Document 4.0 Description and qualification of new services

1
NETWORK AND SERVICES WORKSHOP
Description and qualificationof new
services Xavier Voisin
Dakar, April 18 21, 2005
ITU/EC Regulatory Capacity Building Project for
ECOWAS countries
2
IP networks and NGNenable new services

• Major concern New services over broadband
  access
• Key business issues to be mastered
• which services ?
• for which customers ?
• with which potential revenues ?
• How to add value to the basic fast internet
  serviceon DSL accesses ?

3
SPs deploy broadband services in three waves

Targeting new users (PC, TV, console) withnew
services (gaming, P2P communication, Content)
Mass users
Residential Multimedia
Services offered on existing Infrastructure,
starting by Small Offices and Home Workers
Bundled services
Business access
Rapid growth of Fast Internet access
High Speed Internet access
aujourd'hui
Time

• Time before break even
• For a new residential user 12 to 48 months
• For a new business user 4 to 6 months

4
Candidate services a lot to choose from !
Voice over IP Primary line Second line enabling
IP Centrex Voice VPN IP Centrex Basic Advanced Mul
timedia Conferencing Distance learning Distant
arraignment Remote lab Browse and talk Click to
Dial
Unified Messaging Content Delivery Games Downloads
(MP3) Gambling Video distribution Interactive
TV TV on demand Cinema of the future Long
Distance Bypass Internal External IP offload
BB High Speed Internet PC to Phone Phone to
PC Video telephony IP VPN (data) BW on-demand QoS
on demand Triple play Instant Messaging /
Presence Management MMS on fixed network 3G
applications Storage solutions
5
Services to be studied
Voice over IP Primary line Second line enabling
IP Centrex Voice VPN IP Centrex Basic Advanced Mul
timedia Conferencing Distance learning Distant
arraignment Remote lab Browse and talk Click to
Dial
Unified Messaging Content Delivery Games Downloads
(MP3) Gambling Video on demand Interactive TV TV
on demand Cinema of the future Long Distance
Bypass Internal External IP offload
BB High Speed Internet PC to Phone Phone to
PC Video telephony IP VPN (data) BW on-demand QoS
on demand Triple play Instant Messaging/
Presence Management MMS on fixed network 3G
applications Storage solutions
6
Services to be studiedVoIP
Voice over IP Primary line Second line enabling
IP Centrex Voice VPN IP Centrex Basic Advanced Mul
timedia Conferencing Distance learning Distant
arraignment Remote lab Browse and talk Click to
Dial
Unified Messaging Content Delivery Games Downloads
(MP3) Gambling Video on demand Interactive TV TV
on demand Cinema of the future Long Distance
Bypass Internal External IP offload
BB High Speed Internet PC to Phone Phone to
PC Video telephony IP VPN (data) BW on-demand QoS
on demand Triple play Instant Messaging/
Presence Management MMS on fixed network 3G
applications Storage solutions
7
VoIP

• What is it ?
• Access to telephone services from a data line
  (DSL)
• Different segments
• Corporate VPN VoIP
• SME/SOHO/homeworkers IP Centrex
• Residential Secondary line
• Residential Primary line

• Value Proposition
• End-user
• Access to different tariff schemes
• Enabler for IP services (CTI) gt e.g. IP Centrex,
  Browse and Talk
• Operator
• Add value to BB delivery
• Operator concern
• Cannibalization
• QoS and regulatory obligations (e.g. for primary
  line power feeding, emergency service,
  localization,... )

8
VoIP

• Revenue Drivers
• Connection fee
• 0 to BB or PSTN connection fee
• Subscription
• Incremental CPE rental fee (e.g. IAD)
• Often 0 on top of DSL modem
• Revenue from usage
• per minute (or bulk price for national calls)
• IP Phone lease (optional)

• Cost Centers
• Softswitch function
• Trunking Gateways
• CPE's to connect analog telephone sets
• VoIP SW package
• IP Phone cost (optional)

9
VoIP

• Market Insight
• Detailed in following slides

• Issues to be checked
• Speed of service penetration vs end-user value
  proposition
• Service penetration compared to Internet or PC
  penetration
• Global Voice ARPU compared to PSTN ?
• Competitive pressure cannibalization or
  additional revenue ?

