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Deliverable 12

“Migration paths towards fixed-mobile convergence”

November 2005

Migration paths towards fixed-mobile convergence of 62

Document Information

Contractual Date of Delivery: 30. 11. 2005

Actual Date of Delivery: 01. 12. 2005

Editor(s): Santiago Andrés Azcoitia, Pablo Torres Montero

Author(s): Renjish Kumar Kaleelazhicathu Ratna, Timo Smura (TKK), Santiago Andrés Azcoitia, Pablo Torres Montero, José Olivares Paret (Telefónica I+D), Theodoros Rokkas, Dimitris Katsianis (UoA), Thor-Gunnar Eskedal (Telenor), Jarmo Harno (Nokia)

Participant(s): TKK, Telefónica I+D, Telenor, UoA, Nokia

Workpackage: 6

Workpackage title: Fixed and mobile convergence economics

Workpackage leader: Renjish Kumar Kaleelazhicathu Ratna

Deliverable number: 12

Deliverable title: Migration paths towards fixed-mobile convergence

Est. Person-months: 8

Security: Public

Nature: Report

Version/Revision: 1.0

Total number of pages: 62

File name: ECOSYS_Del12_v1.0.doc

Abstract Fixed Mobile Convergence, i.e. the provision of telecom network and service capabilities independently of the access technique, is the latest phenomenon in the telecom industry. This deliverable analyse the drivers that permit FMC and its consequences in the telecom market. Furthermore regulatory and standardization initiatives are reviewed, and feasible scenarios are proposed for telecom agents to be able to compete in the convergent market.

Keywords Convergence, business model, telecommunication, IMS, Parlay, Wi-Fi, WiMAX, access network, integrated operator, MVNO, FVNO


Table of Contents Document Information ....................................................................................................2 Table of Contents............................................................................................................3 List of Figures .................................................................................................................5 Executive Summary.........................................................................................................6 1 INTRODUCTION .......................................................................................................8

1.1 Motivation .........................................................................................................8 1.2 Scope................................................................................................................8 1.3 Organization of the document.............................................................................9

2 CONVERGENCE ......................................................................................................10 2.1 Types of convergence ......................................................................................10 2.2 Drivers for convergence ...................................................................................12

2.2.1 Market drivers...........................................................................................13 2.2.2 Service drivers ..........................................................................................16 2.2.3 Technology drivers ....................................................................................16 2.2.4 User related and social drivers ...................................................................18

2.3 How convergence manifests itself .....................................................................19 2.3.1 Technology...............................................................................................19 2.3.2 Services....................................................................................................25 2.3.3 Industries and competition ........................................................................32 2.3.4 User behaviour..........................................................................................33

2.4 Consequences of convergence..........................................................................34 2.4.1 Regulatory issues ......................................................................................34 2.4.2 Service substitution ...................................................................................35 2.4.3 Market situation ........................................................................................35

2.5 Ongoing standardization efforts ........................................................................39 3 MIGRATION SCENARIOS.........................................................................................41

3.1 Fixed operator .................................................................................................41 3.1.1 Scenario 1: Fixed-Only Operator becomes MVNO ........................................41 3.1.2 Scenario 2: Fixed-only operator becomes MVNO with its own transport network 43 3.1.3 Scenario 3: Fixed-Only Operator deploys Wi-Fi/WiMAX Network...................45 3.1.4 Fixed Operator Migration Strategy..............................................................46

3.2 Mobile operator ...............................................................................................46 3.2.1 Scenario 1: New entrant as an FVNO..........................................................46 3.2.2 Scenario 2: Incumbent mobile operator converging broadband ....................48


3.3 Integrated operator .........................................................................................48 3.3.1 Scenario 1: Migration Scenario towards Common IP Service Platform...........48 3.3.2 Scenario 2: Migration of Service Platforms ..................................................50

3.4 Operators without existing access networks.......................................................57 3.4.1 Scenario 1: Fixed + mobile virtual network operators ..................................57 3.4.2 Scenario 2: 3rd party application/service providers.......................................58

4 CONCLUSION.........................................................................................................59 References ...................................................................................................................60 Acronyms .....................................................................................................................61


List of Figures Figure 1. Technological realization of convergence ..........................................................19 Figure 2. Generic Access Network Architecture [3GPP TS 43.318] ....................................22 Figure 3. Separation of control and data planes ..............................................................23 Figure 4. Convergent terminal stack ...............................................................................25 Figure 5. Converged services integration ........................................................................26 Figure 6. Evolution of convergent services ......................................................................27 Figure 7. Migration from vertical to horizontal layered structure with IP service platform ...28 Figure 8. SP interfaces to the service platform ................................................................29 Figure 9. Horizontally layered service support framework ................................................30 Figure 10. Popular illustration of industrial convergence ..................................................33 Figure 11. Technologies and value in the access network ................................................37 Figure 12. TISPAN standardization on converged networks..............................................40 Figure 13. Pure MVNO business model ...........................................................................42 Figure 14. MVNO with its own network ...........................................................................43 Figure 15. Business model for the MVNO with its own network ........................................44 Figure 16. Business model for a fixed operator with Wi-Fi access network ........................45 Figure 17. Migration phases and roles for new entrant ....................................................47 Figure 18. Convergence business model for new entrant .................................................47 Figure 19. Convergence business model for fixed & mobile operator ................................50 Figure 20. CPA platform environment .............................................................................52 Figure 21. IMS as part of Horizontal layered service support framework ...........................54 Figure 22. Stages of service platform migration...............................................................55 Figure 23. Common IP messaging platform.....................................................................56 Figure 24. Convergence business models for virtual network operators.............................57 Figure 25. 3rd party application/service provider business model ......................................58


Executive Summary

Although in its first steps, Fixed Mobile Convergence (FMC) is the latest convergence phenomenon called to shake the telecom market. In FMC case telecom services are provided to the customer independent of the access technique used. Convergence will appear at different levels such as user terminal, backbone network technology, tariffs and even at business or commercial levels as shown on the TIM and Telecom Italia fusion.

