Mobile Marketing Portal

The recent ITU Telecom World 2006 conference in Hong Kong discusses the latest trends and challenges in the telecommunications industry.
BY CHRISTY LEE S. W.

Increasingly, mobile phones are being produced with more and more features packed into them that offer services not commonly associated with these devices, say, 10 years ago.

This convergence of technologies has given birth to new features in mobile phones that has the entire industry buzzing with excitement at the thought of its true potential.
It's a trend that Samsung Electronics' telecommunications network business division president Lee Ki-Tae has been keeping an eye on and chose to reiterate at the recent ITU (International Telecommunication Union) Telecom World 2006 conference.

"The boundaries are vanishing between online, offline, mobile, wired and the wireless — all kinds of services and networks are converging and the technologies will be integrated into IP-based networks," he said during a CEO roundtable session at the event.

Lee said all kinds of devices are converging into mobile phones, and that the handset will be an all-in-one "ubiquitous hub." "Two out of seven billion people in the world have experience with a cellphone.

"Mobile communication technology adoption has shown the highest rate of technology adoption that we have ever seen — it is faster than the evolution of the telegram, radio and the television," said Sanjiv Ahuja, CEO of Orange Britain.

According to him, statistics show that it took 12 years to record the first billion mobile users, while the second billion came in less than three years.

"The strongest correlation of GDP (gross domestic product) growth in developing markets is mobility penetration. "It's not just a way of communicating for people but also one of the strongest ways for economies to grow in developing countries within Asia and Africa," Sanjiv said.

Indeed, the general consensus at ITU Telecom World was that the Internet, services and networks will become converged into mobile devices, but this also means a bigger challenge for ICT companies to find ways to seamlessly connect all these elements together.

Complex challenges

One of these challenges is to identify new network architectures, services and markets while keeping costs down, wrote Ken Lee, BEA WebLogic communications platform director of product marketing, in an ITU Telecom World daily report.

According to Lee, operators believe that one of the solutions lie in next-generation telecom network architectures, particularly IP multimedia subsystems (IMS).

"The IMS architecture enables real-time service delivery over a packet-based network. "This allows for the creation and deployment of IP-based voice and multimedia services, while integrating with legacy networks and existing services," Lee wrote.

Apart from IMS, Lee noted that operators are also increasing their investments in next-generation networks (NGN) and service delivery platform (SDP) architectures. An example is telecommunication equipment maker and solution provider Ericsson, which currently leads the IMS market with 28 IMS system contracts for commercial launch and 60 additional trials distributed worldwide.

Launched in 2005, the Ericsson IMS end-to-end solution promises operators immediate revenue opportunities when evolving to an all-IP operation by allowing access to a range of new multimedia services across both fixed and mobile networks, the company claimed.

Regulation needed

One of the topics brought up during the CEO roundtable was that of regulations.

"Regulators should be facilitators of progress and not bottlenecks," said Dr Reza Jafari, chairman and moderator of the ITU Telecom World 2006 Forum Advisory Committee.

"If it is a free and fair competitive market – at least (that is how it is) in our industry since we use a common resource such as spectrum – I think that regulation should be as little as possible," said Orange's Sanjiv.

"I think regulation has done us well until now. We are now in a very competitive market with competing technologies and providers so our request to the regulators is to 'keep a light touch' and let us continue to do what we do well to serve our customers," he added.

Ericsson CEO Carl-Hendrik Svanberg agreed and added that regulations also provide guidance if only kept light. He said that in India, there were no regulators or "rules" until about five years ago because there was very little in the way of mobile communications.

"And suddenly there came enough rules that operators and investors dare to put their billions of dollars in networks to make it grow because they trust that it would remain in years to come," Svanberg said.

However, according to Alcatel-Lucent CEO Patricia Russo, with the world of technology moving at break neck speed, it is essential that regulators also remain up to date.

"If you reflect on the speed in which this industry has changed in the past five to 10 years ago, one of the challenges we have around the world is that regulation has to keep up with what is happening from a technological standpoint," she said.

"For example, in the United States, the latest telecommunications act was written and put into law in 1996 – now our world does not look anything like 1996 anymore," she mused.

She said somehow, the process of regulation has to find a way to rapidly alter itself to keep pace with technology. Russo also pointed out that there has to be an economical model in the regulatory practices, policies and regimes which then creates an incentive for companies.

Customer acquisition used to be the main way for telcos to increase revenue, but with increasing competition telcos nowadays need to diversify their service offerings to generate new revenue streams.

This leads to the roles of telcos rapidly expanding from just being a traditional provider of voice and data services. Now, by providing video, games and music on mobile phones, they are also turning into entertainment companies.

Ericsson's Svanberg pointed out that business models would be the challenge in this case. "It is clear that we are going mobile everywhere, but what does that mean to current business models?" he asked.

Svanberg said operators now face the challenges of figuring out how they are going to build their business, charge for their new services, outsource their operations and educate consumers.

"With cellphones so advanced, customers have to consider what is required else you can't establish a solid business model for the future," said Masao Nakamura, president and CEO of NTT DoCoMo Inc.

"We have turned cellphones into payment terminals and though we aren't sure if the customers really want it, we still have to pioneer these service fields," he said.

Since some of these services, such as IPTV and mobile TV are relatively new in the industry, service providers are yet to determine which business models are workable or not.

Regardless, telcos are going ahead with what they believe is the right course of action while waiting to see which of these technologies and standards reaps rewards in the end.