10
VoIP - Market expectation
lt ASIA LEADS THE PACK
11
NGN Wireline/Voice From the hype to reality
Softswitching investment Market by IDC
Million
6,000
5,000
Decline ?
4,000
3,000
Delay
2,000
1,000
0
2000
2001
2002
2003
2004
2005
June 2000
August 2001
July 2002
12
VoIP success storyYahoo! Phone (Japan)
It costs Yahoo! Y37,000 (270) to acquire each
new BB customer

• BB connection 19.2 / mo
• Modem rental 5.4 / mo
• Phone service access 3.3 / mo
• Free calls among Yahoo! Phone users
• 0.06 per 3 min (Japan and US)
• other destination prices vary

June 2002 30.3 of Yahoo! BB users subscribed
to Yahoo! Phone. 65 of new BB
subscribers January 2003 80.4 of Yahoo! BB
users subscribed to Yahoo! Phone June 2003 90
i.e. 2.25 millions out of 2.5 million Yahoo! BB
users March 2004 95 i.e. 3.8 millions out of 4
million Yahoo! BB users
13
Free VoIP leader in France(as 2nd line with
VoIP on ADSL)
A real success 100 000 users end 2002, 485 000
end 2003 60.000 video users 2 weeks after
introduction of the service, gt 15 of French BB
market
14
Telephony and TV as additional revenue to plain
high speed Internet
Reference http//www.free.fr/
15
The real business is in incremental paid
services even if they dont show it

• Free is investing heavily in Local Loop
  Unbundling to offer ADSL services
• IP Telephony with black phone connection to Free
  Box
• Television on DSL via the Free Box
• At first glance everything seems free of cost !
• but you have to be a France Telecom subscriber to
  benefit of this tariff for ADSL
• only national calls to France Telecom fixed
  telephone lines and Free Box users are included
  in the monthly fixed price
• permanent availability of service and QoS not
  guaranteed, fax and modem calls not supported by
  the telephony service, need for main power on for
  the box.
• Free objectives are to enter the access race,
  grow market share and grow business with
  incremental services

16
Free IP Telephony services Tariffs
17
Free IP Telephony services Tariffs

• Zone 1 0.03 /minute ( 0.19 / minute to
  mobile phones)
• Major industrialized countries see list
  countries on previous page
• Zone 2 0.08 /minute ( 0.19 / minute to
  mobile phones)
• Zone 3 0.19 /minute ( 0.15 / minute to
  mobile phones)

18
Free IP Telephony services Tariffs

• Zone 4 0,29 /minute ( 0,10 / minute to
  mobile phones)
• Zone 5 0, 49 /minute (fixed mobile phones)

19
Free Telephony services Tariffs

• Zone 6 0,99 /minute (fixed mobile phones)
• Zone 7 0, 49 /minute (fixed mobile phones)
• Other Services and limitations
• Special fees for special services (not free)
• No access to kiosks services of France Telecom
  (shared revenue services)
• Numbers 0836PQ - 0840PQ - 0841PQ - 0842PQ -
  085BPQ - 0860PQ - 0868PQ - 0878PQ - 0890PQ -
  0891PQ - 0892PQ - 0893PQ - 0897PQ -0898PQ -
  0899PQ - 32PQ (sauf le 3244) - 36PQ are not
  accessible
• Call from France national lines charged like a
  local call
• Choice of telephone number in France non
  geographic format 08 70 7x xx xx - Number
  portability not possible
• One call at a time, limited to normal family or
  small office, transfer of externat traffic is
  strictly forbidden

