|Issue:||North America 2005|
|Topic:||Transforming communications: fixed-mobile convergence|
|Title:||President and CEO|
|Organisation:||Siemens Communications, Inc.|
Andy Mattes is President and CEO of Siemens Communications, Inc. Before assuming this position, Mr Mattes served as President and CEO of Siemens Information and Communication Networks, Inc., the US arm of Siemens ICN. Based in the company’s US headquarters in Boca Raton, Florida, Mr Mattes is also a member of the global Group Board of Siemens Communications. Mr Mattes had served earlier on the ICN Group Board with responsibility for ICN’s Enterprise Networks business unit, as well as ICN manufacturing and logistic activities and regional responsibilities for Germany, Europe and Latin America. Mr Mattes has also served as President of the Enterprise Networks division at Siemens ICN. He has held various sales and management positions throughout the company and was responsible for international sales at Siemens Private Communications Networks. Mr Mattes holds a degree in Business from the Ludwig-Maximilians University in Munich, Germany.
Today’s communications services let people stay in touch, conduct business, access information and be entertained, but the devices, applications and networks people use to communicate, access data and view entertainment are essentially islands. Fixed-mobile convergence, or FMC, is merging fixed and wireless networks to eliminate these islands and provide easier access to voice communications, voicemail, email, video or other services regardless of the device used. FMC should be common by 2006-2007; by 2010-2012, fixed/wireless convergence should be largely complete.
The communications services available today offer unprecedented opportunities for people to stay in touch, conduct business, access information and be entertained. Many of these services, though, are delivered through a set of fragmented network domains, which leads to inconsistent and inefficient user experiences and network-centric services that can actually inhibit collaboration within groups and the effectiveness of individuals. Many of us have had the experience of using multiple devices that operate within separate network domains. For example, you could have two laptop computers, one for work and another for personal use or a laptop for work and a desktop PC at home. Maybe you have two mobile phones–one for personal use and the other for work–each operating through a different service provider, and you also have a PDA or some other handheld device. There is a good possibility that all or many of these various devices have different interfaces and operate in separate network domains, making it much more difficult for you to enjoy seamless communications, check your voicemail and email and access the same information regardless of which device you are using. The current communications environment is about as fragmented as it could be. Many businesses have traditional communications systems, wiring and phones but are moving to converged voice-data infrastructures that use IP systems and IP phones. There are three different types of wireless networks, each supporting different mobile phones. Communications and computing devices live in different domains so it is difficult for them to interoperate. The devices, applications and networks people use to communicate, access data, and view entertainment are essentially islands. Many service providers that operate fixed-line and mobile communications networks today–faced with the challenge of retaining customers while limiting the impact of price erosion and new competition–are exploring how they can use their networks more efficiently in order to save money and offer innovative, IP-based multimedia services that are independent of fixed or wireless network delivery. To that end, many service providers are merging their fixed and wireless domains into a single entity, often referred to as ‘fixed-mobile convergence’ or FMC. This enables the convergence of services across fixed and mobile access points and devices. Because FMC supports a wide range of wireline and wireless technologies, protocols and devices, users can enjoy much easier access to voice communications, voicemail, email, video or other services regardless of which device they’re using. By merging these different network domains, service providers will finally be able to deliver on the long-time promise of ‘anytime, anywhere’ communications. FMC is designed to allow users to communicate and access information in a uniform way regardless of where they are or which device they are using. FMC, in effect, enables the creation of a seamless world, where the boundaries between private and public networks–both wireline and wireless–disappear. The user experience in this communications environment is unified; an individual can use any device on any network for any application. Convergence will likely have a profound impact on business operations, consumers, government agencies, professional organisations, educational institutions and society at large. Among the potential benefits for business users and consumers are cost savings, improved productivity and better collaboration. The improvements in productivity are made possible in part by ‘presence-aware’ applications that let users know if others are available to communicate at a given time–whether they are using wireless or wireline networks, public or private networks. Other potential benefits for customers include: √ Single-number and multi-mode handsets to consolidate multiple user accounts, special devices, and calling features such as voicemail; √ Bundled services that offer convenience and reduce the overall cost of services; √ Single billing for more convenient payment; √ Enhanced multimedia services for more effective communications, improved productivity and higher entertainment value; √ A shift toward presence-based, multimedia communications such as instant messaging, online chat, push and talk, video, and instant conferencing. FMC has the potential to transform markets. Think of the impact of more efficient communications on industries such as healthcare, transportation, retail and insurance, to name a few. Healthcare professionals would be able to stay in better communication with hospitals, clinics and patients. Researchers, technicians and sales people in the field would have easier access to data from a variety of mobile devices. In many industries, collaboration among employees, consultants, suppliers, customers and other business partners would be dramatically improved by FMC. Businesses whose employees are increasingly mobile have the potential to be much more productive by doing away with ‘phone tag’ and duplicate voicemail and email messages. There are also potential benefits for consumers. An individual could have one phone number, one contact list, one calendar, one voicemail, one