 | Issue: | Latin America II 2003 |
| Article no.: | 12 | |
| Topic: | Manifestations of Convergence | |
| Author: | Mr Helmut Leopold | |
| Title: | Director Product and Technology Management | |
| Organisation: | Telekom Austria AG | |
| PDF size: | 144KB |
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Article abstract
Digital communication technology lets one transmit voice, data, and images using the same network. This technical convergence is revolutionising the information and communications industries and driving economic convergence, blurring the boundaries between traditional ICT markets. Convergence has created new forms of communication that personalise mass communications and massify individual communications and is forcing regulatory convergence to deal adequately with these hybrid means of communication. To ensure interoperability of equipment and services, the ICT sector is striving to develop open standards.
Full Article
The past decade has seen revolutionary changes in the telecommunications industry. First, digital communication technology facilitated service integration. Then, the liberalisation of the telecommunications industry stimulated competition within the sector. However, the emergence of the Internet caused the greatest impact on telecommunication networks by allowing voice and data traffic to converge. Convergence Convergence is a dynamic phenomenon. The main drivers for convergence in the communication market are technology, economy, and regulation. These factors working together trigger convergence, the process that is transforming the communication industry. There are several types of convergence – technical convergence, economic convergence, communicative convergence, and regulatory convergence – and one should not confuse the manifold manifestations and effects of this phenomenon. Communicative convergence is a term that we will discuss later. Technical Convergence Information services have long been delivered customers by many means including copper wire, coax cable, wireless, satellites and the like, each with its own CPE, Customer Premise Equipment – telephones, fax machines, set-top-boxes, caller ID receivers, satellite receivers, modems, routers, hubs, switches, computers, sound systems, game consoles, television sets etc. These are connected by kilometres of wiring and a host of interfaces. Today, the industry is moving towards packet protocols. The PSTN, or Public Switched Telephone Network, is based on switching technology. The PSTN is being replaced by packet-based technologies such as Frame Relay, Asynchronous Transfer Mode, and Internet Protocol. In the past, different networks were needed for each type of usage. Now, one converged, packet based, network – a Next Generation Network or NGN – can carry all sorts of traffic including voice, video and new interactive multimedia applications. Technical convergence, shown in the following illustration, has had a tremendous impact on the whole communication industry. The differing nature of voice and data networks challenges the operators of traditional switched network. Voice traffic is rather predictable, needs little bandwidth, and requires real-time end-to-end transmission. Conversely, data traffic is likely to be erratic, needs high (broad) bandwidth, and does not necessarily depend on real-time delivery. The older Time Division Multiplexing circuit switched networks were designed to carry voice traffic, not for efficient data traffic. Network operators are now facing the challenge of transforming their circuit switched networks to more cost efficient packet switched networks. Incumbents are also being forced to move to packet based networks to compete with mobile and wireless operators and, as well, with the new service and network providers spawned by deregulation. Network convergence is already rather advanced, but the convergence of CPE end devices is lagging. Integration of end devices such as computers, television sets and telephones into a single CPE has not yet happened, although a wide variety of devices are already in use, particularly for wireless communications. Technical convergence is taking place, but until user devices can handle it, convergence of applications such as infotainment (information plus entertainment) will be slow. Technical convergence is the convergence of networks and end devices, and the interchangeability or merging of differing network platforms, on the one hand, and the movement towards multifunctional end devices on the other. Economic Convergence Economically, communication markets are driven by new services. Nowadays, voice communication, television, radio and other network-based services can be delivered over various fixed or wireless networks based on an ever-increasing variety of technologies. The crucial challenge for operators is to provide attractive services at reasonable prices in order to compete. Economic convergence describes the merging of the telecommunication, broadcast, and information technology sectors. The monopolies that controlled telecommunication markets throughout Europe and the world have largely vanished or been transformed over the past ten years. The broad based transformation of the market has resulted in the convergence of value chains and the jockeying between players, sometimes competing and sometimes cooperating, depending upon the advantages to be gained. Many of those below are likely, for instance, to form strategic alliances, joint ventures, or merge. · Inter-eXchange carriers (IXC) · Incumbent Local Exchange Carriers (ILEC) and Competitive Local Exchange Carriers (CLEC) · Cable Television (CATV) service providers · Satellite service providers · Internet service providers (ISPs) · Content providers · IT businesses · Many other emerging service providers (e.g. island solutions based on disruptive technologies) Some of these have managed to establish nearly a global footprint, whereas others work in niche markets. Global payers include the European based Kirch Group, the U.S. based AOL and Time Warner or Worldcom, among others. In addition, the convergence of industries – as with broadcasting, telecommunications, IT, and the consumer electronics industry – stimulates a complete new economic framework, and interplay, among these players. Convergence offers opportunities for cost efficiencies, but it also intensifies the threats of competition. Convergence allows companies to compete in, and be exposed to competition in, a number of sectors simultaneously. Communicative Convergence Communicative Convergence describes the impact on consumer behaviour resulting from the increasing number of possibilities for communication. In the past, there was one-to-one communication, or telephony, and one-to-many communication, referred