20
VoIP in the Netherlands
Reference http//www.pilmo.com
21
Other implementations of mass market VoIP (1)

• Netherlands PILMO
• 2 types of services
• PC to phone open service on the web (Pilmo-Blue)
  / on prepaid card
• Full telephony (Pilmo-Gold) for NL Pilmo
  broadband subscribers from PC or Black phone via
  an adapter called "VoiceFinder"
• VoiceFinder 149 Gold subscription 9.95/mo
  on top of High Speed Internet access
• Pilmo-Gold Subscription may replace the ordinary
  telephone subscription
• Call charge 3c duration (by seconds)
• NL fix from 1c/min (Gold at slack hours) to
  2.8c/min (Blue at busy hour or Gold at slack
  hour)
• 4c/min (Gold) to major Int'l destinations (US,
  Europe, China, Australia) or 5c/min (Blue)
• 3c/min to NL mobiles

22
Other implementations of mass market VoIP (2)

• US Vonage
• Vonage objective
• to serve as 1st phone line (traditional phones
  connected to PC with a VoIP adaptor) for US and
  Canada users 10 000 users in 2002, 35 k mid
  2003, 170K June 2004
• 5 subscription levels (1st line)
• Basic Residential (14.99/mo) 500' localLD to
  NA (US Canada)
• Residential unlimited (24.99/mo) unlimited
  local 500' LD to NA
• Residential premium unlimited (29.99/mo)
  unlimited to NA
• Small Business basic (39.99/mo) 1500' localLD
  to NA (US Canada)
• Small Business unlimited (49.99/mo) unlimited
  to NA
• Requires BB access and impose some limitations
• Dedicated fax line offered for business
  subscription (fax modem calls not working on
  standard VoIP calls) Address entering on web
  needed for 911 emergency
• Usage restriction professional use forbidden on
  residential line, auto-dial, telemarketing
  forbidden on Business no service if power is
  off or Internet not accessible)
• Also Net2phone, iConnectHere, Packet8

23
Vonage in the US
Reference http//www.vonage.com
24
Some conclusions about VoIP

• Mass-market VoIP as a substitute to PSTN
• Emerging market
• Mainly offered by Competitive Service Providers
  with low price to fixed lines, often expensive
  for calls to mobile (except in USA)
• A threat to incumbent operators in the medium
  term and making pressure on traditional operator
  long distance prices
• Regulatory situation not fully settled
• VoIP used as trojan horse to induce deregulation
  of voice business
• Requires set up of meaningful interconnection
  prices
• Technical constraints under way of being solved
• A growing volumebut still marginal compared to
  PSTN

25
Services to be studiedIP Centrex
Voice over IP Primary line Second line enabling
IP Centrex Voice VPN IP Centrex Basic Advanced Mul
timedia Conferencing Distance learning Distant
arraignment Remote lab Browse and talk Click to
Dial
Unified Messaging Content Delivery Games Downloads
(MP3) Gambling Video on demand Interactive TV TV
on demand Cinema of the future Long Distance
Bypass Internal External IP offload
BB High Speed Internet PC to Phone Phone to
PC Video telephony IP VPN (data) BW on-demand QoS
on demand Triple play Instant Messaging/
Presence Management MMS on fixed network 3G
applications Storage solutions
26
IP Centrex

• Value Proposition
• To End Users
• No CAPEX investment from non-core business
  (telecom)
• No operation staff to be trained and employed
• Growth at own pace
• Easier cost management (against move,
  obsolescence, traffic patterns)
• IP Convergence
• Converged service for homeworkers
• To Operators
• Offer voice services on top of (already deployed)
  data-VPN,
• Move up the value chain providing core-business
  (voice) services
• Reduce churn to enterprise-housed solutions
• Possible brick for an SME bundle

• What is it ?
• Provides PBX-like voice and Computer Telephony
  Integrated (CTI) services to enterprises
• Main targets SOHO/SME and teleworkers

27
IP Centrex

• Revenue Drivers
• Setup fee
• Service subscription

• Cost Centers
• VoIP as pre-requisite
• IP Centrex applications
• IAD at customer premises
• Service platform

28
IP Centrex

• Market Insight
• BT 12 Euros
• SBC 12-17 Euros per month minutes
• 8-15 Euros for European pricing (Analysys, 2002)

• Issues to check
• Benchmark penetration with PBX market
  (replacement cycle, growth)
• Benchmark tariff with PBX CAPEX
• Impact on PBX reselling business ?
• Tariff structure for usage ?

