Broadband World Forum, Paris, October 27, 2010 — Stephen Carter, chief marketing and strategy officer for Alcatel-Lucent (Euronext Paris and NYSE: ALU), today outlined proposals to modernise broadband networks, access pricing, and service provision to meet growing online demand from telecommunication customer across Europe and beyond.
In a speech to the Broadband World Forum, Carter identified significant challenges facing the broadband industry for all players in the distribution, device and network markets. Carter called for reforms and a new “eco-system” of infrastructure systems and pricing models amid forecasts by Alcatel-Lucent that the total number of Internet-enabled wireless devices will grow in urban areas from 400 million to many billions by the end of the decade.
He said that new models were required to handle a market in which estimated daily traffic on internet-enabled mobile devices could rise by a factor of a thousand – from 8 megabits per smart-phone to more than 8 Gigabytes by the middle of the next decade.
Alcatel-Lucent anticipates such demand will increase exponentially in what Carter termed “a totally immersive third age, where users are permanently connected to a virtual world of predictive digital services.” He told delegates at the annual broadband forum that the broadband provider sector is facing “The Big Squeeze”.
The forum heard that a combination of flat fees and steep demand is clearly commercially unsustainable and broadband providers are in a situation today where the vast majority of the traffic is Internet based while the vast majority of the revenue is derived still from voice-based telephony.
As part of a reform programme, Carter suggested ways in which broadband providers must deploy, and employ, new ways to package and extract value from networks.
“There also needs to be a new eco-system of pricing – one based on new pricing mechanisms for user centric services, partnership with third parties, and the increasing visibility of what he describes are ‘living intelligent networks’,” he added.
Carter emphasised that broadband is critical not only for consumers but for a nation’s industries and economic well being. Beyond the obvious benefits of ITC driving more efficiency and higher value services and solutions and productivity, he said broadband is ceasing to be the preserve of the telecoms industry and is critical for multiple industrial applications.
Delegates at the Broadband World Forum were urged to recognize the need for a broader, more horizontal mindset working with power companies, transportation industry, government and public safety organizations and others to embed communications at the heart of their operations.
By doing so, communications could become the ‘oil’ that drives other industries. Future Broadband World Forums could, as a result, attract as many attendees from outside industries as communications service providers.
A Call to Action for of European Governments
Carter called for communications industry players to recognise that such reforms could not be undertaken in a piecemeal fashion. Changes were needed in regulation, in investment, in coverage, in capability, and in the provision of value added services needs, he said.
Without such reform, Carter predicted Europe would face greater challenges than the United States in moving to the next generation of capability.
“In many cases European networks were either historically inherited or funded by the public purse, or in the case of first generation and second generation mobile networks, geographical exclusivity or market access was a price paid for freely allocated spectrum,” said Carter. “Looking forward, the European fundamentals in broadband look unclear. There are sectoral regulatory uncertainties, macro fiscal uncertainties, and fundamental questions that Europe and its institutions need to answer about whether and how it becomes an economy of scale.”
“Europe needs to defend and define The European Way,” Carter continued. “We need to develop a system traditionally based on social cohesion, strong public services, where societies celebrate their distinctiveness but recognize that a single market and Connected Trading Policies, and the European Single Currency are necessary to serve to make Europe stronger.”
“We need to define what the critical applications that are distinctively European. We need to clarify the role and investment path for the infrastructure that will be needed. We need smart regulation and a digital framework, not just a telecoms framework. We need to identify the path from product security to privacy to digital confidence and we all need to live in an open source world, and in order to truly change lives rather than just the meaning of words, we need to close a chapter in the broadband story,” Carter concluded
Stephen A. Carter is Executive Vice President of Alcatel-Lucent and Chief Marketing, Strategy & Communication Officer and is a member of the Alcatel-Lucent Management Committee. Prior to his current role, Stephen A. Carter served as the Minister in the UK Government for the Communications, Technology & Broadcasting Sector, where he was the author of the Digital Britain Report, and the follow-on Digital Economy Bill.
Before that he held a variety of Senior Executive roles in the Media and Telecommunications industry including Group Chief Executive of Brunswick LLP, founding Chief Executive of Ofcom (the UK Communications Regulator), Managing Director of NTL UK & Ireland, Managing Director & Chief Executive of J. Walter Thompson UK Limited.
Alcatel-Lucent (Euronext Paris and NYSE: ALU) is the trusted transformation partner of service providers, enterprises, strategic industries such as defense, energy, healthcare, transportation, and governments worldwide, providing solutions to deliver voice, data and video communication services to end-users. A leader in fixed, mobile and converged broadband networking, IP and optics technologies, applications and services, Alcatel-Lucent leverages the unrivalled technical and scientific expertise of Bell Labs, one of the largest innovation powerhouses in the communications industry. With operations in more than 130 countries and the most experienced global services organization in the industry, Alcatel-Lucent is a local partner with a global reach. Alcatel-Lucent achieved revenues of Euro 15.2 billion in 2009 and is incorporated in France, with executive offices located in Paris. For more information, visit Alcatel-Lucent on the Internet: http://www.alcatel-lucent.com, read the latest posts on the Alcatel-Lucent blog http://www.alcatel-lucent.com/blog and follow us on Twitter: http://twitter.com/Alcatel_Lucent.