Flushed with success in its traditional Russian marketplace, Bercut is now looking West to further expand its range of services to European operators, as Priscilla Awde explains

From Russia with...well certainly interest. But also, what appears to be a different approach to solving the needs of telcos  especially in getting multimedia products to market fast.
Bucking the trend, Russian software solutions developer, Bercut, is challenging the scepticism and prejudices which traditionally hamper Eastern European companies wanting to do business outside their domestic markets. Started in 1996 at a time when access to Russia was restricted, the company developed a range of solutions mainly for mobile operators and, importantly, largely without the help or influence of Western suppliers or their technologies.
Rather than a burden, building 'everything from nothing' meant that software developers were not hampered by tradition, and could take a new approach to some old problems. "We started from scratch, explains Roland Orlie, Director of Global Business Development at Bercut International. "We didn't follow American or Western ideas, so our products have features and technologies which are highly innovative but unconventional. Although our software runs on open platforms and interconnects to standard systems, our products operate unconventionally and take advantage of optimal solutions. We can configure and create solutions very fast and, because we didn't have to go through all the different stages, we have leapfrogged much of the GSM technology.
"Initially reactions from Western suppliers and telcos were adverse, but when we asked them to look at and test our products they were pleasantly surprised."
Apparently they liked what they saw. The company is expanding from its solid base with Russian operators and winning contracts both regionally and within sophisticated and developing telecoms markets around the world.
Having grown up in a Russian market that has evolved from numerous, highly localised, small mobile operators into a few national carriers, Bercut expects to turnover £30 million this year. Supporting its push to develop end-to-end solutions, the company has developed selective partnerships with companies in Western Europe  a model it aims to expand along with marketing channels.
Orlie attributes Bercut's success to the fact that the software not only works well but saves operators money in the process by cutting roaming charges, increasing flexibility and making it faster and easier to communicate with customers.
"Mobile operators will only survive if useful applications and content are brought to consumers fast and easily," he notes. "There is huge competition for telcos especially as new services like VoIP are being offered by companies which aren't telecoms based. Packet data is easily delivered and will be cheap. Because of competition, mobile telcos are at the mercy of market demand  consumers drive the show in the mobile world which is why it is so important to make it easy and convenient to get information to end users.
"The new growth is in mobile systems which can be upgraded very fast and flexibly. Although enterprises are not getting the answers they are looking for, this is only the start of a vast, explosive proliferation of devices and technologies. There is a constant evolution of services and applications  nothing is fixed.
Bercut's strength, Orlie believes, lies in the fact that it is staffed by young, highly educated and motivated engineers who speak the same technical language as customers and who are more interested in bits and bytes than politics.
"Others stick to a standardised approach, but we are more dynamic and individual and therefore more flexible," he says. "Our engineers are motivated to solve problems and make things happen so that customers don't have to be squeezed into a mould. The business case determines buying decisions and our systems give a fast return on investment."
Innovation extends to payment methods developed for the low cost Russian economy. In a scaleable investment approach, telcos pay for what they use which reduces the cost of entry. Further, prices only increase with traffic volumes and subscriber numbers, so fees rise along with the growth in the business. Offering sophisticated, scaleable software systems at low cost is a model Orlie expects will work well in the world's developing countries in which mobile communications are growing fast, but where the economics leave little room for high up-front investment.
Grouped into three lines of business  managed solutions, customer care and CRM, and intelligent multi-services  products are based on a smart platform and offer all the advanced features common to modern telecoms systems. Implemented as stand-alone or in combination with third party systems, all products provide end-to-end management of customer applications and services in a secure and scalable environment. Easily configured, all systems are based on open standards and can therefore be quickly integrated into existing systems. Content providers can quickly write applications to run on a variety of transport systems.
Fundamental to the product range, the IN@family is a scalable, multi-services intelligent network which, as well as ready-to-use applications, includes customisation tools for bespoke development. Based on an open three-layer architecture and supporting OSA/Parlay specifications, the platform can be integrated with switching equipment from all the major vendors. The system supports fully featured VPNs including separate rates for different users on the network. Dynamic filters allow users to bar calls, create individual profiles and route calls as needed via SMS, USSD, the SIM menu or over the Internet.
The roaming platform analyses and processes signalling traffic between host and client operators in real time, providing end users with cost effective international connectivity. Using the USSD GSM transport protocol rather than SMS for mapping, allows operators to roam at the lowest costs possible and pass on savings to customers.
Based on a Java card in the mobile phone, menu based browsing makes it easy for operators to personalise services to individual users, sending them particular information as requested. One national Russian operator has successfully scaled up its browsing system from one to 13 million subscribers.
Pre- and post-paid customers are handled on the same service platform and the system supports real time billing for auxiliary services, including SMS, USSD and GPRS. Making life easy for telcos, Bercut's CRM product includes an out-of-the-box call centre and unified customer self-care system. Operators have all the tools required to offer customers a personal service and to support the rapid development and launch of new products.
Orlie is convinced that because Bercut systems have supported Russian operators as they evolved from small local companies and grown via consolidation into national carriers, they will work anywhere.
Taking a single minded, entrepreneurial approach, Bercut has streamlined its goals and focuses on making it easy for telcos to communicate with customers and introduce value added services fast, efficiently and cost effectively. The aim is to fix problems for customers and especially for the big, global operators which purchase centrally but which need flexible systems that can be easily adapted to meet local conditions.
"Innovation is the company culture,"  Orlie says. "We have short lines of communication with customers and provide individual solutions rather than standard off-the-shelf systems. We don't religiously stick to a standardised approach but are more dynamic, individual and therefore more flexible. Bercut is a very different company. Our engineers are motivated to solve problems and make things happen; to offer scalability and functionality at low cost."
Guided by its own 'can do' philosophy, Bercut is going West.                               

Priscilla Awde is a freelance communications writer

3GSM World Congress 2005 promises to be the biggest and best event yet, reckons Bill Gajda

2005 will be a truly pivotal year for the global mobile industry. It will define where new revenue streams will come from, and how to drive the service uptake that will generate them. For the first time, many operators will have at their disposal new broadband technologies, exciting content partnerships, maturing business models and every indication that the momentum of GSM is building more rapidly than ever.
In February 2004, the one-billion-user milestone was passed  an incredible figure in its own right  but between then and September 2004, a further quarter billion subscribers have signed up. It took a dozen years to reach the first billion, but only half a dozen months to get quarter of the way to the next.
GSM's continuing growth is underpinned by that fact that it is now deployed, or is in deployment, in every country with a population of more than one million with the exception of Japan and Korea. Deployments in many countries and territories with smaller populations simply underline the technology's flexibility. However, Japanese and Korean operators have joined the growing ranks in the more mature markets of Europe, Asia, the US, the Middle East and Africa in upgrading to 3GSM to prepare the ground for profitable new broadband mobility for their subscribers. Four days at the beginning of 2005 will define the direction that mobile operators, content developers and technology suppliers take and will reveal the decisions they make.
3GSM World Congress 2005 will be the biggest in the event's 18-year history, with visitors and delegates expected to grow in number as the industry itself grows. In 2004, 28,000 visitors, 4,200 delegates and more than 600 exhibitors attended what was the largest event to date. In 2005, not only is attendance expected to exceed this, but more importantly, the quality of the conference programme will be at its highest ever.
The world's most influential mobile industry executives will take to the podium for keynote sessions in a speaking and educational programme that has unrivalled gravitas. It all begins with the GSM Association's Leadership Summit on the eve of the Congress. The inaugural invitation-only event in 2004 attracted more than 150 GSMA operator and associate member CEOs to agree and disseminate strategy for the year ahead. 
Over the following four days, the chief executive officers, presidents or board members of the leading industry players will share their insights with Congress delegates, presenting keynotes on how the industry is changing, where it is going, and how to gain maximum value from these developments.
The highlights will include 'Defining Future Opportunities - No Limits To Growth,' where Rob Conway, Chief Executive of the GSM Association will outline our plans for industry development. Joining Rob Conway during this first keynote session will be Lothar Pauly, President and CEO of Siemens Communications, who will outline what opportunities the convergence of the Internet and wireless worlds presents. Pascal Debon, President of Nortel networks' Carrier networks division will discuss the key mechanisms that will drive business transformation for operators.
Fireside chats
The Fireside Chats that proved so popular at the 3GSM World Congress 2004 in Singapore will encourage delegates to eavesdrop on what the decision makers think. Craig Ehrlich, the Chairman of the GSM Association, will scrutinise the issues of the day with Sanjiv Ahuja, CEO of Orange Group, Masao Nakamura, President and CEO of NTT DoCoMo and Rene Obermann, CEO of T-Mobile International.
The GSM Association understands that dialogue between developing and developed markets is important, and the speaking programme reflects this. Sunil Mittal, CEO of Bharti Telecom, the biggest GSM operator in India, will offer a snapshot of his expectations for the sub continent's mobile prospects as it becomes one of the fastest growing markets on the planet. Lim Chuan Poh, CEO of SingTel Mobile will discuss how to evolve beyond traditional services without the risk of revenue cannibalisation. Naguib Sawiris, Chairman and CEO of Orascom, the leading operator group serving the Middle East and North Africa will give his perspective on how to develop low-cost handsets for emerging markets.
In fact, the GSM Association hopes to see many more delegates, visitors and increased media attention from developing markets as these areas begin to play a vital role in how the industry develops. Often, these markets in Latin America, Eastern Europe and China have demonstrated they are actually leading much of the innovative service creation and deployment we can expect to see more of during 2005. For example, Napolean Nazareno, President and CEO of the Smart, and Gerry Ablaza, CEO of Globe will join a panel alongside Verisign and Simpay, to reveal how innovative text-based services and micropayment systems are now being used to transfer funds across borders.
Political and technical theme
In what will be a strong political and technical theme, Karim Khoja, CEO of Roshan of Afghanistan, will bring to the Congress his experience of building mobile networks that can support growing economies. In many developing continents, mobile communication remains superior to the fixed line infrastructure and could also become the broadband network of choice.
In its commitment to discussing the concerns of developing markets, the GSM Association has invited experts from outside the operator and vendor communities to talk about the prospects for the industry. Jay Naidoo, Chairman, of the Development Bank of South Africa will show how mobile communications are a fundamental driver for economic growth. In the spirit of entrepreneurship, Stelios Haji-Ioannou, founder of the easyGroup will share his thoughts on how revolutionary business models can transform industries, a discussion that will chime with operators who are seeking leaner operations.
The mobile industry has always been an entrepreneurial one, and so a Venture-Funded Technologies session is incorporated in the Congress agenda. This gives 30 privately funded companies a window to 'elevator pitch' an audience consisting of top venture fund firms, and attempt to monetise their ideas.
In acknowledgement that the mobile industry constantly seeks to innovate, 3GSM World Congress 2005 will present leadership on a wide range of issues that are testing the creativity and resolve of all operators. Panel sessions here include pricing and value strategies, customer ownership and brand value, handset customisation and usability, a banking view on co-operation for mobile commerce, the interplay of mobile and TV, restructuring the handset supply chain and how to adapt content. Ralph Simon, Chairman of the Mobile Entertainment Forum Americas will moderate the Mobile Entertainment Summit, a new addition to the conference programme for 2005.
There is no doubt that entertainment will form important revenue streams for operators, and the Entertainment Forum will bring together the operators and content developers. Issues for discussion will include how to maximise revenue, protect consumers against inappropriate content, delivering TV-to-mobile content, personalising third party content and what it takes to offer end-to-end content delivery.
The 'Cool and Connected' Fashion show returns again in 2005, showcasing wearable mobile technology from the catwalk to the consumer, and reaffirming that consumer branding and design are all-important.
In many ways, the 2005 World Congress will mark a new pinnacle in the event's history.  But it will also mark a fond farewell to Cannes as its signature venue, as the Congress will move from Cannes to Catalonia in 2006.
The need to accommodate rising visitor numbers and continually growing demand for exhibition space from the ever expanding eco-system of suppliers to the GSM community will see the event relocate to Barcelona.  This decision has not been taken lightly, but we believe it is the best way forward as we work to accommodate an event and an industry that is growing at a pace few of us would have predicted even a few years ago.
Bill Gajda is Chief Marketing Officer, GSM Association

