Advertorial for Alcatel-Lucent, autumn 2008, for Global Telecoms Business magazine, by Sue Tabbitt.

Alcatel-Lucent advertorial

Towards sustainable Fibre 2.0 developmentFibre transformation - the challenge and the opportunity
As consumers clamour to get more from their home communications and entertainment experience, they may well be wondering who's going to successfully deliver it, says Jean-Pierre Lartigue, vice-president oft , marketing & communications at , Alcatel-Lucent's Access division

The global communications industry is currently undergoing the largest and most far-reaching transformation in 50 years, as operators grapple with the challenge of extending very high-bandwidth value-added services to increasingly demanding consumers. The way they approach this will go a long way in determining who the winners and losers will be.

This is not just about bringing the last few hundred metres to the home with high-speed fibre cables, although this is clearly the ideal. It is a challenge on multiple levels, as operators attempt to cost-justify the investment needed to transform their infrastructures, establish their own value proposition, and nurture and feed end-user demand.

The good news is that the dramatic change being embarked on is creating an unprecedented opportunity for operators prepared to take on the challenge. With all of their experience, brand strength and existing customer relationships, who better than the solid, reliable telecoms operator to lead the mass consumer stampede towards the true digital home experience? This is a highly lucrative opportunity, too, with all of the service and content-based revenue, and customer loyalty, it will generate.

Keeping up with Generation Y

Our own global research consistently confirms large-scale demand for very high-bandwidth services, which is growing all the time. The digital home is fast becoming a reality, with consumers expecting to be able to replicate the work computing and communications experience wherever they are, and at any time of day or night. Not only do they want to be able to download and upload content at high speed, they want to be able to share and collaborate on this content interactively, in real time, with friends and virtual communities. They want a personalised user interface, and facilities such as the ability to back up valued content over the network too, just as they might have at work.

At the same time, they are growing tired of struggling to move content from one type of device and application to another, wishing it were easier to transfer footage from the TV to the PC, or vice versa, or from a mobile phone to a printer, or music from a web site to their portable music device. One by one, these technical hurdles are being overcome, paving the way for the telecoms industry to integrate the total experience. Drawing all of this together is the bandwidth to make content transfer quick and effortless.

Pacing the fibre load

xDSL services have done much to whet the public's appetite for high-speed services, providing an adequate potential 5-10 Mbps bandwidth downstream and 1-2 Mbps upstream. Next-generation access makes this pale into insignificance however, increasing speeds beyond 100Mbps where fibre crosses the threshold into the living-room, bringing down the final barriers to key services such as HDTV, personal multimedia content exchanges, participation TV, enriched video-telephony or teleworking.

Beyond these bandwidth-hungry services, fibre, blended with mobile, also has an opportunity to dramatically improve the customer experience, and presents the chance for service providers to upsell (eg network-based storage) and differentiate their brand (eg through new home-based services or enhanced vertical portals).

Operators concerned about the associated investment may be worrying unnecessarily. Making a radical change overnight isn't practical or possible, but making the change in mindset and strategy is. The eventual change will be colossal, but it is possible to do it gradually - and with help.

In gGreen-field areas, in communities with low fibre cable installation costs or wheren copper is obsolete, there is often a case for taking fibre straight to the home. Yet, in

In countries with high cable penetration, the competitive pressure for 'very high speed' is high on a national scale. At the same time, the entrenched copper infrastructure, and the high cost and laboriously slow and disruptive process of digging up roads to replace this with fibre cabling into every postal address, means that many operators have been forced to make do with a relatively short-term fix - taking fibre to the most economical point and combining this with VDSL2 over copper to reach individual premises. This has given operators speed to market, a relatively rapid return on investment, a hold over customers and the chance to encourage consumer demand for high-speed services.

Now Over time, they will must leverage this initial investment to evolve towards a full, consolidated and streamlined FTTH infrastructure…

Unlikely partnerships?

The good news is that operators don't have to do everything themselves. The fibre revolution turns everything on its head. This is a chance to break the mould, enter the unknown, and try new approaches.

