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The delivery and proliferation of new IP-based personalised services

Rafi MaorIssue:Europe 2006
Article no.:10
Topic:The delivery and proliferation of new IP-based personalised services
Author:Rafi Maor
Title:President and CEO
Organisation:ECI Telecom
PDF size:124KB

About author

Rafi Maor became the President and CEO of ECI on January 1st 2006, having served previously as its Chief Operating Officer. Mr Maor brings a wealth of experience in management of global technology companies. Prior to joining ECI, he spent nine years at Indigo NV, where he served as President and Chief Operating Officer (COO). Following the acquisition of Indigo by Hewlett Packard, Mr Maor served as General Manager of HP/Indigo Division and Vice President at HP Corporate with worldwide responsibility for the product line. Previously, he spent 20 years with Israel Aircraft Industries where he held increasingly senior managerial positions. Rafi Maor holds an Engineering degree from Tel Aviv University and is a graduate of the Advanced Management Programme at the INSEAD Business School, France.

 

Article abstract

The future of today’s telcos depends upon the Internet Protocol, upon IP networks. Competitors, the cable and wireless service providers, are capturing telco subscribers, eroding their core voice business. With IP networks, and ‘triple play’ voice, data and video, telcos can offer a full range of services to rival those of their competition. IP-based services such as Video on Demand and network Personal Video Recorders, give telcos the edge they need to hold their subscribers.

 

