Technology14.02.2006

Global comms? I would not start from here

The legacy of more than a century of development – which has accelerated in the past 10 years – is a fragmented patchwork of systems, comprising many flavours of fixed and mobile systems as well as Voice over Internet Protocol (VoIP) networks.

The challenge facing operators is to pull all this together to deliver a compelling proposition. The challenge facing users is to decide which system to use and when – many people have a variety of identifiers and numbers: home, work, mobile, BlackBerry, IM, work e-mail, home e-mail, Skype; each offering different services with different user interfaces.

With a choice of 10 or more ways to communicate, the opportunity for confusion is ever present. That is why there is so much attention being paid to the latest telecommunications world buzzword: convergence.

Most operators understand that in an ideal world, their customers would simply decide who they want to communicate with and their preferred method: voice, text, mail, video. The network would take care of the rest, tracking down the contact and determining the best way to route the communication according to location, speed and cost.

What we have instead are number plans and tariff structures that are arcane, complex and increasingly irrelevant. As a result, customers have probably lost all hope that it can one day be simpler. But the changing economics of the internet and particularly the availability of VoIP will challenge traditional perceptions and business models in telecommunications.

Consider that companies such as Skype effectively give away voice calls by piggybacking on the broadband data networks of other carriers. Add the fact that those companies actually underpin the very structure of their businesses with revenue from voice calls.

Indeed, the same basic product, a voice call, delivered via Skype, on a fixed phone line, or over a mobile phone can cost anything from nothing to a few pence to a premium rate.

This shows that it is not just technologies that are converging and competing, businesses and business models are too, giving rise to a situation where a service that one company is prepared to give away another seeks to sell at a premium rate.

Customers of all kinds increasingly look to the operators to help them converge the many services and devices they use into one wholesome solution. Of course, the operators are not starting from scratch with a blank sheet, but given the current set-up, how are they approaching the task of making things simpler?

The traditional telecoms operators are reacting in very different ways to the opportunities and threats that VoIP brings.

Some are choosing to ignore it, continuing in their current direction in the belief that VoIP will remain a niche for the "lunatic fringe". That seems a misguided approach.

Others are fighting it, following the example of SBC and some of the other US telcos who are trying to change the whole charging model of the internet by effectively locking out competitive application service providers unless they pay access fees in addition to those that consumers pay.

Some are seeking to embrace it, as E-Plus in Germany has done, by bund-ling Skype with their flat rate data subscription. E-plus evidently believes that the increased data uptake will offset any drop in voice revenues.

And there are those who are looking to extend it, developing fully fledged converged networks and services that take maximum advantage of integrated communications technology.

Those are the companies with the blank piece of paper mentality; who buy into the dream and the power of one number, one device and one set of services.

While the experts may argue about the right path to the converged networks of the future, most of them are united in their belief that this convergence will happen.

Operators that choose to ignore the march of progress or to fight it and hold back change are guilty of applying an analogue mentality in a digital world.

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