FMC aims to merge mobile and fixed telecom markets which have been completely separated until now. It is looking for a cost reduction by taking advantage of both business synergies, efficiency and simplicity in providing services to customers. FMC aims to reduce time to market of new services and standardize their development by means of standard service platforms. These changes are possible due to the increment on terminal processing capacity and their capability of operating with several access networks, all with sufficiently low power consumption. Furthermore VoIP technology enables backbone network convergence to an all IP network described in the latest IP Multimedia Subsystem (IMS) standard.

At the present time there is no specific regulation of FMC, nor a clear position concerning traditional voice telephony cannibalization by VoIP services: quite a lot of issues to be reviewed by regulators to predict impact of FMC to market. However, it seems clear that separation of mobile and fixed markets will disappear, allowing many agents to compete in a single telecom market. Fusions and alliances may appear in order to provide customers with services they want using the most suitable access technology available. Wireless nomadic access (Wi-Fi / WiMAX) is called to act as the bridge between fixed and mobile access technologies, allowing both fixed operators to offer mobility (especially when WiMAX 802.16e is deployed) without spectrum licenses, and mobile operator to offer higher bit rates at a cost of limited mobility without the huge expenditure of a fixed access network.

Operator strategies regarding competition in the convergent market depends on the operator’s background:

• Integrated operators owning both fixed and mobile access technologies are best positioned for FMC. With all the ingredients to build and provide convergent services their effort will be centred on network migration towards all IP network and establishing a new standard service platform.

• Fixed operator lacking of mobile access network must also provide mobility as a new value to its users. This may be achieved by one of the following ways, or even a mix of them:

o Reaching an agreement with a mobile operator to wholesale either the cellular access network, which will interoperate with the fixed backbone, or the whole service. This strategy relies on the feasibility of this contract, either by means of regulatory imposition to mobile operators (e.g. Denmark) or by means of bilateral agreement (e.g. BT and Vodafone to provide BT Fusion).

o Deploying a Wi-Fi / WiMAX access network. On the one hand fixed operator will somehow provide mobility by itself. On the other hand this requires investment and the mobility provided is limited, at least until WiMAX 802.16e standard is operative.


• Mobile Operator lacking of fixed access must provide stationary users the higher bit rates of fixed operators. Apart from this, as occurs to integrated operators, it must achieve network migration towards all IP and service platform migration towards new standards. This may be achieved by one or a mix of the following strategies:

o Using fixed operator network by means of unbundling contracts. Thus, xDSL access may interoperate with the backbone network of mobile operator. It might be possible to make wholesale contracts also with providers of Wi-Fi or WiMAX services.

o Deploying a Wi-Fi / WiMAX access network. On the one hand mobile operator will improve the bit rates of nomadic accesses. On the other hand bit rates reached are far below VDSL or FTTx rates reachable by its fixed competitors, and higher investment is required.

• Operators lacking of both mobile and fixed access networks have a chance to compete in the convergent market as a fixed + mobile virtual operator. Also there are several examples of 3rd party service providers, such as Skype, that may exploit convergent service platforms to add value to operator service portfolio with new innovative services.


1 INTRODUCTION

1.1 Motivation

According to Encyclopedia Britannica, "convergence means the act of converging and especially moving towards union or uniformity." More specifically, a recent trend of Fixed - mobile convergence (also called FMC) means the integration of wireline and wireless technologies and services to create a single and united telecommunication network.

FMC is not an entirely new development. Several operators have tested numerous convergent systems over the past decade. One of the largest tests in the late nineties involved DECT (Digital Enhanced Cordless Telecommunications), designed primarily for use at home or in the office, and GSM.DECT-GSM convergence never really took off, mainly because users had to switch calls manually when moving from the DECT network into the GSM network or vice versa, meaning that any on-going calls would be lost. Early converged handsets were also bulky and expensive.

Nowadays, FMC gives solution to that problem and it provides also many other additional functionalities. These are estimated to benefit the telecommunication industry through an increasing number of operators and vendors interested in this trend and a base of approximately 500 million customers.

Part of the current FMC's roll-out is understood as a response of the different agents within the telecommunication market to specific facts that recent statistical studies reflect, such as the increasing mobile traffic of voice and data in the last years and the end user’s tendency or preference of using just one handset to communicate with each other.

The FMC leads to a very sophisticated set of changes in the telecom scenario, its infrastructures and economics at different levels. This evolution, in a long-term basis, will be deployed according to different scenarios, drivers and parameters, which are the base of analysis exposed along this document; an evolution that is currently taking the first steps through the first pilots being carried out by some European and worldwide operators.

1.2 Scope

Three main areas are considerably influenced by FMC in the telecommunication value chain, those are: services, transport (including switching and proper data transport) and terminals.

This document gets into the detail of these aspects. The services that FMC will provide are key factors in terms of revenue generation and new opportunities for business and users. The techno-economic consequences of deploying a common service platform for both fixed and mobile services will be introduced. Transport issues are covered with the purpose of identifying and analysing the implications for carriers and network owners and studying the implementation of IMS Infrastructure as well as techno-economical requirements. An end-user based perspective regarding converged handsets, devices and range of services offered by the different types of operators is also explored.

Finally, migration scenarios for operators with different characteristics are identified.


1.3 Organization of the document

After this brief introduction and short scan along the origins of FMC, the second chapter of this deliverable explores the different existing types of convergence, along with the drivers that result in those different types of FMC and how convergence materializes down to the key areas it affects to: technology, service, business and industry, and users. Furthermore, we discuss the consequences of convergence in terms of regulation and market situation, finishing with the ongoing standardization processes.

Chapter 3 introduces some possible convergence scenarios that could take place depending on the telecom operator's background and existing assets. The future ECOSYS WP6 analyses of Fixed – Mobile Convergence will focus on these scenarios. These case analyses will provide a possibility to obtain important new information that cannot be achieved by mobile or fixed –specific analyses.