sign-on, and one monthly bill. Along with the delivery of traditional voice services, network providers could deliver enhanced entertainment content to customers anytime in any location and on any device. FMC is designed to enable consumers to access video-on-demand, television and other broadband, interactive IP-based services from a multitude of devices. For example, in Portugal with FMC delivering multimedia, multi-channel coverage of the Euro2004 Soccer Tournament, subscribers were able to watch the games whether they were home at work or on the road, and were also able to place bets. Customers of communications services will not be the only ones to benefit from FMC. Service providers, by unifying their network environment, may reduce operating expenses and capital expenditures. They may also be able to cut the cost and time-to-market for introducing new applications, and increase average revenues per user. In addition, providers will have an opportunity to increase customer retention through the bundling of services, greater ease of use for services, and seamless user-experiences. FMC will also enhance the ability of service providers to offer advanced multimedia services that can generate incremental revenue. Finally, network operators who partner with other wireline and wireless operators will have the chance to establish a nationwide footprint for residential and business service offerings. FMC has the potential to improve service providers’ return on investment (ROI) and return on assets (ROA) by establishing a single network infrastructure for delivery of common services. It can help incumbent wireline carriers better compete with newly emerging cable-based voice over IP (VoIP) carriers by allowing the wireline carriers to bundle their wireline and wireless assets. Service providers can also bundle capabilities and services that match the needs of different sectors, such as banking, manufacturing, healthcare and insurance. Realizing the potential benefits to customers and themselves, most of the large network service providers–including AT&T, BellSouth/Cingular, SBC, Time Warner Cable, Bell Canada, Sprint and Nextel–are already taking steps to achieve FMC. Convergence is taking place at many levels. IP-based broadband networks will change the way we communicate, work and play. For example, SBC and BellSouth are deploying IP Centrex business communications for their customers, and Cablevision is adding 1,000 new subscribers each day for its VoIP service. The use of IP-based services is spreading rapidly and has dramatically hastened the convergence of communications platforms. The network operators who are able to incorporate convergence as the cornerstone of their business strategy–and can execute FMC–are likely to be successful. Those wireline or wireless operators that fail to deliver on this strategy risk being reduced to marginal, specialized operators with limited future growth. Heavy Reading, an independent market research firm in New York that focuses on telecommunications technology, in December 2004 published an extensive report on FMC predicting that the 2006-2007 timeframe will be critical to FMC technology and service development. The report, based on interviews with key service providers and equipment vendors, and an online survey of more than 100 service provider professionals worldwide, reflected service providers’ belief that FMC will make the transition from theory to reality during this period. The report predicts that in the core network, the boundaries between fixed and mobile technologies will be largely dissolved by 2010-2012. In backbone networks, the study says, FMC is driven mainly by the universal migration to an all-IP network, in which many of the core subsystems are identical across the boundary between fixed and mobile networks. Service providers are taking a fairly optimistic view of FMC, the report observes, and for the most part believes that it is going to bring fundamental changes to the structure of telecommunications markets. To be successful with FMC, the Heavy Reading report advises, communications equipment and service providers “will need to focus sharply on the specific convergence needs of particular market segments, with a commitment to tactical adoption of technologies to meet those needs where necessary”. The industry will also “need to adopt highly flexible platforms that can be adapted to emerging requirements and can help to realize the long-term vision of access-aware devices and access-neutral networking”. Clearly, service providers will face multiple challenges in their efforts to achieve convergence. Many providers will need to: √ Choose which standards to adopt; √ Determine how to develop a multi-service architecture; √ Create pricing models for new services; √ Develop services geared toward specific industries; √ Draw from multiple sources of innovation to ensure they can deliver innovative services; √ Make the most of their existing network assets; √ Provide sufficient security for all business and residential services. These are not minor considerations. For example, the absence of adequate security technology designed to protect networks, data and privacy can itself be a showstopper for FMC opportunities. The technology challenges for providers will not be trivial, but the huge organisational and process issues involved in convergence will likely overshadow these issues. Service providers will need to identify synergies between marketing, applications, services and content. Even with these challenges, the trend toward FMC seems inevitable. Converged networks offer a plausible and exciting resolution to the biggest communications challenge we face: fragmented networks, protocols and devices. The communications environments of the past and present are no longer adequate for meeting the needs of early 21st century computing and communications. It is only in a truly IP-converged, broadband environment with standards-based platforms and end-user empowerment that seamless unification becomes possible. This would represent a world where there are no longer artificial boundaries between fixed-line networks, mobile networks and cable networks. There would no longer be a need for multiple email boxes and voicemail boxes. People will not be forced to learn how to use different interfaces in order to access their information and communicate. This trend toward convergence has enormous implications for individual users, business, the economy and society at large. Converged IP-based broadband networks will dramatically address many of the nation’s challenges, such as reducing healthcare costs and improving delivery, protecting national security, and providing a more satisfying quality of life. The potential for more efficient and effective communications appears limitless. It is up to all of us in the communications industry to help realise that potential.