As new data services emerge, mobile operators need a way of updating millions of handsets without users having to replace them. And OTA just could be the answer, says Joos Cadonau

As mobile data services fail to meet expectations, operators are looking for ways to roll out new services and convert subscribers into regular mobile data users. Increasingly this search has focused on solving one conundrum: how to upgrade billions of existing handsets to receive new services without having to corral their owners to invest in new models.Over-the-air (OTA) technology is one possible solution. It allows operators to add new types of services directly to the subscriber's SIM card and configure handsets remotely to support these new services.

OTA in action
Before we look at commercial benefits, it is worth explaining how OTA works.  OTA is based on classic network architecture. At one end is the back-end management programme selected by the operator, typically a billing or customer care system; and at the other is the customer's SIM card.  To deliver a software update from the operator to the customer, the back-end system sends a service request to an OTA Gateway, which transforms the request into a binary SMS to be sent to the SIM card. With an OTA platform, operators can seamlessly manage and update a customer's SIM card and cost-effectively deliver new applications without ever being physically connected to the handset itself. With this kind of power at their fingertips, there are a host of ways that operators can benefit from OTA. 

Driving data services
Mobile devices have evolved from 'dumb' terminals with basic telephony functionality into sophisticated smartphones with multimedia capabilities. However, for subscribers to use more advanced services, operators need to ensure their device settings and software are automatically configured. Through OTA technology, this once laborious process happens seamlessly and inexpensively.The result is that operators can convert more subscribers into regular mobile data users and rollout new services at lightening speed.  And for the consumer, the OTA approach is ideal. Subscribers don't have to worry about figuring out how to configure their mobile handsets to use these services  with OTA this is done automatically. Not only does it save them the cost of upgrading their handset, it eliminates the physical hassle of going in-store to buy Java games or back-up their address books, for example. Extensive tariff functionality gives the operator the flexibility of deciding whether to charge subscribers per service, as a package of services or per SMS sent.  Alternatively some operators may choose not to charge for these OTA services, seeing them purely as a way to increase revenues by increasing customer satisfaction and reducing churn.In addition, OTA is equally effective at revenue generation abroad. Through OTA technology, operators can keep their subscribers attached to a partner's network when roaming, which ensures that revenue streams are maintained.

Eliminating the recall revenue drain
As mobile phones become more complex and feature-rich, software glitches are increasingly commonplace. This is further aggravated by shorter time-to-market which leaves less room for thorough testing and increases the likelihood of widespread recalls  a major setback experienced by 3 and DoCoMo in recent years.While upgrading PC software via the Internet is routine, firmware updates for mobile phones are still very manual and expensive. Customers suffer the inconvenience of visiting service centres to fix their phones.By updating faulty software and fixing bugs remotely, OTA technology could potentially eliminate the cost of recalling and replacing handsets and return this lost revenue to the operators  balance sheets, improving customer service in the process.

Battling the virus threat
Earlier this year, the first wireless worm was detected targeting smartphones. As more and more computer functionality is added to mobile phones, the risk from hackers and viruses will undoubtedly increase.  To help stay ahead, operators are starting to use OTA software management to distribute virus protection and software patches wirelessly to end-users anywhere on a network. Rather than allowing viruses to proliferate, operators can use OTA to provide the necessary security before these attacks ever occur by filtering or blocking access from non-trusted sources to the handset.

Overcoming barriers to OTA
While OTA can deliver major revenue and service benefits to operators, its implementation is not without obstacles. Reassuringly, most of these can be overcome by sensible planning.First, the threat of mobile phone viruses means that security is essential when using OTA to modify the content of SIM cards or transmit additional information. However, operators keep SIM cards secure by encrypting communications and securing the link between back-end systems and subscriber's mobile phones using GSM 03.48 transport security.Secondly, when considering OTA solutions, operators should ensure that the technology complies with industry standards such as OMA (SyncML) DM and can integrate with complementary applications.  Operators should not put themselves in a position where they would need to replace functioning back-end systems to accommodate OTA technology.

Into the future
Today, OTA technology offers a practical solution to the age-old problem of how to service and upgrade handsets without the owner being present. What's more, there are genuine improvements to look forward to. OTA can be used to transmit information to next generation cards like USIM (UTMS SIMs), which support 3G services. Not only do USIM cards contain a link that automatically identifies a subscriber, they can receive OTA applications over GPRS, which is much quicker and more efficient than SMS. In addition, USIM cards provide storage for subscription and subscriber related information, giving users more opportunity to personalise services, which in turn builds customer loyalty. When you consider these technology enhancements, the conclusion has to be that both the present and future look unequivocally bright for OTA.     

Joos Cadonau, product manager, Sicap can be contacted via tel: +41 31 978 9090 www.sicap.com[l=www.sicap.com/]http://www.sicap.com/[/l]

With communications technology now filling every conceivable  area of our daily lives, Rob House reckons that – for the sanity of all – responsible management of communications should be firmly placed on the agenda

Communications are everywhere. Internet, e-mail, mobile and fixed phones, text and video messaging, voicemail...we have made the technology all-pervasive. But is it invasive? We've all been irritated by information overload, stressed by multiple messages, and exasperated by the behaviour of other users.
Working in the communications business, we seem to be the worst culprits of all. How many of us check e-mail in an almost addictive way? How many of us can't – just can't – switch off the mobile? How many meetings have dragged on and on because of interruptions to make or take calls? How many train journeys are made unnecessarily noisy by the caricature person on the mobile phone? And was it you?
How complicated is it for someone to turn off, or even just turn down, their ring tone? Or to speak softly?We are now all technology-competent. We use whatever we're sold, or whatever we're told to use. And, largely, we'd be lost without it. But it is also essential to know what is socially acceptable when using technology – that is, if you are to avoid the dangers of being treated like an outcast. Human relationships are still vital to success – and sometimes we tend to forget this. We promote the technology and devices upon which people's personal and professional lives are becoming increasingly dependant, but are we guilty of ignoring the protocols of technology etiquette?
We are a mobile society: business professionals and technicians tote wireless phones; mobiles have become fashion statements for teenagers; phones ring in meetings and loud conversations are conducted on public transport. The use of data is different, being less intrusive. But the ease with which e-mails can be sent to PCs and PDAs contributes to information overload.
We now receive 64 times more information than we did 25 years ago and growth continues: in fact, the curve is exponential. So, Siemens Communications in the UK set out to find out how effectively this communications revolution was being managed. The company commissioned a study into the etiquette of business communications in the digital age, which was undertaken by Surrey Social and Market Research (SSMR) at the University of Surrey, Guildford, England, with additional analysis by the University's Digital World Research Centre.
Seeking to determine attitudes and opinions with regard to acceptable communications practices, the research looked into the way in which today's business communications are affecting workers' attitudes, performance and interaction – and concluded that too much technology can make you SAD.
The new SAD factor
A few years ago, researchers in Scandinavia identified a condition known as Seasonal Affectiveness Disorder (SAD) caused by prolonged periods working without much available natural light.
The Siemens study reveals a new form of SAD that can affect workers all year round – especially those of us exposed to communications technology. Mismanagement of communications tools can be a root cause of workplace Stress, Anger and Distraction (SAD). The research findings clearly demonstrate that an over-reliance on communications is becoming a friction point in offices, causing stress which is affecting personal relationships both at work and at home.
Technology has given us a myriad of ways of communicating. We have desktop and mobile phones as well as PDAs and notebook PCs that can be used as softphones. We use the Internet, intranets and extranets, as well as public and private networks, both wireline and wireless. It is hard to imagine a communications landscape more fragmented than the one we currently endure. With all the new technology, Siemens has estimated that trying to get in touch with a colleague can waste an average of 30 minutes each day for each knowledge worker, which equates to a UK national wage bill of some £22bn per annum.
The research identified an underlying demand for the better management of availability and for integrated communications systems. And, ironically, it highlighted the fact that many office workers resent the interruptions that communications caused to meetings and workflow, but at the same time demanded almost instant contact when trying to reach colleagues.
So, how do we cope without drowning in the digital mire? Well, a bit of old-fashioned courtesy is a good start, coupled with implementing a system that controls your communications, rather than letting them control you.
Working with the University teams, Siemens has devised Eight Simple Rules of business etiquette to act as employer and employee guidelines to working behaviour.
1. Have your mobile off or on silent in meetings: The research showed that only 11 per cent of business users think it acceptable to have a mobile on during a meeting
2. Change your mobile voicemail to request text for urgent messages:Texting is generally thought to be too informal for business use and implies that you cannot be bothered to speak to someone. However, its use by request or prior arrangement for messaging has some potential.
3. Turn your device screens off when holding meetings in your office:74 per cent of respondents felt it unacceptable to read e-mail during an office meeting
4. If you are expecting an urgent call apologise and warn others in advance:The research was clear that interrupting a meeting to take a call should only be undertaken with prior warning and for urgent matters.
5. The person you are talking to deserves your full attention:11 per cent of respondents felt that an emergency was the only acceptable use of a mobile phone during a face-to-face meeting or discussion.
6. Hold private calls in private places:Clearly some calls – business and personal – are inappropriate for public places.
7. Break out of e-mail jail – talk to your colleagues:In many cases e-mail is becoming the easy option  and is being overused – overuse actually reduces its effectiveness.
8. Technology is not power – it doesn't signify your importance:Mobile phones and other personal devices do not signify a person's importance.
Interestingly, only slightly more than 50 per cent of respondents felt that it was inappropriate to use any form of IT equipment in a meeting or when talking to a colleague. Subject matter, location and relationships were all factors in determining how someone behaves in a meeting – with relationships being perhaps the most critical. Meetings now cover a wide range of discussions and many are informal and relaxed – on these occasions, interruptions are more acceptable if they are sufficiently important.
The University's research supports Siemens' own findings concerning availability management, a key feature in OpenScape – the company's presence-based application that utilises Microsoft's Live Communication Server infrastructure. Availability management applications like this allow users to flag to their colleagues their degree of availability and their preferred method of contact – integrating voice, e-mail, mobile, voicemail and text messaging systems to maximise contactability while minimising intrusion. In short, availability management applications are able to deliver the benefits of managing communications – such as eliminating the risk of missing an authorised, important, interruption, which traditional behavioural approaches are unable to filter – as suggested by the research, but without the manual intervention overheads.
Surely it is time that technology went back to the future and gave us the equivalent of everybody being in the same location at the same time and being able to communicate in real time? We need to enable better, less stressful ways of communicating and collaborating, starting with voice-data convergence and instant messaging (IM). IM is an application that uses icons to show the 'presence' – on-line or off-line – of nominated colleagues ('buddies' in Internet parlance). Note also that IM is actually a misnomer since it's used to communicate in real-time; e-mail is a messaging medium.
IP phones are, in effect, data devices that are visible to the network. What availability applications achieve is to develop and integrate IM applications that use icons to indicate presence and availability. This means that you do not waste time calling parties who are busy and you spend more time communicating and less time messaging.
IM programs also allow users to display additional availability information alongside the presence icon. Availability denotes a persons willingness to communicate and it is based on preferences and policies – i.e. it is managed at both the individual and corporate levels.
Who, what, when and where
Managed availability therefore solves the 'who, what, when and where' of communications. Presence and availability management tools put users firmly in charge of their communication devices. People can even leave their phone on during an important meeting confident in the knowledge that it will only ring in a genuine emergency. Why? Because users define their own rules that help them decrease interruption while simultaneously increasing their availability.
Presence and management are powerful communications parameters that minimise telephone tag, thereby boosting personal productivity, yet at the same time reducing stress. They also allow one colleague to talk to another immediately when there is a need to react to an event or an urgent issue.
Introducing real-time managed communications is the quickest way of cheering up the SAD office worker. The trick is to ensure that you control the technology, rather than it controlling you.