2 CONVERGENCE

Convergence has a wide scope spanning multiple technologies, services, markets and business models. The term “Fixed-Mobile Convergence” (FMC) is nowadays widely used to represent one of these phenomena. However, FMC can be interpreted in different ways. Some such definitions by different standards development organizations (SDO) and industry bodies are given as follows:

According to ETSI’s FMC ad hoc group, “Fixed and Mobile Convergence (FMC) is concerned with the provision of network and service capabilities, which are independent of the access technique. This does not necessarily imply the physical convergence of networks. It is concerned with the development of converged network capabilities and supporting standards. This set of standards may be used to offer a set of consistent services via fixed or mobile access to fixed or mobile, public or private networks.” (see [17])

According to FMCA [4], “Fixed-Mobile Convergence is a transition point in the telecommunications industry that will finally remove the distinctions between fixed and mobile networks, providing a superior experience to customers by creating seamless services using a combination of fixed broadband and local access wireless technologies to meet their needs in homes, offices, other buildings and on the go.”

According to ITU-T [9], FMC is defined as “Mechanism by which an IMT-2000 user can have his basic voice as well as other services through a fixed network as per his subscription options, capability of the access technology”.

FMC is also included as part of the requirements in Next Generation Network (NGN) initiative in ITU-T. Generalized mobility requirement in NGN defines FMC by decoupling the service provisioning from the underlying transport.

As is evident from all these definitions, today, there is no universally accepted definition of FMC. However, there are common aspects among each of these definitions. In this deliverable, we broadly define FMC, based on these common aspects, as the end-to-end provisioning of services independent of the underlying access and core network technologies. Our objective is mainly to focus on the issues that impact the fixed and mobile industry and market. Both these industries are witnessing convergence within as well as between them in terms of the networks, services, terminals and business models. There are also other industries such as broadcasting which plays a complementary role in fixed-mobile convergence. We consider these scenarios as well. However, but such complementary industries will not be studied exclusively.

2.1 Types of convergence

With the convergence between the fixed and mobile networks, telecommunication operators can provide services to users irrespective of their location, access technology, and terminal.

There are many different types of convergence; a classification of them is as follows [1]:

• Network convergence: in this case the same infrastructure is used by both the fixed and the mobile networks. The network is IP based and can support heterogeneous environments.

• Service convergence: the offer of integrated fixed-mobile services, the association with a one-number solution and the development of new services. There is a


continuity of services and contents. Services are broadband based and mobility is supported.

• Terminal convergence: a single terminal with the ability to access different networks and/or services with user friendly interface (low-cost, dual-use cellular and Wi-Fi handsets are already in the market).

• Marketing/tariffs convergence: one-shop arrangement, combined tariffs with a possible discount, single billing, the sharing of experiences in different markets

• Business convergence: the sharing of the commercial structure

• Commercial convergence: the resources of fixed and mobile departments are grouped and used by both of them

The current deployment is initially based on 3G hand phones with Bluetooth capability. These phones allow users at home or in the office to link to Bluetooth base stations with their fixed broadband connections, and to roam onto mobile networks when outside the Bluetooth access area. With this configuration data speeds up to 700Kbps are possible in the wireless Bluetooth cell and calls could also be priced at normal fixed-line rates. This will be the technology of choice until 3G phones with Wi-Fi capability become available at prices comparable for high-end mobile phones.

Current deployment status

In the UK BT has launched a scheme called BT Fusion [2] which uses Bluetooth technology in order to allow mobile phone users to make or receive calls over the fixed wireline phone network at home or office. Consumers use a cordless handset capable of routing calls and data over BT's fixed line broadband network when they are at home, but switches seamlessly over a Vodafone mobile network when they are out of the home. BT is a solution where a user with a single handset can call over fixed (broadband) or mobile (GSM) networks. In the future BT Fusion is expected to work across other standards as Wi-Fi and SIP. Mobile phone users can use the same phone and number wherever they are, and reduce call charges. The convergence trend is clear, and visible also in the official name of the new network: Broadband Converged Network (BCN).

In Korea [3] the boundary between the highly developed broadband and mobile networks is fading. The broadband connections are becoming mobile with the extensive use of Wi-Fi (e.g., KT’s Nespot) and soon WiBro networks (e.g., KT and Hanaro). At the same time, mobile phones are starting to reach broadband-type speeds, as EV-DO comes available and as WCDMA services are launched. Convergence is high and the new Korean network likely will be one of the first of its kind in the entire world.

The Korean mobile and broadband networks, while both being very advanced, they have evolved separately and are quite different in their infrastructure, network architecture, and business models. Therefore, it should be no surprise that there is no exact picture of what the future network will look like. The Korean model had to be dynamic to reflect the merge of the two very dynamic Korean telecom sectors. The official name of the new network is Broadband Converged Network (BCN).

WiBro or “The portable Internet”

The portable Internet is a technology that is placed between WLAN and IMT-2000 mobile systems in terms of mobility and speed, and has several advantages over WLAN and IMT-


2000 for delivering data. While WLAN are Typically limited to a range of maximum 100 meters, WiBro will be accessible in a 1 km radius around base stations and will be accessible at vehicle speeds near 60 km/h. The Korean government has issued licenses to three different operators (2.3 GHz). The fixed-line operators, like KT and Hanaro, offer services, like KT’s One-Phone, which provides users with a telephone with a unique number that can be used on both fixed and mobile networks, and will automatically route via whichever link is cheapest for a particular call (e.g., jumping onto a fixed-line network via Bluetooth, Wi-Fi, WiBro, WiMAX, 3G or 2G interface).

FMCA Fixed-Mobile Convergence Alliance [4] is an alliance founded by six of the leading telecom operators in the world, and aiming to speed up the advancement of Fixed-Mobile Convergence products and services. The founding members are KT of Korea, BT of Britain, Brazil Telecom of Brazil, Swisscom of Switzerland, NTT Com of Japan, and Rogers Wireless Inc. of Canada.

The alliance will serve approximately 122 million fixed network and 23 million mobile customers. A further 15 carriers from around the world have expressed their interest in joining.

