 | Issue: | Europe II 2011 |
| Article no.: | 14 | |
| Topic: | Capacity demand – challenging traditional models | |
| Author: | Caroline Ward | |
| Title: | Group Commercial Director | |
| Organisation: | Geo Networks | |
| PDF size: | 287KB |
About author
Caroline Ward is the Group Commercial Director at Geo Networks. Ms Ward has a number of years of board-level experience, gained in organisations including Sun Microsystems and IBM. She joins Geo from Oracle where she was Professional Services Director for a region comprising UK, Ireland, Benelux and the Nordic countries. Prior to this role, Ms Ward held other strategic positions at Sun: Storage Director for UK and Ireland, Systems & Technology Executive for UK, Ireland and South Africa, and Director of Telco & Media for UK and Ireland. Caroline Ward holds a BSc (hons) in Applied Human Psychology from the University of Aston in Birmingham.
Article abstract
Digital traffic is growing aggressively, and network operators are battling to economically meet the demand, but traditional telecoms business models are not designed to support this expansion. Until operators migrate to fibre, bandwidth shortages will occur with increasing frequency and severity. To give businesses the tools they need to develop and expand, network operators need to open up access to their networks, selling fibres to let companies reduce their costs as they grow, and give them complete control over their infrastructure.
Full Article
Mobile network operators (MNOs) recently reiterated their position that content providers such as Google should pay telecoms companies for the delivery of their material to end users. While this question falls under the wider net neutrality debate, it’s evident that internet-related business models are changing. Mobile, wireless and fixed network operators are reinventing themselves to differentiate beyond commodity bandwidth, while media companies are adopting new, consumer-driven technologies including HD, Super-HD and 3DTV viewing. With wireless and mobile traffic doubling year-on-year, MNOs are relying on new technologies such as femtocells to offload the traffic onto their fixed lines, which puts increasing pressure on the fixed line network operators. While they are staving off the immediate pressure with these quick fix solutions, both wired and wireless carriers are effectively creating a fragile environment that won’t be able to meet future bandwidth demands. The way data is provided and consumed has changed, and business models are evolving with this. The enterprise is going mobile, with the rapid and extensive adoption of smart devices such as Blackberrys and iPhones for corporate use. Meanwhile, retail consumers expect mobile phone contracts with unlimited data service as a basic right and mobile operators continue to partner with technology companies to deliver machine-to-machine (M2M) innovation. In order to manage this data explosion, traditional telecom business models need to reflect this new market, protecting and delivering service to these valuable growing markets. Organisations, now more than ever, need their own dedicated networks, controlled, owned and future-proofed by them, in order to support their business strategy. 21st Century business The past seven years have seen a tidal wave of change where the ongoing development of the Internet and ultra-fast networking is forcing a realignment of supply and demand business models. Customers are looking for fundamental change. Rapid development of residential broadband will be needed to offload some of the phenomenal data growth that mobile operator customers are experiencing. Infrastructure to enable innovative new companies to supply content, software and services to the growing numbers of data-hungry consumers is also a priority. The UK has reached a watershed; our copper infrastructure can no longer support the growing needs of today’s data-intense businesses. Copper has reached the end of its useful life, and only wholesale change to the current telecoms business models which can resolve this. Legacy technology and copper Today’s operators will have little future if they rely on copper. Technology can extend the life of copper networks to some extent, but only fibre can fully support the business models of today – and tomorrow. Optical fibre is becoming the UK’s fourth utility, but it relies on an open access marketplace in order for the benefits to be fully realised. To support the demands of its customers, operators need to change their provisioning model. Today’s customers need the flexibility of their own fibre and the scalable bandwidth that it provides. Customers and service providers shouldn’t be penalised for growth by the levy of expensive bandwidth charges when requirements increase, as is too often the case with traditional managed service models. Neither should they be constrained by bandwidth, forced to select and prioritise their critical applications. A new way of thinking Organisations that require data-intensive transit are increasingly moving toward a new ownership model. Customers and service providers are looking to become true proprietors of their fibre network, owning and controlling it as if they were a telecoms company themselves, but without the overhead of having to build their own assets. This new way of thinking eliminates the existing practice of providers locking customers into procuring ‘layer two’ services, such as managed or lit fibre, and for the first time provides access to ‘layer one’ technology, such as dark fibre for example , which the customer can own and light as they wish. This new model puts the customer is in charge; commissioning incremental bandwidth on their own network whenever they need, at a fraction of the time and cost associated with traditional models. All of a sudden, bandwidth is accessible and the total cost of ownership decreases, which is imperative to prepare organisations for growth, both in terms of customers and volume of data. TV and film production is one example of how the industry is rapidly evolving at the hands of customers. These industries have been catalysts for innovation, and have brought about fascinating new technology, such as BBC iPlayer, HDTV and 3DTV. By owning and controlling their own networks, today’s media companies can separate traffic and send different content down different wavelengths. For example, a single dedicated fibre can support up to 480 channels of live content, or the waves can be isolated to send less critical traffic such as non-live content – TV on demand for example – or internal corporate data. Eliminating bandwidth constraints means that for the first time, content deliverers need never compress and decompress traffic. This represents an upgrade in the quality of content output and offers uncompromising quality and freedom for the delivery of live content. Nevertheless, it is not just media companies themselves that need the bandwidth; production and post-production companies are also gearing up for HDTV and require additional bandwidth to deal with file transfers. The financial sector has also adopted the new telecoms business model with ease. Financial institutions are provisioning networks comprising multiple dark fibres, putting them in control of their data and providing a truly future-proofed solution. As mobile banking uptake continues to strengthen, banks are predicting up to 300 per cent ROI (return on investment) according to analysts. The attractiveness of the mobile banking proposition as a way to increase market share will place a strain on networks not poised for rapid scalability. Finally, mobile operators and service providers are under increasing pressure from heightened competition and consumers expecting basic services for free, so service providers differentiate themselves and profit from innovation and value-added services. Barriers to entry continue to drop, and usage patterns are exploding for both search and application service providers (ASPs), both in numbers of users and in network demands from the users. A scalable, reliable fibre backbone is the only solution to meet this data explosion. Additionally, with organisations regaining control and no longer subject to both the long lead times and price increases associated with traditional telecoms models, they are free to scale up and down to suit their needs. This new model represents an exciting and liberating change, providing the UK’s talented innovators with the tools to empower and control their own assets. __________________________________ Operators can extend their networks all they wish using traditional methods such as copper and ADSL+, but until such time as the entire network is fibre-based, bandwidth droughts will occur. Fibre is the stable, future-proof infrastructure of choice, capable of transmitting enormous quantities of data in both directions at the same time. It has no challenger as today’s – or tomorrow’s – transport mechanism of choice. To provide businesses with the tools they need as they develop and expand their operations, network operators need to open up access to their networks, allowing companies to benefit from cost savings as they grow, and giving them complete control over their infrastructure. The last couple of years have been tough economically, and as we move forwards it’s critical the telecoms world adopt a business model that works and supports sustainable commercial growth. We need to be prepared for new and intense network pressures, such as the high definition, interactive services the international community will expect around the Olympics. The UK will not be able to support that growth if we can’t meet the capacity challenge, which is why operators need to not only invest in a fibre infrastructure, but also open up the operational model to allow companies to flourish.