Rob House is Head of Collaboration and Integrity Solutions for Siemens Communications and can be contacted via tel: +44 1908 855 000; e-mail: rob.house@siemens.com  www.siemenscomms.co.uk

Maria Martinez, Corporate Vice President, Communications Sector, Microsoft Corporation, tells Alun Lewis why she believes the software giant is uniquely placed to help drive the telecommunications sector

Transformation seems to be the name of the game in telecommunications these days. While the financial discipline of the last few years has to remain, there are a host of new challenges on the horizon to deal with – from VoIP to the addition of content services to traditional service portfolios.European Communications– Alun Lewis caught up with one of the architects of this diverse new world at the TeleManagement's recent conference in Long Beach, California, meeting Maria Martinez, Corporate Vice President, Communications Sector, Microsoft Corporation.

AL: Maria, your keynote speech focused very much on some of the challenges facing us as an industry. Can you summarise these as you see them? MM: For a start, there's a tremendous amount of FUD – fear, uncertainty, and doubt – out there. We all know that convergence is changing the industry in a big way and that it's a big challenge to plan where a business should go in this new environment. However, figuring out which technology will take you there can sometimes be even more difficult.According to Gartner, the worldwide revenue for telecommunications services and equipment is only expected to grow 3.9 per cent by 2007 – down from 9.7 per cent in 2003. What's most interesting is the role that software is playing in this growth. Software will grow at a rate nearly 10 per cent by 2007. So, if software is clearly a key growth area that is contributing to the overall industry improvement, it's surely more a question of "how can we use software to create new services and revenue?" 
AL: And what's Microsoft's strategy in this space?
MM: In the final analysis, convergence will only truly come to life through software-powered service networks. Microsoft's committed to the telecommunications space and we've made three big commitments that will help companies survive, thrive, and win in this newly converged marketplace.
Firstly, we're simplifying relationships across the board between application developers, systems integrators, content owners, distribution channels, services providers, and end users. Microsoft has important technologies and significant partnerships in all of these areas, with over six million developers and thousands of partners – now delivering mission critical applications, the largest databases in the world, delivering content to mobile phones, OSS/BSS systems and recently large billing applications.
Turning such a highly complex communications services value chain into a profitable business requires dealing very efficiently with many issues such as service aggregation, business process automation, business-to-business transactions and end-to-end quality of service management. The group I lead at Microsoft – called the Communications Sector Group – is today bringing all of Microsoft's internal assets together with industry partnerships in a co-ordinated way.
Secondly, we're facilitating the deployment of those rapid and cost-effective breakaway applications and services that will define success in rapidly changing markets. A great example of this is how BT joined forces with Microsoft to launch a one-stop-shop IT and broadband solution, including Hosted Exchange – an innovative first for small businesses in the UK. We've also helped AT&T Wireless differentiate their mobile data services through a portal that improves the end user experience of provisioning a mobile phone. Another example is our recently announced IP Television solution that's in trial now with several service providers around the world.
The solutions we are building around collaboration, hosted services, media and entertainment are designed to get to service providers to market quickly with the minimum investment in a way that they can rapidly monetize. But this new set of services demanded by the market creates unprecedented challenges for the integration of these platforms with existing OSS/BSS environments – which is where I see the TeleManagement Forum's New Generation OSS (NGOSS) effort playing a key role.
Finally, we're providing our service provider customers with a multi-services platform that offers the best opportunity to extend and differentiate new service offerings – while also reducing overall costs. Our biggest contribution in this area is our commitment to Web Services and driving standardisation through our joint efforts with IBM, Vodafone and others. Web services are the universal connectivity layer that will solve the many interoperability challenges.
AL: Obviously one of the biggest shifts underway is towards universal IP and an end to the old circuit switched environment. How's Microsoft interpreting that change?
MM: Today, IP, mobile cellular and broadband have emerged and are all pretty much ubiquitous. IP is now the leading protocol and forms the basis for most of the new services out there, whether through data, voice or video or the integration of all of them. Microsoft strongly supports standards like TCP/IP, IPv6, http, XML and SOAP, as well as the development and standardisation of key technologies like Windows Media and Digital Rights Management.
In transport, where IP is the basis for most of the new services, security and quality of service are vitally important. But the introduction of IP is forcing a change to a new business model in which service providers are no longer paid by distance.
Revenue must instead be made up in services and content. Here, developers using Microsoft platforms are driving solutions that include ring tones, music, video-on-demand and voice over IP for a unified communications experience, and innovative data services such as location and tracking information. Content provision is essentially about relationships, and that means having a set of partners who can build new and compelling offerings, increase distribution, and raise market share.
AL: Microsoft's business breadth must be a significant help in enabling this cooperation.
MM: Partnerships are definitely the key to succeeding in a converged world and, at Microsoft, around 96 per cent of our revenue is delivered through our partners. We have an existing base of thousands of best-of-breed partners who makes it easier than ever to streamline processes and solve business problems collaboratively. This means that service provider customers can pick the combination of partners and solutions that are right for their business needs – no one-size-fits-all, long-term commitment.
AL: And specifically in the OSS space?
MM: NGOSS is a critical piece of the puzzle when we integrate our services framework with a service provider's existing OSS/BSS network. We are designing Web Services interfaces that use the Telemanagement Forum's NGOSS specification to seamlessly integrate services with our customers' operational and business networks. We are very interested in partnering with other industry players to define Web Services interfaces in this area.
AL: Security and network integrity is also becoming a hot issue as we rely more and more on networked communications. What's the take from Redmond on this?
MM: Spam is a big issue that continually interferes with digital communications. We are working hard to educate the public and build anti-spam safeguards into our products to keep spam under control. We're also committed to pursuing legal action against spammers. Earlier this year, we teamed up with America Online, EarthLink, and Yahoo! to file the first major industry lawsuits under the new federal anti-spam law. And, several months ago at the RSA Conference, Bill Gates announced a detailed vision and proposal on how technology can be used to help put an end to spam. This included outlining our Co-ordinated Spam Reduction Initiative and technical specifications for the establishment of Sender ID for e-mail.
Addressing privacy concerns as new technology and services take hold is another challenge. Again, public education is the key here, with clear explanations of why information is needed, what information will be used for, and giving the consumer control over it. Our Chief Privacy Strategist, Peter Cullen, is leading this effort to keep consumers and businesses educated on privacy.
As always, security is a big concern for all of us, especially with the proliferation of new solutions and services that are arriving. Viruses, the risk of identity theft and other threats can have serious impacts along every link in the communications chain. Here again, we are working with service providers, software vendors, and even competitors, to define the legal environment, the processes and deliver the tools that will make the Internet safer. One of the ways we're working hard to improve security is by leading the formation of GIAIS, or the Global Infrastructure Alliance for Internet Safety. This organization provides technology and communications support to the worldwide service provider industry, and facilitates collaboration to help manage and improve security for millions of end users. During a recent virus attack, GIAIS members were able to e-mail 200 million Internet users worldwide within twenty-four hours of the attack to alert and advise them on specific actions to protect themselves from the virus.
And, of course, standards are also a big challenge. We will continue to drive web services standards across the board. We are also working with several standards organisations, like the TeleManagement Forum and the ITU Telecommunications Standardisation Sector, to further develop standards to best address the needs of the industry. 
AL: You mentioned earlier the term 'software-powered service networks.' What exactly do you mean by that?
MM: A network used to be defined in terms of physical nodes and physical links. A service network can be thought of in a similar way, except that the nodes are services – such as messaging, authentication and billing – and the links are provided by the Web Services interfaces.
For example, location and third party content can now be thought of as network 'nodes', that can be leveraged and easily interfaced with any other node on the network to develop richer and more dynamic service packages. These new nodes will therefore need to be manageable in the same sense as traditional network components – provisionable, meterable, measured against a service level agreement, and so on. The service network is not tied to any specific type of device or transport. In fact, it is an inherently cross-physical network, and cross-device – for example, the recent addition of voice communications to the Xbox Live network has taken gaming to a whole new level.
Now, there are a number of implications of this trend.
Firstly, it allows operators to leverage all current capabilities and investments of the current networks while allowing for much larger and more dynamic networks, as it includes many more 'nodes' and participants. Second, it brings the network world and application world together, which means that the business application people, IT people, as well as network people, are increasingly speaking a common language. Thirdly, it also means that features and applications that are exposed as services need to adhere to principles of network management, which many today do not.
Going a step further, for Microsoft this means:
• providing the tools and framework for creating, deploying and executing aggregated services – such as a 'price-check' service that automatically compares prices for a product on several e-commerce sites and displays the  information on a mobile phone.
• defining how applications and solutions can become well-managed services; and of course NGOSS is an important piece of this work.
We believe this approach will provide a powerful, flexible environment that will enable companies to choose the best possible directions and future strategy – and win. Change, after all, is a constant, and it always brings challenges and opportunities.                               