2.2 Drivers for convergence

Drivers towards FMC are diverse and entails almost the entire telecommunication value network and supply chain from content providers to the end user. All segments of the value network are affected in various degrees to support a full-blown FMC network. An FMC network will nevertheless emerge gradually as the technology, business and service parts start to see the value of this development in competition against rivals.

Different actors will see FMC from different points of view. A mobile-only operator or a fixed-only operator may not see the same potential as an integrated operator owning both fixed and mobile infrastructures and perhaps also broadcast networks. The business benefits will mostly come from consolidating the different businesses and avoiding duplicate functions. Nevertheless, the developments particularly on the terminal devices are driving the possibility to use heterogeneous networks. FMC will thus drive the need for more extensive roaming agreements with many actors even within the local environments e.g. with a city area.

However, when evaluating an FMC development it is very important to always have a close eye on regulatory aspects that may alter the business cases for various actors. For big actors, often the incumbent operators, some aspect of FMC may be regulated due to competition twist in favour of the operator owning many access networks and having a highly developed control and service platform. For these operators it may be highly profitable to go for an FMC development due to the large number of networks they may be able to efficiently integrate. The regulator however will aim to stimulate competition and demand open interfaces and full access for other smaller operators or SPs to use the incumbent’s network infrastructure. This may not be disadvantageous, but thorough studies need to be conducted to see all potential implications.

As mentioned, there are many different drivers in the direction towards FMC. These may be grouped into:

• User and service drivers

• Technical drivers (network and terminals)

• Business/commercial drivers


Of course a driver for one area will have an effect on another. For example, the development of terminals towards multi-access functionality will drive the effort from network operator to support vertical handover between these technologies. Hence, the three areas will mutually impact each other to drive all areas forward to a more dynamic, flexible, cost efficient and user-friendly communication network. The main driver and the locomotive for the development is, however, the survival of operators in the intense rivalry among competitors. Network operators, service providers and other market players will always be fighting to obtain market positions and revenue through new and innovative ways of serving the customers’ needs and interests.

The following list of drivers is not meant to be exhaustive. However, the list will contain the most important drivers identified in the market today.

2.2.1 Market drivers

The business aspects are one of the major drivers towards FMC. The market development with increased market competition, increased focus on cost-efficient service and delivery systems, a multitude of new and innovative ways of supporting communication needs to the customers, and constant price pressure on telecom services demand a radical new approach to conduct a business. FMC is also becoming more mature, and major efforts are done to provide operators with faster entrance to markets, new innovative solutions for seamless interworking across access networks, optimal service and control environments, as well as diverse device development and management. From operators´ point of view the focus is on a cost optimal solution to stimulate usage of the underlying networks as well as services created and delivered by company service creators/providers or from 3rd party service creators/providers. For many operators FMC can be seen as a key to differentiation among several operators while offering a complete set of services to the customers.

2.2.1.1 Competition environment

The telecom market is currently experiencing a period of intense competition. A tremendous number of VoIP providers is a classic example. For example, in Norway about 50 companies have marketed VoIP services in addition to globally known VoIP applications like Skype and GoogleTalk. Although incumbents (like Norwegian Telenor) have also entered the VoIP market the small actors constantly increase their market shares and reduce incumbents’ market shares. An actor such as BT with its Fusion service integrating seamless GSM/VoIP services across WLAN is a first step towards a total integration across networks from a single device. A company called Performance Technologies has a similar WLAN/GSM offer. This shows that the market is rapidly heading for a total integration of networks, devices and services. Innovative new ways of offering services to the public will drive the service providers to create new, innovative applications, giving the network providers the possibility to create revenue from service assets (enablers) such as location, presence, context, device management, BSS and OSS support etc.

For service providers the key challenge is to reach a mass market to be able to do business. The separate markets for fixed, cellular and WLAN in isolation may be too narrow to gain the momentum service providers need to be profitable. A service provider needs to be able to create applications that can be delivered to users camping on whatever type of access network, at whatever time of day, and to whatever type of terminal device the user is using (of course some adaptation may be needed). This drives the market actors to produce products, hardware and


software, to always be in the forefront of the development, always keeping up the innovative production, or else they will not survive in the competitive market. New products need to enhance the previous generation, or else they will not take off in the market. FMC products are emerging and the industry is targeting that market. Thus the competitive market is a very important driver towards FMC.

2.2.1.2 Business merging and consolidation

The traditional telecommunication operators have merged into the business of data communication. Software vendors have moved into the telecom and datacom businesses. Internet service providers such as Google, Skype and MSN are expanding their offerings with services belonging to the traditional service portfolio of operators. Typical software providers such as Microsoft and IBM are developing service platforms for telecom operators. The borderlines between various traditional industries are becoming quite blurred. This trend is not directly linked to FMC per se, but it indicates that the industry is heading towards a common mindset of service support. The IP technology and standardised protocols and APIs are developed further and deployed to get every market player to efficiently connect and play together in a healthy, legal and regulated competitive market environment. In short term the following market trends can be seen:

• Mobile operator consolidation:

o Large mobile operators groups get larger by acquisitions and organic growth e.g. Telefonica/O2

• Operator consolidation across fixed and mobile domains

o Large ISPs go into alliances with large mobile operators for offering of fixed-mobile convergent services like VoIP and Instant messaging. E.g. Vodafone – MSN agreement.

• ISP consolidation:

o Large (fixed) ISP’s create communities, e.g. MSN – Yahoo in the U.S. market

• Internet type offerings on mobile:

o Increasing number of access independent service providers attack the mobile space: E.g. MSN and Skype start implementing services and applications to mobile devices.

• Vendor consolidation:

o IT vendors and network equipment vendors do acquisitions and partnering to consolidate own core product offerings in the telco space: E.g. Oracle buys Teleo

2.2.1.3 Cost reduction

From a market perspective the network must be cost optimal with a long term applicability, assured simplicity, support scalability, broad usability and strive towards minimal maintenance and costly service support. This means deploying homogeneous technology (IP), common network functionality security, QoS, address scheme, mobility, as well as common charging and billing systems and OSS. Due to the falling price of services e.g. the voice CAPEX and OPEX for network


implementation and operation needs to be minimized. Common functionality across network borders is one way towards a less costly network infrastructure and operation support system.