Revenues
29
The Alcatel Virtual IP PBX solution
Virtual IP PBX UMS

• Text to speech features
• Call and Fax answering
• Voice and fax message delivery
• Virtual telephony and fax
• triggering through DTMF,
• speech recognition or web
• interface

Enhanced Network Services

• PBX, IP PBX interconnections
• Remote workers support
• Basic VPN features
• In / off calls
• Routing

Network Services

• Basic Class 4 5 features
• QoS for BB access
• Security
• Lawfull Interception

30
IPCentrextm solution by Netcentrex
31
Services to be studiedMultimedia Conferencing
Voice over IP Primary line Second line enabling
IP Centrex Voice VPN IP Centrex Basic Advanced Mul
timedia Conferencing Distance learning Distant
arraignment Remote lab Browse and talk Click to
Dial
Unified Messaging Content Delivery Games Downloads
(MP3) Gambling Video on demand Interactive TV TV
on demand Cinema of the future Long Distance
Bypass Internal External IP offload
BB High Speed Internet PC to Phone Phone to
PC Video telephony IP VPN (data) BW on-demand QoS
on demand Triple play Instant Messaging/
Presence Management MMS on fixed network 3G
applications Storage solutions
32
Multimedia Conferencing

• What is it ?
• Multi-party room-based or PC-based multiservice
  conference (with document sharing, Instant
  Messaging facilities,...)
• Non-IP users allowed in voice
• Room-based quality with "NetMeeting - like" ease
  of use and services

• Value Proposition
• For End User
• Teleconf spares time and costs and lowers
  security hazards
• Lower cost / better user friendliness than ISDN
  room-based videoconference
• For Operator
• Incremental value on data/voice
• Brick for package to business segment or vertical
  service (distance learning homeworking)
• Lower cost to operate Visioconf helpdesk

33
Multimedia Conferencing

• Revenue Drivers
• Setup fee
• Subscription
• Consumption

• Cost Centers
• Softswitch, trunking GW, VoIP functions to link
  non-IP users
• Multimedia conferencing platform and bridges

34
Multimedia Conferencing

• Market Insight
• PSTN examples
• RomTelecom FOC usage
• VNPT (Vietnam) Int'l 380/15' 130
• Moldtelecom 2 lei interurban ( 0.12) 5-10 for
  Europe ( 3-6) up to 27 lei (Africa) per 15 min
• Tata (India) 6500 Rs /h (120Euro)
• According to Yankee 0.5 to 0.7 /min per user
• QuestMark 25/h/user 2/5min after first hour

• Issues to check
• Threat of "free" web conference?
• Cannibalization of ISDN visioconf (leased lines
  BRA)?

35
Services to be studiedUnified Messaging
Voice over IP Primary line Second line enabling
IP Centrex Voice VPN IP Centrex Basic Advanced Mul
timedia Conferencing Distance learning Distant
arraignment Remote lab Browse and talk Click to
Dial
Unified Messaging Content Delivery Games Downloads
(MP3) Gambling Video on demand Interactive TV TV
on demand Cinema of the future Long Distance
Bypass Internal External IP offload
BB High Speed Internet PC to Phone Phone to
PC Video telephony IP VPN (data) BW on-demand QoS
on demand Triple play Instant Messaging/
Presence Management MMS on fixed network 3G
applications Storage solutions
36
Unified Messaging