Alun Lewis is a freelance communications writer and consultant: alunlewis@compuserve.com [l=www.microsoft.com/]http://www.microsoft.com/[/l]

In the murky world of telecoms fraud, criminals are already sizing up next generation technology for any security weaknesses. So, operators should regard fraud management as an essential weapon in the fight – and not merely an afterthought. Jason Lane-Sellers explains

Fraud has been a thorn in the side of the telecommunications industry for decades. It is estimated that US$35-40 billion of revenue is lost annually on a global basis due to fraud (CFCA 2003) and this figure is likely to increase with the emergence of next-generation services. The cost is not only financial, as operators also run the risk of damage to their corporate reputations and customer relationships.
It is, therefore, hardly surprising that new research from leading telecoms analysts, Analysys, has revealed that fraud is becoming of increasing importance to operators (Operator Attitudes to Revenue Assurance 2004).  In order to tackle the problem effectively it is imperative that telecom operators understand where fraud is likely to occur. Consequently, education in fraud management is as important as the use of detection technology, particularly as techniques to misuse networks are continually being refined.
It is important to recognise that fraud does not necessarily have to be perpetrated by an external party; significant revenue can also be lost through internal fraud or fraud committed by other operators, who may be exploiting weaknesses in interconnect contracts or manipulating tariffs.
However, the main threat continues to be external fraud, perpetrated by individuals or organised criminal gangs. This can range from the illegal routing of calls through a company's switchboard, to more elaborate and complex fraud scams such as premium rate service attacks utilising SMS and GPRS services, or trojan programs placed on mobile devices. Next-generation services will become particularly attractive to fraudsters as potentially higher transaction volumes mean that the risk is changing from the loss of call revenue to the wider world of content and e-commerce scams.
Having the correct fraud management practices in place will be essential, as the move to next-generation services will result in increasingly immature and complex technologies entering the market, all of which are potentially more susceptible to fraud. The recent Analysys survey revealed that there appears to be a widening product 'planning gap' with fewer operators taking revenue assurance matters, such as fraud, into account when planning communication products – which will doubtless lead to more widespread fraud.
Much of this has to do with operators seeing next-generation services as major revenue opportunities and therefore launching services very quickly in order to attract subscribers and gain competitive advantage. Consequently, issues such as fraud management often end up as an afterthought. For instance, as operators have tried to sign up customers quickly, they have kept the subscription process quite simple, which has provided many fraudsters with easy access to networks through basic subscription and identity fraud.
Operators are likely to become even more vulnerable once better handsets and improved content becomes available, as these will be of greater value to the fraudster. Handsets will be targeted for physical theft because of their higher value and immediate access to highly personal information. In addition, by providing open web and Java access to services, fraudsters can potentially download content, then resell it without authorisation, resulting in operators and content providers missing out on due revenue. The reselling of content could also impact on an operator's brand in the near future, particularly with the proliferation of adult and illegal content.
The growing number and type of services combined with increasingly complex value chains has resulted in operators moving further away from the customer, meaning that it has become much more difficult for operators to identify new, as well as conventional, fraud patterns simultaneously. 
However, the latest fraud detection systems, which incorporate event 'fingerprinting' technology, are seen as going a long way towards alleviating the problem. Event-fingerprinting technology allows operators to monitor event patterns in real-time and complements existing rules-based and AI (artificial intelligence) fraud-detection engines to provide a third 'in-line' detection method.  This information can then be directly fed into the fraud case-building process adding to data that has already been interpreted and integrated to provide operators with fraud alarms.
Event fingerprinting allows operators to recognise individuals or communities that have previously been identified as being of interest for investigation and monitoring. Even though a fraudster's given identity may have changed, their methods and communications patterns may not. By identifying communication behaviour, operators can create fingerprint-enhanced profiles to verify whether any fraudulent activity is taking place. Such systems will be of particular benefit to mobile operators, especially those in the pre-paid arena. They will be able to detect customers with a previous fraud history when they take out service on new pre-pay mobiles.  Previously they would have been identified as new customers, rather than existing customers on new phones taking advantage of new contract offers.
Problems for operators 
The move to IP-based networks will also pose problems for operators, as managing fraud will become more an IT, rather than strictly a telecoms, issue. For example, IP networks will be more prone to attacks from hackers and viruses in the same way that traditional IT networks have been. This means that operators will need to adopt an IT culture of regular system and software upgrades. 
The ability to detect VoIP calls in real-time will also be a key requirement in the next-generation environment.  By having an 'always-on' real-time view of VoIP events across the network, operators will be able to detect any anomalous activity and close down a VoIP session immediately.
Additionally, VoIP detection will allow carriers to enforce local regulations on the legality of VoIP calls. Appropriate and effective monitoring of customer activity will be essential, but operators need to tread carefully, as there is a fine line between effective monitoring and encroaching on a customer's privacy.
It is well established that the longer a fraud is allowed to continue, the greater the losses to the operator.  Managing and tackling fraud in a next-generation environment will require much more highly automated techniques that work in real-time. By creating real-time boundaries, operators will be able to start protecting themselves from fraudulent activity. In order to help identify new fraud threats and become more efficient in managing the problem, fraud management systems will have had to evolve as quickly as new telecoms services, otherwise operators will be playing constant catch up to the fraudsters.

Jason Lane-Sellers, Fraud Product Marketing Manager, Azure, can be contacted via tel: +44 207 826 5300; e-mail: jason.lane-sellers@azuresolutions.com

With jargon aplenty, John Blake reckons that companies should be carefully considering all the options before taking the VoIP plunge...

Voice over IP has been around for years but it is only in the last 12 months that it has started to gain traction, moving beyond the early adopters to mainstream customers beginning to consider it as a viable alternative to traditional telephony.
The impetus to upgrade to VoIP is coming from many different angles, not least from customer demand and manufacturer and service provider commitment to the new generation of voice services. The fact that it is now a 'hot issue' reflects the coming of the 'all IP' phenomenon in the corporate sector and the growth of broadband among smaller businesses and the residential market.
So is this renewed enthusiasm for the technology proof that VoIP has thrown off its old reputation as an unreliable and second-rate voice service?  The answer is that it is certainly starting to, but the key to this lies in raising awareness that VoIP is not a stand-alone technology, but dependent upon the network that delivers it.
The promise of advanced and more flexible communications and the lure of cost savings are encouraging enterprises both big and small to look to the technology. But the terminology can be confusing. VoIP covers an array of different types of digitally packetised voice communications. While IPT can be hosted or company managed communications carried over an IP network via an IP device, these services together with Voice-over-DSL-broadband and VoIP via a standard Private Branch Exchange (PBX), technically fall under the umbrella term of VoIP.
The platform for VoIP
Despite its name, VoIP can be run over a number of different network technologies. To illustrate this point, let's look in more detail at the different types of network VoIP can be delivered over and why companies are opting to implement them.
The trend towards an 'all IP' communications infrastructure is well underway. Established network providers around the world are investing in IP and looking to new revenue streams in the digital networked economy through new networked IT services. BT recently announced its own forward-looking plans to create a 21st Century network where all traffic, even that which is initiated on the PSTN, is routed over an IP network. It aims to have this up and running by 2008. In the corporate sector, many large international companies already have an IP Virtual Private Network (VPN) in place. These networks enable swifter and more flexible communications and are designed to carry advanced IP applications. They also have Quality of Service (QoS) technology, which ensures that mission-critical traffic, such as IP voice packets, is not disrupted in the Local Area Network (LAN) by other less important traffic like e-mail.
Multi Protocol Label Switching (MPLS)-based IP VPNs have Class of Service (CoS) technology which categorises traffic by importance into separate channels and ensures that, as traffic travels on to the Wide Area Network (WAN), it continues to be prioritised. So, for companies with an IP platform in place, is the decision to switch to VoIP simply a 'no brainer'?
Running all traffic over a single converged network  and thus having a single point of failure  brings its own complexities. However, increasingly companies are considering the productivity, time and cost saving benefits to outweigh the risks of network downtime. To counter this risk, managed network services will include resilience planning, while other measures designed to eliminate single points of failure.
One example of an organisation already reaping the benefits of having a single network for all its communications streams is business information company, Datamonitor. It upgraded its network to a managed MPLS-based IP VPN for both its voice and data traffic between key sites in the UK and US. By implementing this managed service, Datamonitor was freed from the need to invest heavily in, or run, its own infrastructure and has cut the costs of calls between these sites by 50 per cent.
But the switch to VoIP over a dedicated IP network is not just being made once the corporate data network has been upgraded. Having carried out a technology refresh at the end of 1999, to ensure their infrastructure would not be hit by potential 'millennium bugs', many companies are nearing the end of their five-year PBX lifecycles. They are therefore faced with the question of whether to renew their standard telephone exchange or to invest in an IP PBX  a more 'future proof' solution that supports next generation IP telephony. With pressure from manufacturers, who are increasingly announcing plans to phase out the production of traditional PBXs to focus on IP products, the impetus to move to VoIP is an important driver behind the decision by companies to migrate to a converged network.
Convergence solutions
Once the decision to implement VoIP via a dedicated IP network has been made, the options open to companies are twofold: gradual migration via a convergence VoIP product; or complete migration to a pure IP telephony environment:
" Convergence VoIP products connect traditional digital TDM phones via a PBX to a gateway, which turns TDM speech into IP for transport over the IP network. For many companies, gradual migration to VoIP via an IP gateway makes financial sense since it does not require huge upfront investment in expensive IP equipment. It also offers the company's employees the chance to adapt culturally to IP voice communications, a consideration that is not to be underestimated since for many the notion of picking up a phone and not hearing a ring tone can take time to come to terms with!
" Pure IPT is the most advanced and future proof form of VoIP, where all elements are IP based. This involves overhauling a company's telephony infrastructure and installing new IP equipment  including the applications, PBXs and the phones themselves. Pure IPT supports advanced IP communications such as video conferencing, file sharing and white boarding (providing the right software is in place). It is also the most forward-looking form of the technology enabling companies that embrace it to derive competitive advantage.  For organisations with a mainly office-based work force, including call centres, where the quality of voice and video communications are imperative to the success of their business, full migration to pure IPT is a sound choice. 
Abbey, one of the largest UK high street banks, recently installed BT's pure IPT solution Multimedia VoIP (MMVoIP), a hosted service that incorporates Cisco technology, and expects to save millions of pounds over the five years of the contract by putting telephony and data over a single network. MMVoIP is an example of an IPT product, which is hosted off-site by a carrier using IP Centrex. By using a hosted service, companies can avoid investing in an IP PBX since this is hosted on the service provider's site. For companies without a skilled IP networking department making large-scale IPT migrations, a hosted service is to be recommended.But IP is not the only technology that is luring customers to VoIP. DSL broadband in the form of Symmetric Digital Subscriber Line (SDSL) or Asymmetric Digital Subscriber Line (ADSL) also enables cost-effective transmission of voice over a data network. The UK alone already has 6 million broadband subscribers and the success of broadband voice providers like Skype and Vonage, and indeed products such as BT Communicator, have helped to raise the profile of this flavour of the technology. BT Communicator takes the concept a stage further by allowing customers to manage their communications centrally in a variety of ways, such as voice, email and text, switching easily from one to another at no extra cost.
In addition, we are seeing consumer market technology pushing functionality into the corporate space  many corporate workers are discovering new VoIP technologies at home and are expecting to see the same functionality at work. For many small and medium sized businesses, particularly those whose workforce is not predominantly made up of office workers or whose business model does not rely on voice communications, broadband VoIP is a good choice. It is very easy to install, requires minimal investment, offers a converged environment that allows employees to use voice, Instant Messenger and Internet at the same time and can achieve impressive cost savings on voice calls. There are a number of enterprise specific broadband services available. BT has just launched its own Business Broadband Voice service, which enables customers to make internet calls from any broadband internet connection, keeping the same number whether they're in the office or working remotely.
Companies considering broadband VoIP, however, should be aware that it does not offer traffic prioritisation capability and its voice quality can diminish if multiple users make calls at the same time.
The choice of voice
So to summarise, transmission of voice over broadband and IP networks looks set to become prevalent in corporate communications. Ensuring the quality and efficiency of these communications is key to maintaining a competitive edge in today's digital networked economy. With all the variants of VoIP technology available, choosing the right solution is a critical task. Companies looking to upgrade to packetised voice must first consider what network they need to guarantee quality calls are delivered and then carefully choose between convergence or pure IPT solutions, DIY or fully managed options. Making an informed decision will ensure that their corporate communications requirements are not merely met, but superseded.

