Author's Picture Issue: EMEA 2008
Article no.: 14
Topic: Meeting the demand
Author: Paolo Susnik
Title: CEO
Organisation: Tiscali International Network
PDF size: 185KB

About author

Paolo Susnik is the CEO of Tiscali International Network BV, (TINet) a Tiscali subsidiary focused on delivering IP Transit and MPLS services to wholesale carriers and service providers worldwide. Prior to TINet, Mr Susnik worked directly with Tiscali founder Renato Soru on the start-up and development of Video OnLine in Prague, Czech Republic. Mr Susnik also worked for IBM at the Digital Audio Video Council – the International Committee for the standardisation of interactive television. Paolo Susnik earned a degree in Electrical Engineering.

Article abstract

The growth of Internet traffic driven by demand for bandwidth intensive applications and content is a worldwide trend. User generated video content is surpassing even business generated traffic. The number of users has also grown and the addresses available in the current version of the Internet, IPv4, will run out within two or three years. Although service providers are working to increase broadband quality and availability, little has been done so far to move to IPv6, the next generation Internet.

Full Article

Given the exponential growth in new IP based services, it is no surprise that today’s carriers are facing unprecedented market conditions. Demand for IP services in the emerging markets of Middle East, Eastern Europe and the Far East is both a lucrative opportunity and a challenge for carriers. The growing number of consumers wanting faster online speeds such as those provided by xDSL has meant that service providers are faced with a greater demand for connectivity and the pressure on available bandwidth is growing. IP Service drivers The year 2007 was said to be the year of social networking, but its popularity continues to grow. Sites like Facebook, Bebo and MySpace have driven, literally, millions of consumers online. In the US alone, between 2007 and 2008, there has been an estimated 77 per cent increase in the number of monthly visits to Facebook, now totalling over 325 million visits per month. The growth of social networking is one of the reasons why service providers have seen the demand for broadband connections soar. Dial-up connections to the Internet, along with those distinctive modem sounds, could soon be consigned to the annals of history. Broadband has also made it easier for people to upload and share content they themselves have generated, on specialised sites. One of the leading online video sites, YouTube has seen the number of videos uploaded rocket, and with larger sized video files come the demand for bandwidth. On a more ominous note, broadband has also fuelled illegal movie downloads, all adding to the bandwidth pressure. Broadband penetration in many highly populated countries is well below the global average and growing exponentially; this puts great pressure on the local service providers to support faster throughput broadband services. The widespread use of mobile phones has also played a part in encouraging consumers to go online. To promote the range of valued added services available on mobiles, wireless operators have introduced competitive data charges, in some instances even flat rate tariffs, which allow users to browse and download unlimited amounts of data over the mobile Internet. Riding the social networking wave, a growing number of operators use sites like Faceboook and Bebo when advertising the mobile Internet. The much-hyped launch of Apple’s iconic 3G iPhone, is already adding to the boom of the mobile Internet. As 3G mobile handsets become ‘smarter’ many new applications will become available for consumers to access on the Internet over their handsets and usage will shift to bandwidth-intensive applications instead of just emails- the main application of most smart phones today. Online adult content is another important driver of Internet usage. Adult entertainment content generates some of the highest demand rates and its bandwidth requirements are among the greatest. Considering that, it was adult entertainment that helped VHS beat off competition from Betamax and, more recently, help drive payments over the Internet, adult content plays an important role as a driver for technology as a whole. Whilst the access networks can handle the traffic, traffic backhauled at the core network calls for more investment to ensure that the networks can cope with the growing rate of IP traffic. In today’s interconnected world, reliability is not just a buzzword; it is a basic value that carriers must provide. Economic impact Emerging markets, especially Eastern Europe, the Far East and the Middle East, have undergone major economic transformation in the past few years. For these countries, high quality connectivity is vital as their economies are now linked with the rest of the world. Downtime can cost these economies millions of dollars. The Internet outage in Middle East at the start of this year affected 85 million people in the region and is estimated to have cost companies across the Middle East and South Asia between 250 million and 300 million dollars a day. Whilst the incident occurred back in January, there will be long-term effects due to the perceived risk of doing business in the region that will especially affect outsourcing services in the region. This all shows that Internet connectivity is now a fundamental part of the infrastructure of today’s economy along with other essentials like oil, railways and air transport. Not only did this incident demonstrate the need for new resilient systems to be deployed, it also confirmed the need for legislators in the region to take a more liberal approach when issuing non-carrier licenses. Deregulation and competition New licenses should be allowed with the stipulation that part of the capacity is destined for mechanisms that protect the nation’s connectivity. A more liberalised market would foster better competition and increase the system’s resiliency while lowering costs and risks for business and consumers alike. It would also favour meshing different cable systems together to provide each other with a greater degree of protection through technologies such as ASON (Automatically Switched Optical Networks) and GMPLS (Generalized Multiprotocol Label Switching). For example, Jordan’s deregulation has already led to the emergence of new operators, so more choices are now available to users. However, there is a huge contrast between Jordan’s open market and the situation found in several other countries in the region. In the countries where deregulation has been slow, its start is beginning to have an impact and long-standing monopolies are beginning to turn into duopolies. The surge in mobile and broadband penetration will undoubtedly occur shortly, accompanied by the offer of a great variety of new services and application models. This will have a profound influence upon the region’s telecom landscape and lead to a greater convergence of services. IPv6 The growth in Internet has also meant that the available IP addresses are running out throughout the world. It is estimated that in early 2011 IPv4, the current version of Internet Protocol (IP), will run out of IP addresses and providers will have to adopt IPv6. There has been a lot of work done at regulatory levels and the U.S. was due to move their Federal Agencies to IPv6 by the end June of 2008. The European Commission, following up the task force started several years ago, called on public and private sector organisations to switch to the next generation Internet, IPv6, by 2010. One of the immediate challenges facing service providers is the lack of content available on IPv6. So far, most content providers have been reluctant to offer Version 6 content; they feel there aren’t enough IPv6 users. The launch of Google’s IPv6 website marks a significant change in attitude. It should not be long before others follow suit. The networked world Given the challenges, many carriers find today’s marketplace daunting. Agility is the answer in this fiercely competitive industry. Carriers need to quickly streamline their operations and optimise their network design. The processes and support structure needs to focus on fulfilling the requirements for scalability and reach and provide reliable customer support. Given the growth of the Internet around the world, coupled with the increase in broadband penetration, carriers need networks that multiply the Internet’s evolution in reach and service availability. As such, carriers should not just concentrate on markets like North America and Europe; they also need to focus on Eastern Europe, Middle East and Africa. The Internet ecosystem segments which have witnessed the highest growth over the past few years have been content providers and regional broadband providers. Spanning locations worldwide, content providers have driven the growth of traffic with their new, bandwidth hungry, multimedia applications. Carrier backbones need to be designed to transport content traffic with low latency and low packet loss, for high quality delivery of multimedia applications. The telecom industry has undergone many significant industry-wide paradigm changes in the past few years. Online video, social networking and other user generated content services are now driving high volume traffic on the Internet. The continuous increase in the number of broadband customers worldwide, and the growing popularity of mobile Web browsing, have also contributed to the Internet’s growth. In the coming months and years, there will be even more bandwidth hungry applications and carriers and service providers will need to cope with the growing challenge. Internet outage and delays cost economies millions of dollars, so governments and regulators need to consider IP services as a necessity and not simply an add on. Carriers, for their part, need to invest not just in the technology but also in the expertise needed to provide customers with outstanding service. Just as the Internet has evolved, so too do the carriers, if they want to stay ahead of the game in today’s competitive marketplace.