2.2.1.4 Efficiency

Efficiency is one of the main attributes for an operator to be able to follow the rapid development and evolution of network and services. The whole value chain must be streamlined to effectively create, update and phase out services and internal processes. Due to the increasing competition from upcoming small niche actors, that are quick to turn their production line to the needs of the market, the incumbent operator also needs to optimize the whole production line to keep track with the others. Efficiency is closely linked to simplicity though an effective production line and business routines does not necessarily need to be simple. The focus of an efficient system is to get the job done quickly.

In the future market with FMC the whole value chain may be streamlined to become more efficient than the myriad of different service platforms and processes found today in both fixed and mobile business. By merging service platforms, creating seamless network services (efficient vertical handovers e.g. with UMA technology) and deploying common technology (e.g. IP) there is a big potential for creating an efficient system. Tailored service platforms for a specific task may however often be more efficient for the tailored job than an integrated platform created to serve many types of services. For operators there will always be a trade-off between supporting tailored systems that are simple and efficient for certain task/services, and going for a common call control and service platform that is more cost optimal and efficient for other.

From a customer’s point of view efficient service support and service provisioning are very important parameters when selecting a preferred service and network provider.

2.2.1.5 Simplicity

In the same way as efficiency, simplicity is very important for an operator for quick service creation, updating and termination. A simple system is easier to maintain and upgrade than a complex system. As described under the section on efficiency there will be a trade-off between efficiency and simplicity. The market demands a system where the operator can manoeuvre quickly into new positions and always be up to date concerning the most optimal technology and processes for telecommunication control and management. This demands a system that is simple so parts of the systems can quickly be updated or replaced.

For the customer simplicity is of vital importance. Hassle free access to services is one of the most important parameters for operator choice. Plug and play software, remote configuration, flexible and optimized device management etc. are very important aspects that always need to be in focus when constructing new services and creation environments. FMC is envisioned to make use of a horizontal service platform that may be used across fixed/mobile operations. This horizontal service platform is regarded much simpler especially in terms of communicating protocols and conversion between multitudes of different run time systems and APIs (see Figure 5).


2.2.1.6 Time to market.

Time to market has also been seen as a very important parameter to stay in business and conduct a cost optimal operation. Entering the market with the right product at the right time is not an easy task, but it is very important to e.g. gain market shares before other competing companies enter the same market. One of the main challenges for operators today is the timing to launch competing technologies to already existing platforms that are profitable. Operators are reluctant to replace service platforms and networks that are profitable. One example is VoIP vs. circuit-switched voice. The trend is towards VoIP but operators have major profit on traditional telephony services. Waiting to launch a VoIP service, which will substitute traditional telephony, will mean that other VoIP companies such as Skype enter the market and take market shares from the incumbent without competition. Hence establishing strategies for FMC development is sensitive for the timing of technology maturity, market competition, users expectations and demands, cost of operations etc.

2.2.2 Service drivers

Services will need to be delivered on a multitude of network platforms and to a variety of devices to reach a sufficient number of potential customers to create revenue for the service developers. A common network transport protocol and enablers in the network and service platforms to dynamically and efficiently create, modify and terminate services is thus needed to support the users´ demands. The demand of this dynamics and flexibility together with reaching the customer wherever and whenever the customer wants to access the services will drive the demand for an efficient and future proof service platform. This service platform must be access network agnostic and adopt the content to the user’s device and be location and context aware (see section 2.3 How convergence manifests itself).

2.2.3 Technology drivers

When discussing technical aspects as drivers towards FMC one must be aware of the linkage between the user related, business related and technical drivers. The technical drivers are most often a result of either business or user drivers, in the sense that the technology development targets diverse transport and device aspects. Thus, technology adapts to create an optimized creation and run time environment including delivery platforms for service support to customers across network boundaries and device types.

These developments result in physical network nodes being able to cope with diverse traffic streams and protocols, optimized horizontal service and control platform for quick service creation and orchestration, easy 3rd party access, and efficient BSS and OSS support.

Technical drivers towards FMC have therefore been diverse and cover many areas of the delivery chain.

2.2.3.1 Terminal development

The current terminal development is one of the most important drivers. Due to more efficient component technology even small handheld devices may now incorporate functionality enabling them to access multiple radio technologies. GSM, UMTS, Wi-Fi,


WiMAX, GPS, and DVB-H are only a subset of the potential access technologies that small handheld devices may support in the near future. Device and network functionality makes it possible to move seamlessly between them without breaking an on-going session. Unlicensed Mobile Access (UMA) is one such technological enabler to support this seamless handover between radio technologies. IMS as a service and control platform is another enabler that supports the session while moving between accesses.

The terminal device also incorporates functionalities that enable different types of applications to run irrespective of the connecting network. The SIP/SDP protocols have become an enabler for cross network session establishment and signalling support. SIP URI –based common addressing space as an identity federation concept incorporating several context specific public identities enables this convergence across networks.

2.2.3.2 Network technology

IP has to be emphasized as the most important driver that makes it possible to run the same services across diverse networks, deploying the same network nodes for diverse network technologies (wireless and wire line), utilising the same type of security, mobility, QoS support etc. Using common technology for mobility, security, and QoS drives an integration development to merge technologies, and enable users to have the experience of always being connected to one network, always being able to receive calls and establish connection to peers or to the Internet.

Applications are also built to run on IP. Supporting an IP pipe to the terminal the future may show that all types of services, including voice, data, and multimedia, may be run across it irrespective of the underlying network. Of course, the networks will be different with different characteristics regarding e.g. bandwidth, QoS support, and mobility support, which will demand access awareness to the service providers and/or network providers to adapt the content to the connection used. This is thus a network feature that is automatic from a user perspective, even if the user may notice the adaptation e.g. in terms of eliminating the video in a multimedia session due to insufficient bandwidth of the current network.