John Blake, Head of International VoIP at BT, can be contacted via tel: +44 207 356 5000

Generating carrier class Ethernet services for business can be tricky, with a number of issues needing to be addressed if Quality of Service is to be assured. Robert Winters provides some guidance

Metro Ethernet service deployments are continuing apace on a global basis with a variety of service offerings and enabling technologies that offer 'real broadband' as an attractive alternative to lower bandwidth DSL and Cable products, high cost leased lines, ATM and Frame Relay. Depending on the region of deployment there are a number of Ethernet technology alternatives and build-out strategies in progress.
For example, in Europe many incumbent service providers are maximising their use of existing SDH transport assets by upgrading equipment to support Ethernet services. With the insertion of new Ethernet line cards a variety of non-switched pure Ethernet transport implementations such as GFP (Generic Framing Procedure) and more QoS oriented switched services such as VLANs (Virtual LAN) etc, coupled with the value add of MPLS, can now be offered and new revenue models instituted. 
Alongside the transport network there are also deployments using hybrid switching and routing technologies with next generation protocols such as MPLS (Muliprotocol Label Switching) and RPR (Resilient Packet Ring).
Along with the enhancements to existing SDH transport equipment and switched Ethernet networks there also exists a growing number of European state sponsored broadband initiatives in countries such as Sweden and Ireland. These programmes encourage the rollout of dark-fibre thus enabling competitive broadband service providers to build their networks over a ready-made physical layer transport medium. This type of initiative offers a reasonably clean slate approach to building an Ethernet product offering. The competitive service provider can at least focus on a deployment technology of choice, such as Ethernet over MPLS or RPR.
However, nothing is ever that easy. As can be imagined when business class services (as opposed to best effort home consumer type) are being guaranteed on an end-to-end basis between two major metropolitan areas, or indeed within the confines of a particular metro ring, there are challenges where 'Carrier Grade Ethernet QoS' is required. In this situation, service providers are expected to offer high bandwidth Ethernet services but also reliability, redundancy and high quality business class applications. Applications are increasingly delay and jitter sensitive, such as multicast video, time sensitive e-commerce web solutions and voice over IP (VoIP). This article focuses on the requirements of carrier grade Ethernet QoS at a layer 2 service and IP application level and assumes other carrier grade issues related to hardware redundancy (for example, MPLS fast reroute guarantees, inherent SDH protection and RPR protection) are addressed.
To capture the enormous enterprise business market with differentiated Carrier Grade Ethernet QoS products requires an understanding of the capabilities of Ethernet Services and the applications being transported over Ethernet.  What to look out for when offering Carrier Grade Ethernet QoS:
1. Understand the performance of QoS and CoS (Class of Service)
The IEEE 802.1p,q standards for Virtual LAN (VLAN) services offer a method for identifying a service stream, setting bandwidth and assigning a priority setting that determines class of service (CoS), rather than it being a pure QoS parameter in network implementations such as ATM which offers attributes such as CBR (constant bit rate) settings etc. So, in order to benefit from inherent Ethernet cost effectiveness and high bandwidth, plus offer QoS, there is also a need to bring additional quality metrics into the mix such as those offered through connection admission control (CAC) for end-to-end bandwidth and using MPLS signalling and traffic engineering capabilities. Ethernet industry-focused organisations, such as the Metro Ethernet Forum (MEF), have defined service types including Ethernet Line and LAN Services for point to point and point to multipoint/multipoint to multipoint services. 
CoS identifiers within these services can include specific source and destination MAC addresses, customer edge VLAN ID/IEEE 802.1p. Inspection of these packet headers requires processing power from network devices that may impact performance and requires verification of performance on a per service basis. The MEF has defined traffic profiles per CoS identifier that include Commited Information Rate (CIR), Peak Information Rate (PIR) and associated burst sizes. The provider can thus offer a greater number of service options to their customers. For example, a subscriber may connect to a metro Ethernet service at one location with 10Mbps user to network interface and another location at 100Mbps. The CIR in this case could be 10Mbps. More is to come. With the development of VPLS and loss-less packet transmission in metro Ethernet networks, the number of network options will continue to increase.
2. Check ability to guarantee service stream and IP application flow quality.
In the past it has been difficult to test on a per service and per application flow basis since traditional test methods relied on packet blasting at layer 2 only.
Basically, if the layer 2-service pipe was rated by RFC2544 throughput tests, this was generally viewed as a sufficient guarantee of quality. However, to really guarantee carrier grade Ethernet QoS, a far more granular approach is required. Service providers need to be confident that each service, each user and each IP application flow using that service are thoroughly tested for quality. 
Therefore, a pragmatic approach to testing is required whereby corporate Ethernet service and application flow models can be quickly built, then emulated and analysed for quality issues throughout the network under test with varying load and network status conditions. Using this test method, QoS boundaries can be realistically determined for both network services and application layers.

3. Guarantee end-to-end QoS
Ethernet services invariably start out their 'circuit life' as a layer 2 service (e.g. VLAN) originating at the customer premise into some point of aggregation and transport such as MPLS/RPR. The transport method can be a layer 3 VPN such as MPLS RFC2547 and then converted out the 'other side' back to the layer 2 VLAN and into the remote customer premise. It is important to test on an end to end basis. For example, with the possibility of an MPLS misconfiguration the number of hops and propogation time can change and requires end-to-end test for different traffic engineered service configurations. Also, it is important that each CoS priority assignment for 802.1 VLANs effectively maps onto MPLS EXP bits (equivalent quality metric) and back again. In situations involving MPLS fast reroute, how long does it really take for an individual end to end Ethernet service to get back to normal if a disruption occurs? Another consideration is restoration of service when normal conditions resume.
4. Understand the effects of TCP/IP application flows on 'guaranteed' Ethernet services bandwidth
Yes, we all know that Ethernet is a layer 2 service and you should not care about the IP and application layers above. However, when it comes to offering bandwidth guarantees you need to pay attention. It is extremely important to consider the effect of multiple TCP/IP application traffic flows running over a given layer 2 service and the potential side effects such as a drop in effective bandwidth. Due to TCP congestion notification schemes, layer 4-7 performance can rapidly degrade leaving customer bewildered and confused about the service specification and network performance. Rather than facing an irate customer who believes in getting the bandwidth pipe they paid for, it is worth testing a variety of scenarios with voice, video and data traffic in advance that can cause an excessive amount of dropped packets. In this way a service provider can better understand how and why this occurs, but also explain to customers why, for example, a 20Mbps service at layer 2 does not necessarily translate into the equivalent 'application bandwidth'. Of course, with full RFC2544 tests, throughput can be guaranteed at layer 2, but add real application TCP flows into the mix and see what happens.
5. Have a method of isolating Ethernet quality service issues from customer application problems
The ability to offer end-to-end carrier grade Ethernet QoS usually assumes the customer has the perfect set of well-behaved applications. Again, as an Ethernet services provider, the last thing needed is blame for a service issue caused by application problems. Aside from bandwidth hogging applications such as peer-to-peer (P2P) transactions that sponge bandwidth at an enormous rate, even standard IP applications such as Web, E-mail, VoIP, Multicast and Streaming applications can contribute to latency and loss of bandwidth. The ability to quickly isolate a problem source - and to prove it - is a key element in customer satisfaction.

Pressure on service providers and the equipment vendors supplying them to provide carrier grade Ethernet quality of service (QoS) guarantees are being heightened with the introduction of an array of value added applications such as Video on Demand, response time critical Web applications and VoIP. In order to improve competitive advantage there are a number of areas in which QoS issues can be determined and mitigated with practical quality boundaries worked out in which premium level business class services can be more effectively and confidently guaranteed.                                   