• What is it ?
• Retrieve from anywhere any message from any
  device

• Value Proposition
• To End-User
• Main target
• Businesses,Teleworkers
• Productivity gain, ease of use, time-critical
  information management
• To Operator
• Move up value chain in Business segment (competes
  with enterprise-related EVS/Messaging)
• Leverage Mobile services

37
Unified Messaging

• Revenue Drivers
• Set-up fee
• Subscription
• Usage
• Often free except to-phone services (fixed,
  mobile) charged at a premium

• Cost Centers
• UMS platform and SW
• Individual messaging resources (Voice Mail, SMS
  server,) (gt Sunk cost ?)

38
Unified Messaging

• Market Insight
• Yankee Group UMS budget should be lt 5 telecom
  expenses (e.g.1.15/mo/employee for a 275-person
  company)
• DTs TNetBox 3/mo res. 8/mo bus., plus usage
  to voice 0.06 to 0.1 /min
• TDD 200 HK/mo (21)
• Access to messages often included in subscription
  except for voice and text to voice
• Possible integration and service bundling with
  other network ressources (SMS/MMS, voice servers
  )

• Issues to check
• Service partly offered by advanced IP-PBX systems
• Benchmark with Mobile penetration
• Check competitive positioning vs. Mobile operator

39
SBC Rolls out Unified Messaging Across Wireline
and Wireless Services

• Service launched on 4 October 2004 by SBC in the
  US
• A common message box from multiple SBC wireline
  and wireless sources for voice messages, faxes,
  and e-mails.
• Integrated message center for wireless and
  wireline voice-mails, e-mail, and fax subject
  lines all in one inbox.
• Text-to-speech technology to read e-mails fax
  message headers when calling by fixed or mobile
  phone
• Viewing and printing of faxes on PC
• E-mail or pager notification of new voice-mail or
  faxes.
• Management and storing of distribution lists and
  numbers
• 50 MB of online storage for consumers and 100 MB
  for businesses.
• Bundled with other services at 3 per month or
  offered as stand alone service at 10.95 per
  month (consumer)
• http//www.sbc.com/gen/press-room?pid5097cdvnne
  wsnewsarticleid21415

40
Services to be studiedContent Delivery
Voice over IP Primary line Second line enabling
IP Centrex Voice VPN IP Centrex Basic Advanced Mul
timedia Conferencing Distance learning Distant
arraignment Remote lab Browse and talk Click to
Dial
Unified Messaging Content Delivery Games Downloads
(MP3) Gambling Video on demand Interactive TV TV
on demand Cinema of the future Long Distance
Bypass Internal External IP offload
BB High Speed Internet PC to Phone Phone to
PC Video telephony IP VPN (data) BW on-demand QoS
on demand Triple play Instant Messaging/
Presence Management MMS on fixed network 3G
applications Storage solutions
41
Content Delivery

• What is it ?
• Access to paid content (Music, Games, Gambling)
• (NGN could enable future differentiated tariff
  schemes)

• Value Proposition
• End-users
• Trusted account with operators single wallet
  seamless identification
• Operators
• Capitalize on their access to users get share of
  e-commerce
• Content providers
• Ease of use for distribution channel operators
  as trusted party

42
Content Delivery

• Revenue Drivers
• Share of content revenue as brokers fee
• Hosting services (servers) depending on business
  model

• Cost Centers
• Payment and Authentication chain
• Hosting servers

43
Content Delivery

• Market Insight
• See survey result

• Issues to check
• Relationship to content providers
• Willingness to move into Application Service
  Provider (ASP) model

44
Gaming Why (now) ?

• Service Provider Challenge Opportunity
• 114 million people worldwide are expected to be
  playing online games by 2006 (approximately 50
  million today).
  