Full Article

Operators are looking to new services to provide revenue-generating opportunities as well as reduce churn. At this time, it is premature to definitively identify which specific applications and pricing models will be the winners and losers. However, several trends have clearly emerged: - Revenue-generating services based on service bundles, which will include video, voice and data (triple play) over fixed and mobile networks and devices; - In order to gain subscriber adoption, these services will need to be more personalised as well as be delivered ‘on-demand’, enabling users to watch what they want, when they want it; - These services will need to be delivered via IP, as they will be bandwidth-intensive. The competition is intense as telco service providers and cable operators are now reinventing themselves to keep competitive and reduce churn. In this process, networks are being transformed into universal IP networks to deliver access-agnostic, on-demand, and personalised services. These ubiquitous services are also being deployed over an increasingly wider range of access media and devices. Large telcos have been deploying video-enabled access platforms that allow them to offer competitive video services. Recent RBOC activities have also demonstrated carriers’ commitment to massively roll out video-enabled networks and video platforms that allow them to compete with cable providers. It all relates back to reducing churn and remaining competitive. Those providers that can offer an a la carte menu of on-demand services, regardless of bandwidth velocity, will be the innovators that drive market adoption with a new generation of personalised services. Some services are already having a significant impact on the market and changing the entertainment experience. For example, IPTV is becoming an essential part of the services bundle. Although IPTV requires a great amount of capacity from networks, providers are responding to subscriber demand for broadcast video over the Internet. Personalise, personalise Recent new service deployments of Video-on-Demand (VoD) and Personal Video Recorders (PVR) by cable operators are challenging telcos’ basic service offerings and are contributing to increased churn. However, the hierarchical, bi-directional nature of the telco network provides an important competitive differentiator, since it allows these networks to support the delivery of personalised services and make a new level of user experience available, enabling users to watch what they want, whenever they want! Unicast personalised video services (e.g. VoD, nPVR, Pause Live TV) are becoming increasingly important in relation to regular multicast video services as competitive differentiators. These services bring additional functionality to end users’ service experience, which eventually will help reduce churn lost to cable and satellite TV, increase subscribers’ "stickiness" to the telco’s proposition, and increase Average Revenue per User (ARPU). For example, the market opportunity for PVR enables telcos to effectively respond to competition. A PVR enables users to watch any type of TV content on demand. It is expected that user penetration will reach 40 per cent by 2010. There are two forms of PVR services: network-based PVR (nPVR) and customer-located PVR (local PVR). A local PVR has internal storage and functionality within the user’s own separate PVR (e.g. TiVo) or set-top-box, nPVR servers, though, are deployed in the telco’s network to record the content transmitted by the TV channel. The world of nPVR opens exciting possibilities for the telcos, in terms of offering innovative services to its customers and competing effectively against cable operators and satellite providers. Users have become increasingly sophisticated, and carriers need to understand that the quality of the IPTV experience will be the determining factor in swaying customers’ loyalties. nPVR brings additional value to users, with advanced features and functionalities not available in local PVR products. nPVR also brings integration with all standard IPTV features. However, nPVR involves a more complex business model than the simple local PVR consumer device. Telcos need to establish a valid business model for this upcoming service. Additionally, telcos can distribute content to video servers deep in the network, thus alleviating the need to run huge amounts of bandwidth across the core and transport networks. In large deployments, this approach enables nPVR to reach more subscribers. nPVR provides carriers with a differentiator necessary to win the video battle. Because this is still a market in its infancy, there are still pending questions as to the best architecture for service deployment. Carriers need to weigh the expected service penetration, estimated bandwidth requirements, particular network architecture and cost considerations when deciding where to deploy nPVR. Ultimately, users will choose the services that are cost effective, convenient, and enhance their TV viewing quality. While industry forces are moving towards this direction, there are still business model hurdles they need to overcome in order to realise this vision. However, the trend is clear, on-demand services will, with time, replace traditional broadcast TV. Personalise towards IP While the operators are sorting out which services to offer, the delivery of service bundles will be constantly available using any convenient access media. This is already possible over wireless or wireline, copper or fibre, from the local exchange or from a street cabinet. Additionally, video services are now available on any device – be it a TV, a PC, a Mobile TV or a video phone. Personalisation will also need to adhere to the requirements of each device. For example, watching a sports event over a mobile device, a SD TV or HD TV requires different, device-specific, content and trans-coding functions somewhere in the network. Additionally, addressable advertisements need to take into consideration the targeted user, the device, the time of day and the actual content consumed. Every device must deliver services that are on-demand as well as personalised for each individual subscriber. Providers need to begin thinking of services as integrated bundles. This will require changing, migrating, various elements of their existing infrastructure to accommodate IP. These services will become fully automated as well as easy to install and manage. This is where the revenue will be generated, so providers need to start network planning now to support the future of personalised service creation and service delivery. New value-added services With the adoption and full-scale proliferation of IP, consumers benefit with new value-added services that can help improve entertainment and convenience factors immensely. The ‘new-generation’ telecom company will succeed and earn revenues if they recognize the market opportunities and manage to introduce a new wave of personalised and on-demand services. They will also need to integrate triple play (video, voice and data) capabilities as part of their service offering. For example, Caller ID access while watching a video over the Internet will retain customers and increase ARPU. The availability of a high-speed Internet connection is not enough anymore. The telecom market is evolving toward converged IP networks for seamless quality of experience. These converged IP networks are about service delivery. As operators and carriers are evolving from transmission ‘pipe’ providers to service providers and beyond, the networks are required to evolve, as well, from basic infrastructure for carrying traffic to service-enabled networks. Quality applications Service providers must also design their network infrastructure to support the delivery of high-speed, quality applications, regardless of what they are or how they are billed. Service provider network evolution must tie into existing Internet backbones. In addition, incorporating service intelligence is required and must coordinate with a variety of access networks and new service delivery networks. These networks will support service enablement, service provisioning and multi-service convergence for multiple users, multiple content providers and multiple services. To achieve this transformation, the new network infrastructure needs to include advanced subscriber management systems that incorporate presence and industry standard interfaces. In urban areas, increasing penetration of broadband enables carriers to provide end users with a more compelling bundle of services, delivering true television-Internet convergence for enhanced entertainment and communications. When defining residential subscriber bandwidth requirements, service providers need to take into consideration three more factors: The simultaneous use of services, the simultaneous use of appliances, and the proliferation of peer-to-peer services. For the consumers to get these new personalised services, telecom operators need to be innovative and deploy the necessary infrastructure, today, to support additional capacity, advanced services and new subscribers. This evolving network infrastructure, migrating towards an all-IP environment, is the key to delivering the new personalised services that will provide the competitive edge for gaining and keeping subscribers.

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