2.2.3.3 Service/control platforms

The service platform is the integration environment for call control and service convergence. The same call control platform, e.g. IMS from 3GPP, is used for heterogeneous access networks due to the philosophy of an access agnostic development. It will also be used for circuit-switched networks since the IMS supports protocol conversion in the IBCF/TrGw. This development gives operators the incentive to deploy the same service platform for fixed and mobile services.

Also the shift from a vertical service development structure towards a horizontal layered service development environment drives the trends towards a network agnostic service environment based on standardised interface protocols such as web service or Parlay X, run time environment based on e.g. JAVA, and SIP/SDP for signalling. The BSS/OSS systems and 3rd party interfaces are also vital components of FMC and the trend is pointing in the direction of a common BSS/OSS system, and a common 3rd party interface based on e.g. web services, an environment handling service enablers as component building blocks for local and remote application developers. The development within the service and control systems to streamline


towards common functionality and easy interfacing towards 3rd party application servers is looked upon as one of the most vital aspects for business success in the future and is at the same time a major driver towards FMC.

2.2.4 User related and social drivers

2.2.4.1 Social behaviour

The role of the user will significantly affect the business for network operators, service providers, terminal vendors, content providers etc. This is due to the fact that the users (both end users and enterprises) are the ones that actually pay for the content being transported and delivered on a device. The ways the users desire to access a service in the future will therefore be a significant driver for the way the network, terminal and service development will evolve. The user is thus dependent on the functionality of the terminal device.

2.2.4.2 Communication needs

The following points will drive the development towards a convergence of the fixed and mobile marked.

Increased mobility – always best connected

People will continue to increase their mobility and require to stay connected and have access to various medias such as voice (ordinary telephony), messaging services, e-mail, web applications, and events (sports, stocks, news etc). The network and/or service platform should figure out where the user is and what kind of device the user is using to be able to support the user with the best network to support the user’s service requirements. At home the fixed access network (possibly extended with Wi-Fi) may be used. While moving a cellular based network is the most optimal and may be used. Transition between the networks shall be seamless to the user. Seamless roaming between different networks and operators is also included in this enhanced mobility experience from a users point of view.

Same bill, same device and same number/address

People will have the possibility to acquire one bill irrespective of the access network used since the user will not bother about the networks used. Some adoption in the service to fit the type of network used in different environments will however be accepted and understood by the user. A common billing or easy-to-understand billing regime when moving between networks and operators needs to be in place.

The same goes for the device. The same device should be possible to use at home, at work and while moving around. One of the main issues mentioned by user for this is the address book/contact list. Easy access to contacts and addresses is a major driver since person-to-person communication is, and will be, a large part of the user’s communication need.

Thirdly, peers should only need to store one number to each other. People may however still acquire different numbers due to context as private and business


number. Even if a user only has one number, the context (e.g. public user identity) may be different and the user may acquire separate bills based on public user identity and not number as today.

Access to same services

The users will be able to access the same set of services regardless of network connection. Similarly to the first bullet, with increased mobility the network in use and the grade of mobility will affect the services, possibly demanding adaptation of content to network and device.

The security has been different between access networks. By utilising a common security scheme the user is confident that good security is ensured across networks. The EAP-SIM or EAP-AKA has emerged as a common security/authentication method and will probably be implemented across network accesses, supporting the security concerns of the public. The SIM card as security and authentication identification is widely used and will probably drive the market towards a common security regime.

2.3 How convergence manifests itself

2.3.1 Technology

Convergence at the network and terminal levels are primary pre-requisites for the end-to-end provisioning of convergent services. Currently, standards development organizations and industry bodies are working on the architectures to be adopted for FMC. Figure 1 provides the technological overview of convergence.

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Figure 1. Technological realization of convergence


Convergence can occur at different levels. An end-to-end IP-based transport enables the provisioning of services over multiple access networks. Some of these multiple access technologies are:

• Mobile: GSM, CDMAone, GPRS, EDGE, WCDMA, HSPA, MIMO, 802.16e

• Fixed: PSTN, ISDN, xDSL, Optical fibre, Coaxial cable

• Fixed wireless: WLAN, WiMAX, Bluetooth, Infrared, LMDS

• Terrestrial broadcasting: DVB-T, DVB-H, DMB

• Satellite: SDMB

These access technologies are based on either packet or circuit-switching. In the short to medium term, packet and circuit-switching will co-exist for a while before the complete migration to IP-based networks. A brief discussion about the different technologies is given in the following sections.

Fixed wireline

Fixed wireline has evolved from the traditional PSTN. Digitalization not only transformed the core network into the cell-switched ATM network, but also brought newer last-mile technologies. ISDN, for example, enabled new digital services with a narrowband connection. Broadband services came with DSL and digital cable.

ADSL uses the same twisted pair copper wire as PSTN to offer higher bandwidths and it’s latest evolution, ADSL2+, can offer up to 20 Mbps downstream and up to 1 Mbps upstream. However, availability and maximum bit rates depend on wire’s conditions and length.

Cable operators experimented digitalization, to evolve from a broadcast-oriented platform to a bidirectional high speed access network (HFC), making them an important competitor to DSL. Different architectures are available, depending on how close to the subscriber does the fibre get. However, there is still the problem of the expense of cabling, costlier as the fibre gets closer to the home, maximized in scarce populated areas.

Fixed Wireless

Technologies such as LMDS and satellite digital links appeared to the market already years ago. Using digital radio interfaces in licensed spectrum bands, LMDS enabled connectivity with fixed equipment and antennae, with a link requiring line of sight. But expensive components, low production volumes and LOS requirements turned it unsuccessful. More recently, WiMAX is expected to be the reference for fixed wireless access, making infrastructures cheaper, offering better performance in bandwidth and coverage, and working both with licensed or unlicensed spectrum.