to as broadcast. Today we have many-to-many, many-to-one, and many-to-one-to-many. The explosion of the Internet in recent years has increased competition and changed the global economy. The increased competition in the global economy, in turn, has changed the way people communicate. People now want to be selectively connected, anytime, anywhere via any device, in other words, they want personalised and context based ubiquitous services. Context-based means that services, applications, will respond according to the location, preferences or situation of the user. Digital communications convert any information – be it voice, data, images, or video – into digital packets. Since one digital packet is like any other to the transmission medium, video, voice, and data can all be transmitted together simultaneously. Terminal equipment separates the packets and converts them back into their original format. This makes possible a number of new communication services such as near-video-on-demand and true-video-on-demand, data–broadcasting, home shopping and home –banking, chat rooms, newsgroups or blogs and e-commerce. These services are commonly referred to as multimedia services, a term describing services based on digital technology combining elements of different kinds of information and permitting interactivity between consumer and product or among users. New forms of communication are emerging that permit the personalisation of mass communications and the massification of individual communications. These new services occupy a space halfway between individual communications such as telephony and mass communications such as broadcasting. Regulatory Convergence Until now, each communications market has been regulated separately. Current regulations, which distinguish between individual and mass communications, though, will not serve in a telecommunications universe characterised by convergence. Until the regulatory questions are resolved, innovation of products and services will be held back. Technical, economic, and communicative convergence are now forcing regulators to consider regulatory convergence. Regulatory convergence does not mean that general legislation can be applied to the entire sector, nor that regulatory convergence can be directly derived from technical convergence. Regulations for digital communications will have to depend upon politically determined goals for the good of society. The changes in the regulatory process have already started; some countries, for example, have merged their telecommunication and broadcasting regulatory authorities into one. Convergence of Standards A standard is a specification for hardware or software that is either widely used and accepted (de facto) or is sanctioned by a standardisation organisation (de jure). While many informal standards become bona fide standards approved by recognised standards organisations such as the IEEE or ANSI, some of the most widely used are de facto standards. Intel’s and Microsoft’s standards are obvious, de facto, examples. To ensure the interoperability, modularity and flexibility of services, the network, content, and service providers are striving to develop open standards for broadband media services. Standardisation groups meet on a regular basis to improve existing standards, incorporate technological developments into current standards, agree on next steps, and anticipate further developments that might affect standards. The three main categories of communications standards are: · Telecommunication standards · Broadcast standards · Digital technology standards There are many challenges involved in standardising advanced services, especially when different industries must co-operate. Although broadband media and IP standards are rapidly developing and frequently enhanced, incompatible proprietary streaming-media technologies still exist. Similarly, not all content creators have adopted the digital distribution strategies required for delivering broadband media services. This is changing, as more large media conglomerates are co-operating with content providers to provide digital content to consumers. Approaches to Convergence Constantly changing network standards and infrastructures, different access network technologies and uncertainty as to which value added services will emerge in the future, make it very difficult to have a CPE architecture that fits everything. Consequently, the CPE has to be flexible and contain core features to support current services and be able to accommodate future upgrades. Flexible architecture is crucial for CPE in the cost sensitive consumer market. Open architecture is a general trend in the industry. It began in the computer industry and then gradually expanded to the telecommunication industry. The broadband CPE industry is likely to adopt open architecture as well. This would facilitate new services and competition and lead to lower CPE cost, quicker time to market and even innovation. Hardware and software architectures should both be opened, and common APIs (Application Programming Interface) adopted, to permit software to run on different platforms. Over the years, equipment vendors have developed hundreds of advanced services for the PSTN. However, using ordinary telephone terminals, very few services – call waiting, caller ID, three-way calling, etc. – could be implemented. As a result, today’s PSTN can no longer meet the demands of business in an increasingly mobile environment. Next Generation Networks (NGNs) will be able to provide personalised services to people based on time, geographical location, and availability, but more advanced terminals will be needed to take advantage of these services. A huge amount of content will be delivered by broadband media services to businesses and consumers. Specialized user devices will be needed to access this content and enormous storage facilities will be needed to hold and access this content. Researchers are working on the problems of indexing, storage, and retrieval mechanisms for multimedia archives. New ways of indexing and categorising network content will be needed to improve organisation and access to content. Scalability is important in such systems as the computing capacity required is expected to grow. Conclusion The technical convergence that has already taken place is stimulating development by manufacturers and service providers. Technical and standardisation convergence will establish a basis for omnipresent, interactive, mass-market multimedia services via next generation networks. Convergence is changing the framework of the world’s economy and the convergence of regulatory structures will determine how the information society’s telecommunication, radio, and television distribution channels will function.
