Why Telcos Should Become Internet Telcos

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Why Telcos Should Become Internet Telcos

• Américo Muchanga
• americo_at_uem.mz

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Summary

• What is broadband?
• How do develop broadband
• Why Telcos need to become Internet Telcos
• Voice in the Internet
• Skype and its implications
• Some thoughts

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Important message!

• Strategies for developing broadband
  infrastructure
• Need for telco operators to address Internet as a
  strategic area if they want to survive, the
  internet voice wave

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What is a broadband?

• Dialup (56kbps)
• ISDN, T1, E1 (64kbps 2Mbps)
• xDSL (2-10 Mbps)
• Ethernet (10Mbps 100Mbps)
• IEEE 802.11b (11Mbps)
• IEEE 802.11a,g (54Mbps)
• Gigabit Ethernet (1, 10 beyond)

Text e-mail only
Internet
Multimedia
Interactive multimedia
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What is then broadband?

• Anything that gives a sustained bandwidth over
  10Mbps. With this capacity you can multiplex 3
  compressed digital TV channels

My Definition
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What's Broadband?

• Broadband is high-speed Internet access such as
  through a Cable or DSL modem
• It gives you a continuous connection to the
  Internet at speeds much faster than dialup
• As a general rule, if you're getting speeds of
  90 Kbps or better, you probably have a broadband
  connection.

Common definition
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How do we achieve broadband ?

• Technologies
• Participating Stakeholders
• Regulatory Environment

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Technologies

• Traditional Telco network Technology
• Fiber Optics
• Wireless Technologies
• Satellite Technologies

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Participating Stakeholders

• Telecomm Companies (Fixed and Mobile)
• Electricity Companies
• Railway Companies
• Pipeline Companies
• Roads Authorities
• Water Supply companies
• Cable TV companies

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Regulatory Environment

• Mandate that every public project, be it in the
  city, or between cities or provinces include a
  component of broadband infrastructure
• Regulate an open access to these infrastructure
• Open up full competition in the provision of
  broadband infrastructure and services

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Challenge for African Telcos They need to
become Internet companies

• Until today many telcos have been able to stay
  aside of the internet wave, despite the fact that
  Internet has profoundly changed communications.
• Voice communications remained dominated by
  telcos
• Now VoIP has finally arrived, more challenges are
  coming, and I think that now Telcos have to
  understand and adapt to Internet

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Why Worry?

• Number of Internet users is growing
• VoIP can be regulated, but voice communication in
  the form of skype, for instances, it is hard to
  regulate.
• Many people are already using skype for normal
  national and international business and personal
  communication
• This represents a substantial revenue for Telco
  companies and a saving for skype users

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Skype

• While I was preparing this presentation skype had
  100,518,546 downloads!
• Served 7.482.722.456 minutes
• TDM has served in 2003
• 22.357.000 minutes of international traffic
• 589.531.000 units of national traffic
• Between 1.7 - 2.5 million online users
• You can now skypeOut
• Soon you will be able to SkypeIn from/to many
  countries.

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Skype

• Better call quality than cellphone over a
  broadband connection
• Skype provides security that I do not have in
  traditional telephony
• Skype can use PSTN network

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What skype Need

• Skype needs a telephone number to terminate calls
  from PSTN Needs regulation!
• Skype needs access to PSTN at better rates

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Internet Voice and Mobility

• Internet voice will not penetrate fixed telephony
  only, will also penetrate mobile telephony
• Wimax and IEEE802.11 technologies are expanding
  and providing ubiquitous broadband coverage to
  entire cities
• More portable computers (Palmtops) are being
  shipped with support to IEEE802.11

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Internet Voice and Mobility

• This means more mobile Internet, and as a
  consequence more Internet Voice (VoIP and skype)
  access
• Soon we will be reachable anywhere through
  Internet.

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What Telcos Should do?

• Prepare themselves to take advantage of VoIP by
  becoming Internet Telcos
• Telcos need to create infrastructure to be able
  to offer ubiquitous Internet access, so that they
  can be a major player in this potential market
• Prepare themselves to offer skype termination
• Invest more in leased line services, that users
  need to use broadband services
• Otherwise this market will be captured by
  traditional Internet Service Providers, and less
  units for Telcos.

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Some threats

• Skype might make law enforcement difficult, just
  like any Internet application
• Single power controlling international
  communications
• Need to have proper VoIP solution

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• Obrigado
• Thank You
• Merci