Robert Winters is Chief Marketing Officer and Co-founder Shenick Network Systems Limited, and can be contacted via tel: +353-1-2367002; e-mail: robert.winters@shenick.com [l=www.shenick.com/]http://www.shenick.com/[/l]

Ethernet is emerging as a key component for bridging the gaps from the access network to the customer demarcation, as Troy Larsen explains

As business and residential customers raise the bar on demand for new voice, data, and video services requiring higher bandwidth and faster speeds, Ethernet is poised to become a key technology in the subscriber access network environment. Ethernet in the First Mile (EFM) - or perhaps more appropriately Ethernet in the First Kilometre - is rapidly moving to the forefront of service provider options because of three major advantages: simplicity, scalability, and interoperability.
European service providers, in particular, have been quick to embrace Ethernet over fibre during the past few years as a 'low cost, no nonsense' approach to giving customers expanded services to meet soaring expectations. Europe's demand for metro access solutions rose quickly, perhaps due to the density of customers in most geographical areas putting businesses and consumers in close proximity to embedded fibre.
Today, most service providers, including incumbent local exchange carriers (ILECs) throughout North America, are bullish on Ethernet. With competition heating up and revenue opportunities for fibre to the home and business increasing, carriers sorely need solutions that can bring flexible, low cost bandwidth straight to the demarcation points.
According to a recent report from Current Analysis, a US-based telecom market analysis firm, Ethernet is one area that appears to have solid customer demand and North American ILECs are rolling out aggressive development plans. SBC, Verizon, BellSouth and Quest have eyed the opportunities and jumped in early to build national Ethernet coverage. MCI more recently launched plans to expand its Ethernet service portfolio and footprint, despite playing catch-up after having to work through WorldCom's Chapter 11 bankruptcy issues.
Ethernet evolution
Ethernet provides several cost-saving benefits for bringing high bandwidth services to customers. First and foremost, Ethernet has been, and will continue to be, the easiest protocol to implement in any type of network topology. It's not only simple to install and maintain, but it is ubiquitous throughout the industry. There are well-defined standards and a worldwide industry supply chain.
Scalability has always been an asset in Ethernet deployment. There is no denying that Ethernet, throughout its long history, has continually increased its bandwidth capacity, as well as its ability to handle larger and larger network topologies. For metro-area backbone networks, 10-Gigabit Ethernet is providing the same scalability advantage.
Interoperability is an issue for any telecom technology, new or old. The standards organisations, as well as interest groups such as the Metro Ethernet Forum, have spent a great deal of time and effort creating standards that make Ethernet the easiest protocol to implement - from the carrier network all the way down to the subscriber network.
Because of these and other advantages, Ethernet provides economical benefits that make it very attractive, particularly in access networks. Compared to asynchronous transfer mode (ATM), synchronous optical network (SONET), synchronous digital hierarchy (SDH), and other protocols, the cost difference is significant for the carrier. Ethernet not only lowers equipment costs, but it costs less to maintain in the network.
Leaping over the hurdles 
Despite its many advantages, Ethernet was plagued in its early implementations by a number of hurdles that prevented it from becoming the protocol of choice for connecting the First Mile. First, carrier customers required the highest (99.999 per cent) reliability and uptime. Although 'best effort' reliability is acceptable in many local or enterprise network situations, it is not tolerated in the telco realm. Because of that, carriers had been reluctant to invest money into deploying Ethernet until standards could provide a more acceptable reliability factor.
Another major hurdle was operation, administration, maintenance, and performance (OAM&P) monitoring. Since carriers were creating these networks to generate revenue, the management issue was not only an extension of reliability in general, but a key component for reducing operational expenses while creating competitive pricing structures. Profitability in the long term is essential.
Restoration capability was also an issue that needed to be addressed. Restoration simply means having a redundant link between a carrier's point-of-presence (PoP) and the customer site in the event of a major physical problem, such as a fibre cut. This is generally provided by having dual links to one PoP, known as 'single homing,' or separate links to two different PoPs, known as 'dual homing.'
To be effective, the switchover between the primary and secondary links must be quick enough to remain transparent. The benchmark for this is the < 50 ms switchover time offered by SONET. This precluded normal Ethernet restoration protocols, such as Spanning Tree, which can lose a significant number of packets during longer reconvergence times - unacceptable in a mission-critical network.
The answer to these and other obstacles to EFM viability is the IEEE's recently ratified 802.3ah standard. This standard provides a set of management tools with the specific goal of making Ethernet acceptable in the carrier environment for deployment in access networks. The 802.3ah standard calls for the ability to remotely manage a demarcation unit or the customer premise equipment (CPE) with full OAM&P.
Vendors of Ethernet access solutions are extending the 802.3ah standard to include further functionality. Addressing link restoration requirements, some vendors have introduced implementations that meet or even exceed < 50 ms switchover times. Other solutions enable carriers to offer and administer multi-tiered service level agreements (SLAs) using CPEs with built-in rate limiting capabilities.
Long-awaited standards
At its core, the long-awaited 802.3ah standard sets the groundwork for giving carriers the confidence to deploy today's Ethernet. They can now reap the benefits in managing Ethernet services to the customer premise while guaranteeing any level of service. Additionally, operational expenditures are minimised through remote management capabilities that eliminate the expensive truck rolls of the past.
Rarely considered when planning Ethernet access service is the need for a management agent at each network device. For example, a carrier normally manages the central office through a simple network management protocol (SNMP) that requires an IP address and a management agent. Using the same scheme for every CPE device makes management of the IP resources alone a huge burden. Worse, the added complexity this creates in the network results in reduced liability.
However, with the 802.3ah standard, the need for an IP address at the customer premise is eliminated. This not only simplifies the setup of each device - which today involves a plug-and-play module with auto-discovery features - but greatly simplifies maintenance requirements over the long term. All of this, of course, equates to less cost and more revenue opportunity.
Another overlooked aspect in access networks is packet size. The maximum size for IEEE standard Ethernet frames is 1522 bytes. However, many Ethernet and IP switches/routers make use of extensions to the frame that result in a larger maximum frame size. To enable all the commonly used protocols - as well as the new emerging IP/MPLS/Ethernet protocols - to run undisturbed between physical locations, service providers require access equipment to have the ability to transmit frame sizes from 64 bytes to a maximum of between 1548-9000 bytes.
Any Ethernet demarcation solution with a maximum frame size below 1600 bytes will substantially limit its attractiveness to service providers. Emerging protocols for transparent LAN services accept the fact that in full duplex mode, Ethernet has no practical limit on packet size. Emerging services and new protocols are already requesting mini-jumbo frames (1900 bytes) and in the future may request jumbo size packets that extend to 9000 bytes.
Finally, to ensure restoration features, carriers should look for an Ethernet services demarcation unit that has built-in 'link-state' redundancy capability. This is the ability to detect a loss of link on a primary interface and instantaneously switch to a redundant link. With the advent of pluggable optical interfaces and intelligent, remotely manageable CPE devices, it is possible today to provide a single solution that incorporates all the intelligence needed to provide a redundant link with transparent restoration if and when the customer requires it.
Ethernet revolution
The two basic service solutions for Ethernet access are Ethernet LAN (E-LAN) services and Ethernet Line (E-Line) services. E-LAN services provide multipoint-to-multipoint solutions over a wide-area network, sometimes referred to as a wide LAN solution. E-Line based services, on the other hand, are point-to-point in nature, and fall into three categories.
Simple point-to-point E-Line services physically connect one location directly to another. More advanced E-Line point-to-point services rely on a network with multi-service solutions, meaning that quality-of-service (QoS), advanced VLAN capabilities, circuit emulation, and possibly even encryption services are available at the demarcation or aggregation point. The third E-Line category is point-to-multipoint services wherein one site is connected to several other sites through the network.
Why Ethernet in the access network? Simply put, it is scalable, simplistic, and interoperable. Ethernet is the most widely used global protocol, supporting data, voice and video traffic while easily bridging the gap between provider and subscriber networks through transparent, but fully managed demarcation capability. At the end of the day, Ethernet meets every carrier's primary demand: a lower cost solution capable of reaping additional revenue from new and existing access networks.

Troy Larsen is technology marketing manager at MRV Communications

Alun Lewis talks to Gordon L Stitt and Martin van Schooten of Extreme Networks about the current market climate and the company’s strategy in the Ethernet arena

The scale and strategies involved in network investment often provides a pretty sensitive barometer for the general health of our businesses and our wider economies. When times are good, the network is a tool for growth - when times are bad, networks can also help companies and even whole industries compete more effectively with limited resources.

It is with these thoughts in mind that European Communications recently met with two senior members of Extreme Networks, Gordon L. Stitt, President and Chief Executive Officer, and Martin van Schooten, Vice President of Marketing, to discuss their take on the current opportunities for Ethernet in both the enterprise and public service sectors.