Because the very-high-bandwidth opportunity is about so much more than infrastructure (services, ultimately, will be determined by applications, content, support at home, and service quality and flexibility), operators need to be canny about where they focus their energy - and their budgets.

The next-generation communications market depends on alliances. As well as giving each party the chance to play to their strengths, this also means they can share the cost burden when it comes to making a sizeable investment.

In addition to synergistic ecosystems between infrastructure owners, content providers, hosting companies and service integrators and resellers, operators need to think further a-field, and strike up sustainable relationships with less obvious partners - such as local authorities or landowners. Access to passive infrastructure (such as trenches and ducts), often under the umbrella of the public sector or landlords, will be indeed a key enabler for nationwide FTTH coverage.

In cities, innovation abounds, as new buildings implement 'single-cable' strategies, integrating multiple services on one pipe into the premises, showing just what's possible when the economic case stacks up.

Innovative public-private partnerships will play an essential role, too, producing win-win situations that see under-served rural communities transformed through the roll-out of high-speed services. This would enable otherwise largely isolated areas to connect to the rest of the country, so that more people could work, learn and collaborate remotely, using rich content and a choice of media, encouraging people to stay where they are - rather than taking their earning potential to the big cities.

Mature fibre and 'digital home' technologies

Competitive pressures dictate that service providers simply cannot afford to ignore the call to transform their infrastructures, value propositions, business models and routes to market. Technology limitations are no longer the issue - fibre technology has now matured, standards have been bedded down and are rapidly adopted (in particular GPON), and the economics of owning and managing fibre equipment are proven (it accounts for higher concentration, and can support countless more consumers, producing savings on space, power and operational expenditure).

An urgent challenge for service providers is to develop a coordinated offering, allowing consumer experience continuity (in the home, on the move, through Internet vaulting), and consistency across user interfaces and portals, as well as convenience to interconnect all devices easily. The impact on operators' brand recognition, customer intimacy and operations scaling will be tremendous, pending operators' ability to federate a fragmented industry.

To do this, operators needs to address four dimensions: 1) develop efficient in-house communication technologies and wiring; 2) set up remotely managed inhouse IP networking with the residential gateway as a strategic head end; 3) propose a personalised and adaptive vertical portals strategy; 4) guarantee seamless end-to-end service integration (with Web 2.0, Mobile 2.0, IPTV, VoIP).
Unleashing the value curve to host lifestyles

The value-added opportunities for service providers are many and varied. Customised bundles and personalised content and views of that content will be important. Operators are likely to package applications, content and services differently for different user groups, increasing their appeal to consumers concerned about escalating costs, maximising take-up numbers, while increasing potential revenues from higher value services, where specialist content, additional security, superior service quality or faster speeds are needed, for example.

Demand is not an issue. It is more a question of focus and strategy. Operators should keep in mind the increasingly sophisticated consumer and the customer experience they've come to expect from the workplace, WiFi hotspots, and the flexibility and usability of their mobile phones and iPods. In this respect, service providers will have to see themselves as hosting the end-user experiences, and align their brand and advanced marketing to the specific lifestyle profiles of the customer segments they want to capture.

Anticipating the future

Having a long-term vision that extends beyond the next three years will be crucial, too. With such a rapid and accelerating pace of change in technology and communications market, predicting the future is becoming increasingly difficult, which is why developing an evolving, flexible, future-proof next-generation network is more imperative now than ever.

Before long, the digital home will be taken as a given and all eyes will be looking towards the smart home and extended user interfaces. This is already becoming a reality in markets such as South Korea. Intelligent fridges will take note of missing items, adding them to Internet shopping lists, and home-owners will be able to operate their air-conditioning, heating and surveillance systems remotely, from the office, using voice recognition. Gamers, meanwhile, will be immersed in the total 3D virtual experience. And so it goes on.

As the current generation grows up, it continues to expect more from the home communication, entertainment, learning and working experience. The multi-billion dollar question is, who will be provide it?