• Alcatel and Schema have done primary research to
  better understand what consumers want
• Research indicated consumers are expecting to
  spend between 40 and 100 USD per annum on
  networked games
• 20 of online gamers want peer-to-peer play over
  broadband
• Issue Need for broadband connectivity (QoS !)
• Therefore Need for controlled access and
  management
• Opportunity for Service Providers improve
  current DSL ARPUs, increase DSL uptake

45
It is not just about bandwidthE.g. how gamer
judges a connection
Outgoing Packet Loss
Incoming Packet Loss (ms)
Outgoing Latency (ms)
Incoming Latency (ms)
Connection Integrity Bar Graph Green gt80 Yellow
79-50 Red lt49
Tune these settings optimally for the game
Source Screen shot from Sony Online
Entertainments EverQuest MMORPG
46
Music Solutions Why (now) ?

• Service Provider Challenge Opportunity
• Leverage additional ARPU from billable
  plug-and-play service offer, bundled with ADSL
  HSI, targeting the homeowner/bill payer
• 3.2B or 15 of Total Market by 2005 (Source
  Accenture)
• 5.4B or 25 of Total Market by 2005 (Source
  Jupiter Comms)
• 12.4B or 19 of Total Music market by 2010
  (Source JP Morgan)
• Music Industry Currently Losing 10b per Year
  to Piracy! (Source Magex)
• Solutions to the current piracy plague strongly
  requested now to accompany legal actions against
  fraud

47
Perceived value of online services per month for
end users

• Gaming
• Over 70 of Koreans broadband user play games
  online
• Music
• 135k users of Musicmatch pay around 7 per month.
  EMI releases 140,000 tracks online.
• Pay TV
• 10 Belgium to 55 in the U.K.
• Video-on-Demand
• Monaco Telecom 20 for 5 films per month, 5 per
  additional
• Hi-Speed Internet Access
• metered entry _at_ 13 in Italy,high-end flat rate
  gt50 in D, U.K.

• Gaming
• depends on gaming culture in a given society
• Music
• readiness to subscribe to a legal, easy-to-use
  service
• Pay TV
• Content dependent
• Video-on-Demand
• comparable to what people spend in DVD and tapes
• Hi-Speed Internet Access
• flat ARPU at increasing performance

5-25
5-15
10-35
15-25
25-50
Going deeper in Operators core business
48
Services to be studiedVideo on demand
Voice over IP Primary line Second line enabling
IP Centrex Voice VPN IP Centrex Basic Advanced Mul
timedia Conferencing Distance learning Distant
arraignment Remote lab Browse and talk Click to
Dial
Unified Messaging Content Delivery Games Downloads
(MP3) Gambling Video on demand Interactive TV TV
on demand Cinema of the future Long Distance
Bypass Internal External IP offload
BB High Speed Internet PC to Phone Phone to
PC Video telephony IP VPN (data) BW on-demand QoS
on demand Triple play Instant Messaging/
Presence Management MMS on fixed network 3G
applications Storage solutions
49
TV - Video on demand

• What is it ?
• Broadcast of TV on High speed Internet access
  (xDSL)
• Access to movies on a per-demand basis from DSL
  line (VoD, NVOD, iTV)

• Value Proposition
• End-users
• Control / personalization of video content
• Operators
• Capture a part of entertainment value chain
• Uplifts DSL demand

50
Video on demand

• Revenue Drivers
• Subscription
• Share of revenue depending on value chain
• Possible payment intermediation

• Cost Centers
• Softswitch
• Multimedia Gateways
• Billing / Authentication solution
• Capacity in transport network

51
Video on demand

• Market Insight
• See market survey
• Willingness to pay 59 pay per movie vs 30
  subscription and 11 per time unit

• Issues to check
• Alternate solutions
• CaTV, future digital TV ?
• Business model and value chain compared to
  traditional video delivery
• Digital right management agreements with editors
  (partnership)

52
TV and Video on demandon ADSL soon in Africa
Sonatel (Senegal) launching a digital TV and VoD
pilot
53
Innovative residential services FastWeb TV and
VoD with premium content
FastWeb TV