AL: Gentlemen, it was probably around two years ago that we last spoke, just as the industry was still headed south into a gathering recession. What's your take on the current situation now?
GLS: For a start - a lot more optimistic! It's important to remember that in the space of only a few years, both business and industrial strategies and the underlying technologies that they use have continued changing, even though the recession was obviously hitting the mainstream telecommunications sector pretty hard.
On a region-by-region basis, Asia is looking very positive in a number of countries thanks to the continued take up of broadband services by both consumer and business customers. Japan currently has the world's largest metro Ethernet network in Tokyo, with some 200,000 end points, while Ethernet is also being rolled out on a large scale in Korea, supporting a real hunger for bandwidth that's often being driven by domestic applications such as on-line gaming.
The picture is far more mixed in the US, where the post dotcom crash is still impacting on network operators. There's also uncertainty in that market, as operators continue to evaluate different access technologies. Because of the scale of investment that is faced in re-engineering their access networks, things are moving comparatively slowly there. That said, growth in the enterprise market for Ethernet solutions continues to increase steadily.
One of the interesting drivers for this - which we may see echoed in the EMEA region - is the increased demand for compliance with industry regulations, such as in the finance and healthcare sectors. Companies are finding out that unless they can substantially automate even more of their processes and improve the flow of information around their organisations, they'll both drown in paperwork and fail to meet their legal obligations.
We recently had a good example of this kind of development in a contract we signed earlier this year with Pine Digital Security, who are providing a Lawful Intercept solution to Dutch ISPs following the issue of a number of subpoenas to enforce this. This is an important application area, wherever you look around the globe and, in support of this, Extreme has also recently joined the Trusted Computing Group (TCG), which is an open industry standards organisation that produces specifications designed to protect critical data.
MvS: Generally speaking, Europe's showing a nice mix of opportunities for us. On one hand, many operators, both incumbents and CLECs, are actively deploying metro Ethernet networks, though usually on a rather piecemeal process. Their strategies though aren't set in stone yet and there are some interesting opportunities for Extreme emerging there.
In both the UK and other parts of the continent, there are emerging opportunities from Internet exchanges as well as from the ISPs themselves.
There's also a lot of Internet catch-up going on in the other various EMEA regions as well, such as in the 'new' Europe and in parts of the Middle East, such as Dubai, which is transforming itself into a major hub for electronic businesses of all types.
AL: So what's Extreme Networks itself been up to since we last spoke?
GLS: While business growth has been steady - and lately we haven't been hit as badly as some of our competitors - we've been able to take advantage of a relatively quiet period to continue investing in new technology and in the company's organisation, and have been able to stand back for a clear look at where the whole industry - and our customers - are heading.
For a start, we've seen a lot of VoIP start to be deployed in the enterprise space and that naturally puts a strain on the capabilities of the traditional data network. Alongside that, there's the continued convergence of the wired and wireless environments, most significantly in our case with the take-off of WiFi as an access carrier for both voice and data traffic. Voice is extremely intolerant of any delay or degradations in the Quality of Service and requires extremely high levels of availability if a company is to seriously consider moving off a traditional infrastructure - and being able to deliver that is exactly one of Extreme's main selling propositions.
MvS: Convergence in the public network space is also starting to pick up on the next wave of convergence, though this is obviously focused more on the 'triple play' kinds of offerings that involve video as well as more familiar voice and data connectivity services. Domestic customers who find their entertainment suddenly cut off because of network problems can be just as unforgiving as the most hypercritical CEO or CTO of a large business, so our QoS focus goes down extremely well in these markets. Supporting this approach, we're also able to enhance services still further through our strengths in policy management, ensuring that the right data arrives in the right place.
AL: And the wider drivers for growth in the business sector?
GLS: I'm afraid it's convergence again, but this time another aspect of it is involved. What we're also seeing in the enterprise space is an accelerating move to interlink communications and IT applications in ways - and at prices - that have never previously been really possible. While we're all familiar with dedicated call centres, where telecommunications and applications come together, these sorts of functionalities are now starting to be rolled out to support other business departments and applications.
That in turn means that the network has to be far more adaptable and intelligent than it ever had to be in the past. Any networking solution has to deliver a balance between all the hardware and software involved as a totality - and that's where the 'smarts' that Extreme Networks can deliver comes in.
Hardware's good at doing some things; software is good at doing others. Only by taking a sensibly holistic approach to the entire environment - and that means implicitly understanding the wider business objectives of your customer - can you hope to deliver a solution that is fit for purpose.
A good example of this is a recent European contract that we signed with Trader Media in the UK in August this year. Best known for their Auto Trader series of publications and owners of the UK's busiest automotive website - which processes over one million searches for cars on a busy day through both fixed and mobile services - the network for them really is their business. Using our policy management techniques, they're able to ensure that when the NAS (Network Attached Storage) devices that support their two Oracle databases synchronise, there is still ample bandwidth in the network for visitors to their internet sites to access the overlying Web services. These QoS factors also increase the frequency of data synchronisation, meaning that Auto Trader can stay and remain a truly up to date source of information for its customers.
Supporting the Trader Media is our EpiCenter software suite, which allows staff to manage the network from a single console, taking advantage of the open standards supported by EpiCenter to integrate the network with its existing systems management applications.
MvS: As we said, there's a similar high focus on reliability - irrespective of total network scale - in the carrier market. Here, we've been building on a technology we announced to the world towards the end of last year - EAPS, standing for Ethernet Automatic Protection Switching. Essentially what this does is replicate the kind of protection and survivability that's traditionally been enjoyed by SDH/SONET networks, but on an Ethernet topology.
We had BT Exact, BT's R&D organisation, carry out extensive test on the solution and they found that EAPS delivered sub 50-millisecond failover on both copper and fibre interfaces. With that kind of performance, carriers can now deploy a highly dependable - yet inexpensive - fibre-optic ring spanning hundreds of miles, combining EAPS in conjunction with a redundant design, with aggregation, edge and premise switching platform fully integrated into the entire solution.
AL: The old cliché has it that a network is always more than the sum of its parts. What's your strategy for working with other members of the networking community?
GLS: Extreme understands the need for openness and transparency whenever commercially possible, which is one reason why we've made the Application Programming Interfaces to our new operating systems announced last year available to other members of the networking community.
The sad truth is that if you buy from some of our competitors, you'll find yourself locked in to end-to-end, proprietary solutions that may deliver advantage in the short term, but ultimately limit the scope for technological - and hence commercial - freedom and adaptability.
We have a very broad range of partnerships with many leading players across the whole networking ecosystem. Probably one of the most significant of these is with Avaya, with whom we've recently signed an important agreement to support an ever-widening range of integrated applications, using SIP, for example, to link presence and availability information about staff or a mobile engineering force directly with voice and data communications and with IT systems.
To support this sort of environment, the network, naturally, has to do the job. It also has to be manageable, so we design our solutions to make the extraction of traffic management data as easy to use as possible. Again, openness is one of the key criteria essential for success in such a dynamic environment.
MvS: It's also worth mentioning that there's a bit of a paradox here that our customers often face - and it's one that our open strategy is designed to resolve efficiently and cost-effectively.
The network may be recognised as being at the heart of most businesses these days, irrespective of whether they're a national telecommunications service provider, or a medium sized business. The problem is that the network is going to have to change and adapt as the organisation itself adapts to changing market conditions and business opportunities, and as new applications are added or old legacy ones removed from the networking environment. With many historic networking solutions based on a 'one size fits all' model, it's often been a challenge to make the necessary changes without major service disruptions, followed by often extensive periods while the network is fine tuned to cope with the new world.
That's obviously a situation that is, frankly, unsupportable in today's 24/7 culture, and the reason why we've introduced our new network Operating System in a modular format, capable of being deployed in an incremental fashion to fit with new applications and interfaces.
AL: So it's finally looking like there's some light at the end of the networking tunnel?
GLS: Very much so! Service providers need new, value-added Ethernet-based services to generate additional revenues and protect their customer base from new competitors. Enterprises are adopting multi-service networking platforms to gain an early edge from converged IT and communications solutions. And both in their own ways are contributing to the revival of a sector that's been relatively dormant for far too long - though it's a far more pragmatic world than the fevered pace of the late '90s.                                         
Alun Lewis is a telecommunications writer and consultant  alunlewis@compuserve.com

Described as a new wave of opportunity, the Central and Eastern European markets could provide a new hunting ground for service providers. Alun Lewis talks to Wolfgang Hetlinger of T-Systems about the company’s strategy in these new markets

While it's an obvious truism that telecommunications knows no boundaries, for much of the last century there was a huge divide between the countries of Western Europe and the former Soviet Bloc. Now, as the EC extends its boundaries eastwards, and Russia, and other members of the CIS, take their first steps towards creating free markets, a new wave of opportunity in telecommunications is starting to appear. The benefits for both sides are potentially enormous. While both telecom service providers and enterprises in these regions will need access to Western technology and business methods, the West also has much to gain through the energy, enthusiasm and commitment of the emerging commercial cultures in these countries.
European Communications recently visited T-Systems International GmbH, an information and communications (ICT) service provider serving Deutsche Telekom's business customers worldwide – including telecommunications service providers. The basis for the discussion with Wolfgang Hetlinger, Executive Vice President Sales CEE, Telecommunications Industry, T-Systems, was T-Systems' focus on telecommunications service opportunities in Central and Eastern Europe.
AL: While everyone has naturally heard of Deutsche Telekom, fewer may know T-Systems in any depth. Can you give me a brief overview of the company?
WH: Certainly. We're one of the largest information and communications service and solution providers in Europe, with around 40,000 employees and a 2003 turnover of 10.6 billion euros. While our headquarters is in Frankfurt, with other offices scattered around Germany, we also have a growing presence in around 25 other countries. While we've only been in formal commercial existence since 2001, our experience goes back a lot further than that, and our teams of experts have played vital roles in supporting both members of the Deutsche Telekom family and other service providers for many years – as well as an incredibly broad set of industry sectors, such as finance, public sector, healthcare and manufacturing.
The telecommunications market makes up the main part of our business, contributing around a quarter of T-Systems' total revenues. While Deutsche Telekom naturally remains our biggest customer, other important service providers such as KPN/e-plus, mm02, AOL Deutschland, Kabel Deutschland and AT&T also rely on our experience and expertise.
AL: And now you're targeting Eastern Europe and the former CIS. How do you see opportunities emerging  there?
WH: Very positively – and that's the reason we've set up a specialised team to cover the region. It's important though to understand that each country is very different and opportunities must be approached sensitively! ICT strategies from both the carrier and enterprise perspective are implicitly linked to local realities – whether it's regulatory issues, the role of legacy infrastructure, or just the general cultural ways in which business is done locally.
With organisations like Gartner measuring growth in telecoms services in these regions at around seven or eight per cent a year, these are obviously attractive and often greenfield markets, when compared to the comparative steady state of telecoms investment in much of Western Europe.
Our strategies for entering these markets vary according to local conditions and, where possible, we initially partner with local organisations. In Hungary, for example, we already have quite a high profile through the work that we have been doing with Matav – part of the Deutsche Telekom Group. We're also increasingly active in Poland, Austria, the Czech and Slovak Republics, the former Yugoslavia and Turkey – and even as far away as Siberia. We also have a strategy of following our customers as they expand, so we're also getting involved in new regions by supporting VPN customers from other industry sectors as they enter fresh geographic regions.
Our corporate strapline is, after all, 'Managed Business Flexibility' – and that means that we often help our clients by taking over management of their technologies, while they decide on business strategy. This makes their businesses faster, more manoeuvrable, and far more powerful. We therefore have to practice what we preach to our customers! One size never fits all in ICT.
AL: What do you see as the most popular offerings that you have for these new territories?
WH: For our telco customers, a lot involves sharing our expertise in the Operations Support and Business Support Systems areas. Many of our customers are now rolling out broadband services such as DSL to their own customers who are hungry for bandwidth to support their own business applications. Trying to do that with systems and processes originally designed for circuit switched networks will quickly cripple any innovation, so we find our ability to automate many of the underlying processes is a very attractive proposition.
This can involve designing, building and delivering entire systems – or advising on the best processes to adopt to get the maximum return on network and service investments and their human resources. If our potential customers want evidence of our abilities in this area, they only have to look at Deutsche Telekom's domestic network to see the kind of quality that they will get.
One important aspect of this involves keeping our own integration strategies as open and as flexible as possible. Like an increasing number of service providers, we use the TeleManagement Forum's eTOM model to provide an important level of consistency, while simultaneously adopting a Commercial Off The Shelf (COTS) approach to OSS design, where we often carry out extensive pre-integration work before even making a bid.
We also have a policy of working with other industry leaders in particular technology areas. We already have close business relationships with Telcordia and Micromuse, who are also targeting these regions, for example, giving us access to even more product and expertise.
While each customer has their own particular set of issues, some are commonly shared and many involve getting the most from the network while keeping costs down. As convergence becomes a reality through the shift towards all-packet infrastructures, there's far less focus than there used to be on point solutions that fix a single problem. Our customers recognise the importance of treating the telecommunications value chain as an integrated whole and the holistic perspective that we take on this is much appreciated. Since we already work in all the sectors that a service provider is targeting, we can help them anticipate and understand their own customers' needs and ambitions.
AL: And what are the most important issues confronting your service provider customers?
WH: Ensuring quality of service across that whole value chain is an important aspect of our work. Many business users in these regions – or even Internet cafes – are paying a premium for broadband connectivity over WiFi or DSL and expect a similarly premium level of service. In this context, business processes are often more important than the underlying technologies, and so we often get deeply involved in advising on aspects of engineering workforce management, CRM and billing, as well as providing the supporting systems. Of particular interest to many new operators is our ability to provide an outsourced service for billing, using our sophisticated  operations office in Germany.
When it comes to the core network and other central operations of telco customers, we often find ourselves helping them make the transition to new network architectures. To do this successfully, they often have to confront many inherited problems that have accumulated over the years. For instance, operators commonly find problems with their network inventory – even to the extent of having effectively 'lost' up to thirty percent of their network assets through inaccurate data, incompatible data formats or even just through their engineering experts reaching retirement age or moving to new companies. We can help them recover from this dangerous position and turn their inventory systems into a real business enabler.
We can also help an operator's key executives make the best decisions by ensuring that they're presented with the best management information possible. We can do this by integrating data flows from across all the different multi-vendor, multi-technology subsystems that they have in place and then presenting it coherently and consistently through management dashboard interfaces.
Finally, we're able to offer these services in a variety of different commercial models. Some may be risk-sharing partnerships, where our own revenues depend on the success of the service or network that we're supporting. In others, a customer might outsource the complete management of their infrastructure to us – allowing them to get on with their core business of developing and marketing attractive new services.
AL: Anticipating the future is always tricky in our industry. What do you see coming up on the horizon technologically?
WH: Number portability is an issue as it's becoming mandated by law in a number of countries in our target regions – and it's one that we already have extensive experience of. Content is naturally another hot topic as operators start to evaluate their strategies to deal with the so-called triple play services of voice, video and data. As we've been involved with these concepts since their earliest days, we find we're well positioned to advise on everything from portal design to the technologies involved in streaming video to managing digital copyright issues across different media and technologies.
AL: And your perception of the future of the region?
WH: In global terms, they might look like modest markets at the moment, but they have a huge potential in both directions. We see ourselves as long term partners to the region, helping to enable the free flow of best practice between our different countries and cultures. As one demonstration of our intention to engage, we're currently running a series of road shows, initially in Budapest, to help carry our message, face-to-face, across the region.
Alun Lewis is a telecommunications writer and consultant  alunlewis@compuserve.com