Broadcast wireless

Broadcast wireless technologies have been also developing. In countries around EU, TV broadcasting network infrastructures provide coverage for almost all the territories, and have therefore been considered to be useful also in data communications. The DVB project has defined digital broadcast standards for both


satellite (DVB-S) and terrestrial (DVB-T) systems. Both offer high-speed digital data streams, which can be used not only for digital TV distribution, but also for broadcasting any digital media.

Nomadic Wireless

In a local environment, where wireless interconnection between different devices is required, Bluetooth has emerged as a global standard. Although it does not provide very high throughputs (less than 1 Mbps), the low price and integration in one small integrated circuit have made Bluetooth available in many devices. The standard uses unlicensed spectrum and enhanced encryption for securing communications. Operating link distance ranges vary up to 10 or 100m depending on devices. Devices must be paired in order to establish communication, which protects privacy, but limits services to a reduced list of devices.

For faster wireless network access for computers, PDAs and peripherals, a group of standards more commonly known by their trade name Wi-Fi has been standardized by IEEE, operating also in unlicensed band. In the current versions of the standards (802.11a and 802.11g) the theoretical bandwidth has increased to up to 54 Mbps. Also security, which was initially poorly defined, has been improved with new amendment called WPA. A possible problem is that there are only 3 different operating frequencies available, causing interference between systems in densely networked areas.

Wi-Fi hotspots have been set up in airports, hotels, cafés, etc. to provide coverage in areas where there are many possible users. Nowadays, almost all notebooks, many PDAs, and some new mobile phones and devices such as gaming or digital cameras support Wi-Fi connectivity.

These technologies are classified as nomadic, since although wireless, they do not permit easy handover between cells, nor vehicle-speed mobility. They can be the choice for mobile devices to access the fixed networks both in home or office, in a convergent scenario. In the near future, faster alternatives to Bluetooth are considered, such as Ultra Wide Band (UWB). Since its bandwidth increases with proximity (up to hundreds of Mbps), this technology emerges in association with mesh networking. In wireless mesh networks any device in the network acts not only as a terminal, but also as a network node. This permits not only faster speeds due to shorter links, but also spreading coverage with little fixed infrastructure.

Also in the Wi-Fi evolution plans we can find enhanced bandwidth (to more than 1/2Gbps), seamless handover between cells, and mesh networking.

Mobile

Full mobility is currently possible with GSM circuit-switched networks. The service penetration in Europe is almost at saturation point in many countries in Europe. For packet-switched services, the networks have evolved to support GPRS. The terminals are gradually being substituted, although users don’t really perceive the change. The recently deployed UMTS networks offer near-broadband speeds, and coverage has been deployed in most densely populated areas. These solutions do offer the mobility desired, and enough bandwidth for many services. New services such as videocalls are also possible. These networks have been designed to utilize licensed spectrum, which permits QoS granting. However, costs are substantially higher in comparison to those of wireless-nomadic fixed line.


For broadcasting video and other data services, UMTS network is inefficient, since packets should be replicated for every user in the radio interface. Hence, traffic load in the cell will increase to a large extent since video content is heavy in terms of bandwidth. To solve this problem, DVB-T infrastructure can be utilized with the recently released DVB-H standard. This is a revision of the DVB-T standard adapted for mobile reception. Video resolution and modulation specifications have been updated in order to reduce power consumption and CPU speed requirements. In this way, nation-wide high download-speed coverage can be achieved for broadcasting multimedia heavy contents.

The WiMAX fixed wireless access networks are also evolving towards mobile applications with the advent of the 802.16e standard, which should give communication capabilities to mobile and portable devices, allowing also handovers between adjacent cells. The standard is expected to be finished in the next years, while the fixed version of the standard is already about to appear in markets.

In the following sections, network and terminal convergence is considered in detail.

2.3.1.1 Network

For understanding the manifestation of convergence, the networks can be divided into three: 1) access, 2) transmission, and 3) core. Convergence will enable multiple access and core technologies to interwork using IP-based technologies as illustrated in Figure 1. One such architecture is 3GPP’s Generic Access Network (GAN) [17] (see Figure 2) that enables both circuit and packet-switched access technologies, in the licensed and unlicensed band to co-exist.

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Figure 2. Generic Access Network Architecture [3GPP TS 43.318]

In this architecture, the GAN controller enables seamless interworking between the CS and PS core domains across multiple wireless and mobile access networks. Elements providing certain control plane functionalities such as location, cell broadcasting and security are common to both the domains. In other words, there is a separation of the data and the control plane which is a significant development for enabling convergence. Multiple data planes can be controlled by a single call control


and signalling plane at the core. Having a common control for multiple access networks will enable operators to reduce operating cost as well as maintain greater control over the networks. The situation is different for incumbent and new entrants. An incumbent, with its legacy systems, will have to integrate multiple types of access and core networks whereas a new entrant can start with minimum integration.

The “softswitch” approach is currently favoured by different network vendors such as Nokia, Alcatel and Samsung to achieve the benefits of convergence. In this approach the traditional switching centre is split into: 1) switching server that takes care of call and session control and signalling and 2) media gateway that carries the traffic from different access networks. An illustration of this approach is presented in Figure 3.

IMS

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Figure 3. Separation of control and data planes

Operators can adopt a distributed or centralized architecture for the media gateways. In a distributed approach, the media gateways are kept closer to the access network nodes thus reducing the transmission costs. The sites used for access controllers can host the media gateways.

As mentioned before, IP-based transport plays a major role in implementing convergence scenarios. The standardization organizations as well as industry bodies in both fixed and mobile domains have broadly accepted 3GPP IMS [13] as the common control and service architecture for achieving a unified core. However, the unification of mobile and fixed core in itself would require harmonization among different architectures proposed by 3GPP (IP multimedia subsystem (IMS)), 3GPP2 (Multimedia domain (MMD)) and ETSI TISPAN (Next generation networks (NGN)). The current developments seem to show that the mobile networks will adopt IMS in


its entirety whereas the fixed networks will be based on 3GPP/TISPAN’s IMS over Fixed Access (IMSoFA) [20] architecture which is an adaptation of IMS. Harmonization work is also ongoing between 3GPP’s IMS and 3GPP2’s MMD.