• Unified interface for content in all
• formats
• Terrestrial broadcast RAI, Mediaset,
• Satellite broadcast CNN, Bloomberg,
• Pay-TV/Pay-per-View Stream TELE
• Video-on-Demand
• Integrated with VideoREC Electronic
• Program Guide

Video on Demand offer

• 6,000 titles
• First VoD licensing agreements in
• Italy with US major film studios
• 20th Century Fox
• Universal Studios
• DreamWorks

54
Fastweb offer of Telephony Internet TV
25/month activation usage based (or
optional lumsum) paid services
14/month local calls
300 min local nat Price per call(in cent)
local 6.2 1.5/min nat. 7.75 11/min mobile
12.5 24.5/min
20/month National fixed lines
24/month
40/month limited to 20 hours Public IP
10/month
300' Internet, puis usage 1.5 /hour
2-6/month per channel
5 TV channels Videostation 99
April 2005 Prices including taxes
ONTV 5.9/month programme on demand (2-6)
or Pay per view (12-15) Click on RAI 7.5 /m
16-28/month per channel
55
FastwebItaly
56
Free TV offer included in ADSL subscription
100 channels included
Pay TV and packages for additional monthly fees
57
Free Examples of optional TV channels
58
Free example of channel packs
59
Beyond Video-on-DemandExample of an interactive
service
Prepaid account
The user watches a football match ...
... and can bet who will make the next goal.
All payments are handled via the prepaid account.
60
Services to be studiedLong distance Bypass
Voice over IP Primary line Second line enabling
IP Centrex Voice VPN IP Centrex Basic Advanced Mul
timedia Conferencing Distance learning Distant
arraignment Remote lab Browse and talk Click to
Dial
Unified Messaging Content Delivery Games Downloads
(MP3) Gambling Video on demand Interactive TV TV
on demand Cinema of the future Long Distance
Bypass Internal External IP offload
BB High Speed Internet PC to Phone Phone to
PC Video telephony IP VPN (data) BW on-demand QoS
on demand Triple play Instant Messaging/
Presence Management MMS on fixed network 3G
applications Storage solutions
Cost-driven service
61
Long-Distance By-pass

• What is it ?
• IP transport to lower cost
• Various flavors
• Internal LD or Intl
• Between operators
• short-cut a player
• lower interco

• Value Proposition
• Decrease the cost
• Higher bandwidth efficiency
• better Cost of Ownership
• Scaleable solution
• Step to target NGN network

62
Long-Distance By-pass

• Revenue Drivers
• None, except
• If linked to a tariff decrease, consumption might
  increase
• If working at constant capacity, capacity
  released might be re-sold

• Cost Centers
• Softswitch
• Trunking Gateways
• Cost improvement compared to existing transport
  delivery

63
Long-Distance By-pass

• Market Insight
• Already heavily deployed on Intl routes
• Example of ITXC or iBasis providing PoPs
  controlled by themselves or possibly by operators

• Issues to check
• May be considered as a feature of a more specific
  service
• Regulation and bi-lateral agreements might apply

64
Services to be studiedIP Offload
Voice over IP Primary line Second line enabling
IP Centrex Voice VPN IP Centrex Basic Advanced Mul
timedia Conferencing Distance learning Distant
arraignment Remote lab Browse and talk Click to
Dial
Unified Messaging Content Delivery Games Downloads
(MP3) Gambling Video on demand Interactive TV TV
on demand Cinema of the future Long Distance
Bypass Internal External IP offload
BB High Speed Internet PC to Phone Phone to
PC Video telephony IP VPN (data) BW on-demand QoS
on demand Triple play Instant Messaging/
Presence Management MMS on fixed network 3G
applications Storage solutions
Cost-driven service
65
IP Offload

