; and technological convergence, which includes the impact of convergence upon such aspects as content, service, networks and access terminals. The concept of Everything over IP, EoIP, addresses a number of the features of the OECD’s vision including: 4 the integration of different types of Information and Communications Technologies, ICTs, such as transport, access, control and processing; 4 voice, data and image content; 4 services – mobile, fixed, location and presence-based services, both for the distribution and the retrieval of information; and 4 many types of users (different age groups and socio-economic classes, corporate users and government). The interaction of these various forms and features characterizes what we can call the ‘Total Convergence Age’. This new age promises to bring major improvements in service innovation and make it possible to access any type of enriched-content multimedia services (audio/video, entertainment), at any time and any place. In fact, interactive and universal access to entertainment, business, public (education, health and security) and private services, highly leverage a country’s ability to promote economic and social growth as well as regional, national and international integration. In this way, the concept of ‘everybody, everywhere and everything over IP’ is consolidated, improving the society’s quality of life. Brazilian scenario Although the telecommunications sector in Brazil has undergone significant growth over the past years, there is still a gap to fill concerning the availability of access terminals and the variety of services offered. First, when planning infrastructure and ICT investment strategies, it is essential to take into account the purchasing power of the market. Low prices are an important consideration when people acquire products and services in Brazil, given that the purchasing power of the greater part of its population is quite low, and that only a small fraction of the people can acquire higher value services and products. Second, from the service provider’s perspective, and considering the Brazilian reality, it is vital to analyze the technical, economic and financial factors to achieve a balance between investments, capital and operating expenses, and the target return-on-investment (ROI). What is the best service portfolio? Which ‘killer applications’ will assure an adequate ROI? These are questions that have to be answered, given a business environment characterised by a large, low-income population and, accordingly, low average revenue per user (ARPU), which has profound consequences for the business model. Third, a relevant aspect for consideration is the fact that the Brazilian regulatory system is not fully developed to support the new scenario presented by the EoIP paradigm. Therefore, it is crucial that both the regulatory agency’s rules and its scope of action are simplified. The EU’s, European Union’s, new rule system, specified in the 2002/19 to 22/CE directives, is an example of the sort of changes needed to provide a flexible and simple regulatory environment. Finally, it should be noted that the sector’s growth depends upon socio-economic policies and procedures that promote increased digital inclusion, service universalization and appropriate income distribution. Moving towards EoIP: initiatives and results Considering these social and cultural aspects, the EoIP concept introduces a new paradigm that can cope with the challenges of the Brazilian context. More important, changes in the technological paradigm also represent opportunities for an emerging country to take advantage of the new wave and improve its profile as a services and goods supplier. Similarly, as in the 1980s, when digitalization allowed the development of Brazilian technology and telecom equipment, the new IP wave provides fresh opportunities to be explored. We can forecast the need for the deployment of a wide range of new infrastructure facilities that will be required to implement the coming EoIP network, as well as the need for the legacy network transition towards this new network paradigm. For all these reasons, it is crucial that Brazil: 4 Constitute industrial policy guidelines that reflect the new reality of the sector; 4 Create instruments to stimulate innovation; 4 Establish a package of incentives that foster the development of local industry in technologies according to the EoIP concept; 4 Extend and leverage the local industry, based on worldwide best practices and successful commercial and technological cases, to guide the business operations and deployments of Brazil’s large-scale telecom service providers; 4 Offer confidence regarding the future and the continuity of the evolution of these technologies within a medium- to long-term period (2006-2016). 4 Open channels to facilitate the exportation of this technology to marketplaces around the globe. There are initiatives supported by the Brazilian government, such as the CONVERTE Project, which aims at developing technologies and solutions that allow the Brazilian industry to become a global player in Next Generation Networks, NGN, and services for Fixed-Mobile Convergence, FMC. This is achieved by using state-of-the-art architectures such as IP Multimedia Subsystem, IMS, and developing products such as Soft-Switches, Application Services and Signaling Servers, SS7, Management Systems and Value-Added Service, VAS, Platforms, which compose the NGN infrastructure, the basis of the EoIP concept that will be used by the fixed and cellular telecom service providers, legacy and converged, worldwide. Among the results of the initiatives described above, it is important to highlight the following. 4 The creation of innovative local solutions will allow a gradual migration to the future network structures that will provide EoIP in a manner suitable to Brazil’s reality. This will maximize past investments and guide the present investments towards this new concept. 4 The increase in the presence of Brazilian technology in telecom networks offering new services for both users and service providers, and a rise of almost 50 per cent in the participation of Brazilian technology in the control of connection traffic. Nowadays, Brazilian technology controls connection traffic of up to 45-billion-minutes per month within the Brazilian public telecom network. 4 The preservation of investments through innovative solutions for the migration to next generation networks, that co-exist with and evolve from the legacy network. 4 The opportunity for local companies to participate in the development of solutions to complement the technology of the CONVERTE project, so that the products from several companies can be included in EoIP solutions. This will help spread the sector’s core competences, strengthen Brazilian industry and help the sector derive benefits from the resulting technological partnerships. The initiatives mentioned above help promote the acquisition of know-how related to technologies in strategic sectors that is currently possessed by only a few companies worldwide. They involve innovative architectures with interfaces, and protocols that facilitate the inclusion of high value-added services (mainly software and systems-and-solutions engineering intelligence). It is important to emphasize that the acquisition of strategic technological know-how is not a simple matter; it requires profound understanding of a wide variety of subjects. These include the methodologies needed to develop solutions, product technologies, highly complex software systems, international standards (ISO, CMMI) certification and utilization of the best practices found in the sector to manage large projects for technological development. EoIP is more than a technological concept; it is the reason behind the drive for industry-wide convergence. IMS, FMC, copper-based broadband access technologies (xDSL), fibre-coax (HFC), and wireless (WiFi, WiMAX, 3G, 4G) are just some of the technologies that are structural parts of the converged network’s foundation. The converged network makes EoIP possible and EoIP makes the convergence of the ICT, media and entertainment industries possible. The introduction of the EoIP concept requires extensive planning and involves a wide variety of matters that cannot be neglected or underestimated: 4 Business modeling, business processes, and customer care, so that the customer perceives the delivery of services to be a seamless, converged whole; and 4 The engineering of solutions, especially regarding the interoperability of networks and systems, and with regard to the in-depth analysis of the evolution and migration of legacy networks to next generation technology. The participation of Brazilian industry in the EoIP Age, through the production of high value-added local technology, will promote changes in Brazil, foster digital inclusion, improve social and economic indices and generate value and wealth that will remain with the Brazilian society.