With broadband entertainment now becoming firmly established, the question of which services to offer and how they best be deployed is key for operators, says Murali Nemani

Service providers have long been debating the merits of entering the global broadband entertainment (BBE) space. Declining traditional revenues and aggressive new competitors have them looking for new revenue and business growth opportunities. In 2003, BBE deployments by service providers in many regions have demonstrated strong demand for entertainment services. It's no longer about entering the BBE market but rather about which entertainment services to offer and how best to deploy them.
Service providers are asking five fundamental questions when considering the BBE services market:
1. What are our market opportunities and challenges?
2. What are the prospective business models and which are most likely to succeed?
3. What key groups comprise the value chain and what roles do they play?
4. What is the optimal framework for BBE service deployment?
5. Which service providers have performed early trials and how has the market reacted?
Market opportunities and challenges
In Spring 2003, InSites E-Research and Consulting asked European Internet users to choose the most attractive set of advanced services and the price points they'd be willing to pay. Video on demand (VoD) ranked as the most sought after service both by males and females, followed by interactive TV and online gaming. Another study – the Cahners In-Stat study of broadband television subscribers – predicts that 15.9 million subscribers will take up this service by 2006.
The film industry has come to view online distribution as a welcomed tool in their negotiations with the ever-powerful video rental distributors. They have also begun to make content available online to early adopters around the world.
In support of this industry-wide momentum, the consumer electronics industry is developing a large number of broadband-ready devices, ranging from game consoles and set top boxes to mobile terminals. With all of these devices in the hands of consumers, the need for networks capable of delivering broadband content ready for consumer consumption becomes critical. Subsequently, a market enabled by consumer devices complimented by high-bandwidth networks will accelerate adoption rates, and open new revenue streams to service providers.
These market changes offer service providers the business opportunities they need to offset declining voice revenues and reduce customer churn. With BBE services, service providers also have the opportunity to increase their average revenue per user (ARPU) while providing a solid defensive strategy against fast moving competitive providers.
For BBE, significant challenges lie in the opportunities themselves. The sheer complexity of managing the BBE value chain, the numerous alliance initiatives, and the mastery of technology integration all require significant effort in business design, customer trials and standardisation. The next few sections will help clarify some of the issues.
Prospective business models
BBE is about selling entertainment services such as video, music and gaming over broadband networks. In the BBE value chain – as in its offline equivalent – content flows from the content owners, through a distribution network, to the content consumers. In this case, the service provider operates the distribution network. How the service provider positions itself in the service delivery process will define its role in the entertainment services value chain. We'll look at three models here.
• The Public Garden model
In this model the service provider is limited to providing a transparent connectivity pipe between the consumers and the content owners. A consumer uses the service provider's network infrastructure to seek out the content owner's website, selects the desired content, and consumes it. This is much like today's Internet.
From a consumer's point of view, the choice in content sources is large. Anyone who has content can put it online. However, it is nearly impossible for the content provider to guarantee a satisfying user experience. For example, when the network connection between the content owner and the consumer is congested, the user experience is sacrificed – especially for video. Also, the wide spectrum of content sources and its fragmented nature often make it a very difficult and frustrating experience for consumers. With independent payment options for each content source, fear of potential fraud makes consumers reluctant to purchase on-line content.
Content providers not only establish no long-term customer relationships, but payment authentication and verification becomes quite cumbersome. Targeted marketing for their content is difficult, since they have no way to selectively target new consumers.
For service providers, this is an unattractive business model. They generate a flat connection fee from their broadband consumers, independent of bandwidth consumption. Since bandwidth consumption is a cost driver, service providers have no control over their network costs. In addition, content providers are using the service provider's infrastructure to generate business without compensating the service provider proportionally for the associated cost.
• The Walled Garden model
In the walled garden model, the consumer is put in a garden with pre-defined content. All the content is licensed by the service provider from the content providers and offered as a service pack to consumers. The service provider handles all content layout, authentication, billing, and quality of service (QoS).
For the consumer, this model eliminates the risk associated with credit card payments. The end-user experience is also guaranteed since there is only one party (the service provider) involved in the end-to-end network path. The limitation is that consumers are restricted in content choice.
For content providers, this model allows them to focus on their core business of producing content. They can then allocate the distribution of content to the service provider who handles the billing, customer support and QoS.
Service providers are now at the centre point of the value chain, with every penny flowing through their books. The trouble with this model is the service providers level of exposure, as significant resources will be dedicated to content aggregation, layout, maintenance and support.
• The Gated Garden model
In this model, the service provider establishes a tollgate concept through which many content providers can offer content in exchange for a revenue share with the service provider. Content providers have a vested interest in the success of this service offering and will likely promote the carrier's initiatives. Content owners focus on content creation; the service provider is responsible for the user experience through QoS, authentication, billing, etc. The main enabler for this model is a horizontal network platform that not only provides the features of the walled garden model, but also maintains a business-to-business interface with content parties.
BBE value chain and key contributors
There are three categories that represent the main bulk of the supply chain.
• Content Providers: movie studios, music labels, content aggregators, broadcasters and programmers, producing, aggregating and selling consumer content.
• Content Retailer: video distributors, cable and satellite distributors, and newly emerging telecom operators.
• Content Consumers: at the end of the value chain, they desire access to content any time, from anywhere and on any terminal.
Finding the business model that fits the needs of all three may seem straightforward on the surface, but the relationships that exist between these and other market players are complex. Consider:
• the integration of the many components from networking, application and consumer electronics vendors
• the often-overlapping value chain for service delivery with various players and technologies causing friction and affecting customer service
• the dynamic regulatory regime that plays a prominent role in determining the nature of the relationships between the market players
Optimal framework for BBE service deployment
For reasons noted above, the 'gated garden' architecture is emerging as the model of choice for carriers. It offers economies of scale as third-party content providers can easily plug into a pre-determined store-front; strong brand recognition allows for customer ownership and high customer service standards; innovative technology development enables continued service innovation and service differentiation. The optimal framework will include:
• consumer-desired content sources
• business relationships with BBE supply chain players
• a go-to-market service model
• an open network platform for service deployment
Early trials and market momentum
While BBE services are still relatively new, BBE service providers have begun to deliver standardised and scalable services and products. Market pioneers like Kingston Communications (UK) and Aliant (Canada) have played an important role in helping to develop innovative and cost-effective services tailored to the unique needs of end users.
Success stories like Italy's Fastweb – which is delivering voice, data and video services to tens of thousands of users over both fibre and DSL infrastructures – demonstrate the growth potential for BBE. Fastweb uses the walled garden model when it comes to managing their own VoD service via license agreements with movie studios, but has chosen to migrate to the gated garden model for scale and added variety of content. A similar trend is emerging in Japan, where competition from BB Cable TV is actively pushing the incumbent service provider to begin deploying triple play services. Yahoo Japan started with the public garden model for hosting content provided primarily by Yahoo, but has now migrated to the gated garden model, expanding their BBE offering to a wide variety of content providers.
The BBE market presents many new growth opportunities for service providers and content aggregators alike. While it is still too early to determine the clear market leaders, early successes in the space suggest that this market is becoming one of the new broadband battlefields.
While it is clear that telecommunications companies have made the decision to enter into this space, it remains to be seen how aggressive they will be in upgrading their network infrastructure and adopting the right business model for bandwidth-intensive entertainment services.
The opportunity is evident, but to seize it – and stand apart from the ever-growing crowd – requires courage, know-how, and the conviction to find the right partners with the right business model.                       

Murali Nemani is Director of Strategic Marketing for Alcatel's Fixed Communications Group (FCG), and can be contacted via Helen Simpson at e-mail: helen.j.simpson@alcatel.co.uk
A complete white paper on this topic is available from Alcatel's Broadband web site at [l=www.alcatel.com/broadband/]http://www.alcatel.com/broadband/[/l]



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