• Value Proposition
• Traditional operator
• More efficient use of existing local/tandem
  switch capacity for profitable voice
• Offload high-volume low margin data traffic to
  dedicated RAS platforms
• Most cost effective way to connect RAS equipment
  to switches
• Capture business from ISPs who want to outsource
  IP management
• ISP
• Most cost effective to connect to PSTN operator

• What is it ?
• Taking dial-up Internet traffic away from transit
  PSTN

66
IP Offload

• Revenue Drivers
• None

• Cost Centers
• Trunking gateways
• Savings in capacity

• Market Insight

• Issues to check
• Linked to dialup traffic only

67
Services to be studiedIP Phone home
Voice over IP Primary line Second line enabling
IP Centrex Voice VPN IP Centrex Basic Advanced Mul
timedia Conferencing Distance learning Distant
arraignment Remote lab Browse and talk Click to
Dial
Unified Messaging Content Delivery Games Downloads
(MP3) Gambling Video on demand Interactive TV TV
on demand Cinema of the future Long Distance
Bypass Internal External IP offload
BB High Speed Internet PC to Phone (int'l) Phone
to PC Video telephony IP VPN (data) BW
on-demand QoS on demand Triple play Instant
Messaging/ Presence Management MMS on fixed
network 3G applications Storage solutions
68
IP Phone Home

• What is it ?
• Offer PC to phone for incoming Intl calls

• Value Proposition
• End-user Lower price with still the to phone
  appeal for expatriate having a PC access
• Operator
• Keeps higher share of value chain
• Win churn from call-backers
• Lower prices whilst increasing revenue per user
• Keep control of all investment

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IP Phone Home
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IP Phone Home

• Revenue Drivers
• Tariff to position according to existing demand /
  offer
• Increase of usage from price/usage elasticity
• Increase of users

• Cost Centers
• Softswitch
• Trunking GW
• Authentication / billing chain
• Prepaid
• Portal

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IP Phone Home

• Market Insight
• Wholesale possible to companies (e.g. Net2phone,
  i-connect here) offering a similar service

• Issues to check
• Tariff decrease vs existing
• Tariff origin-dependent ?
• Regulatory impact
• Retailer or wholesaler?

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IP Phone Home

• The Operator problem (familiar to you, no ?)
• Many expatriates working abroad, with higher
  income than at home
• In-bound Int'l calls see revenue decrease
  because
• Usage of cheap calling cards,
• with lower interco countries (US)
• and/or using other International gateways
• emergence of PC to PC calls, either directly or
  through cybercafé
• Note PC to Phone could be offered as a national
  service, but would face different cannibalization
  issues not developped here

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IP PHONE HOME Alcatel solution

• Caller from abroad download the software from
  Operator's Web page
• Pre-payment of minutes on Internet via secured
  credit card transactions in originating country,
  or subscription or prepayment in terminating
  country
• PC to phone service using Internet up to the
  trunk gateway within the call terminating
  operator's network

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IP Phone HomePositioning for End-User Community

• Cheaper than calling cards
• More convenient than PC to PC calls
• Cheaper to called party, if access to PC was by
  Cybercafé or dialup
• Easier to implement by calling party (no
  appointment needed / Phone access by called party
  is easier than PC access)
• But
• uses Internet gt could be lower quality than
  calling cards
• uses PSTN gt more expensive than PC to PC
• () End-User community means both the calling and
  the called parties

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IP Phone HomePositioning for the Operator

• Almost all the revenue goes to his pocket
• Should be positioned to generate MORE revenues
  than from interco with calling card service
  providers
• No investment in originating country
• No equipment
• No distribution network needed in foreign country
• Cheaper calls will generate more minutes
• Solution available immediately
• High risk of losses if offered by a competitor
• A step to NGN

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Practical excercise

• WGS1 (tomorrow) building a case with a chosen
  set of services market penetration and pricing
  assumptions will allow an economic simulation of
  the case (business plan).
• Segment drivers (Nb of service users per segment)
• Revenue drivers
• Cost drivers
• See input Excel sheet to be distributed to the
  work groups