At the transmission layer, migration from the existing technologies such as Frame Relay and ATM to an IP-based backbone is foreseen. Since most of the millions of devices attached to the unified core will be IP-based in future, the existing IPv4-based addressing scheme will not be adequate. Hence, a migration from IPv4 to IPv6 will gradually take place. 3GPP has already adopted IPv6 as a mandatory requirement for IMS.

The two key service features for end-user’s experience from convergence are the seamlessness and continuity of services. Service continuity would require establishing roaming capabilities across multiple access and core domains. These roaming capabilities include the implementation of handover mechanisms for call and session control and signalling as well as for data transport. Voice call continuity [21] is once such effort to maintain the continuity of voice calls across CS domain and PS-based IMS domain. Seamless service experience requires the ability to provide an uninterrupted call or session while traversing multiple access and core with minimum loss. Quality of Service (QoS) issues have to be taken care of to achieve this. Since different access networks have adopted QoS in different ways, a mapping of these QoS schemes is a must for providing seamless service. Work is in progress to harmonize the four QoS classes adopted by 3GPP’s IMS with that of six classes adopted by ITU-T’s Y.1541 for fixed networks.

In the core network, where fast switching is the key, MPLS is a good partner for IP. The switching inside the backbone is done by looking at the IP header and the routing tables only in the edge routers. The routers then identify each possible route and add labels to the packets with the ID of the route that the packet should follow. Therefore, switching is done using lightweight labels between edges.

Accepting IP as the network layer protocol brings an important issue with mobility, as the terminals should be able to use fixed IP addresses. Thus, handovers between cells need fast routing table updates to route the IP packets to the new network location of the terminal, without packet-loss and shortening delays. There are several options for enabling this, such as Mobile IP or the faster Cellular IP. Bicasting in adjacent cells enhances seamless handover performance, since packets are replicated and can be received in both cells, avoiding any packet loss and reducing the delay. This is especially interesting in handovers between cells of different networks (e.g. fixed wireless and mobile), where mobility management updates require more time.

2.3.1.2 Terminal

Terminals also find new requirements to meet convergence. First, they must be multimode, having multiple radio interfaces, to roam between different technology wireless networks. Furthermore, the seamless handover requirement means that terminals must be able to work simultaneously with the different radio interfaces. Another key feature is processor speed. New services require better CPU performance, but it must be integrated in a small size IC. Also power consumption caring is essential. Some radio interface solutions, such as Wi-Fi, often consume quite a lot of power, so then autonomy would be reduced. In addition, faster CPUs often require more power supply.


Figure 4 illustrates some of the capabilities and protocols to be supported by a convergent terminal.

GSM,UMTS-CS,

Bluetooth-CS

MExE

SIP, SSL

TCP/UDP

IPv4/v6, VPN

GPRS, EDGE, UMTS-PSBluetooth-PS, 802.11x, DVB-H

Figure 4. Convergent terminal stack

As mentioned before and as the figure shows, convergent terminals of the future will require higher processing power, better mobility management, storage and security. Chipset vendors are working on including multiple system functionalities on a single chip (SoC) to improve the performance and reduce the size of the terminal. The industry bodies such as the FMCA are working on product definitions of convergent terminals. These terminals include Bluetooth CTP (Cordless Telephony Profile), Wi-Fi GAN (UMA), and Wi-Fi SIP, which support fixed wireless and mobile access networks.

2.3.2 Services

From a service development and control point of view the trend towards FMC has resulted in major work effort to consolidate the service platforms and service delivery platforms for the operators operating both fixed and mobile infrastructure. The legacy systems from PSTN and CS domains on GSM and UMTS are different than the emerging ones, which are based on IP e.g. IMS. The legacy systems work and are in operation and will be for many years still. These, however, demand service support from the suppliers, service and maintenance from the operator’s staff, and constantly new patches to integrate them with other new systems to support the internal IS/IT systems. The situation for the incumbents is quite similar, comprising of a vertical oriented service platform structure where each service has its own runtime system, enablers, and interfaces/protocols. Many service enablers may be duplicated.

2.3.2.1 Convergent Services

Today, traditional voice is fast becoming a commodity service. Both fixed and mobile operators are hence looking at new and advanced applications and services for revenue growth. Convergent services are hoped to enable revenue growth as well as customer satisfaction in the coming years. This section looks at some of these services in detail.


Currently the telecom market is divided between fixed and mobile telecom operators. Not only the networks but also the services are divided into two different markets. Fixed-mobile convergence is clearly on the roadmap of operators that want to create additional revenue streams from new value-added services using a combination of fixed broadband and local access wireless technologies.

Fixed Line - Phone

Broadband Services

Wireless LAN

Portable Internet

Wireless Internet

Mobile Phone

Fixe

d lin

e

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Integrated terminalsIntegrated billing

Access to same content

Figure 5. Converged services integration

A possible target network architecture is 3rd Generation Partnership Project (3GPP) compliant, offering a common applications and control layer for both fixed and mobile carriers. It will therefore provide applications and services for the fixed and mobile SIP (Session Initiation Protocol) multimedia users and will also interwork with existing circuit-switched users. In the next years, prototype services are expected to emerge for both enterprise and home users in the developed markets of Europe, Asia and North America. Also, the launch of bundled services and VoIP over wireless local area network (WLAN), as well as industry consolidation and integration of networks and platforms around Internet Protocol (IP) is expected.


Y-A

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Multimedia Fast BroadbandMultimedia

Voice Oriented

Intelligent

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Person to machines

Convergence Enviroment

General Service Personalized(Passsive)

Personalized (Active) Intelligent

SMS

LBSVideo Streaming

Mobile TVDAB/DVB

Remote Treatment

Video - ConferenceHigh Capacity Telematics

Figure 6. Evolution of convergent services

The end –user services will probably evolve in three stages [5][6][7]:

• Value added services: is based on the existing networks and will provide integrated/unified messaging. The user is able to access e.g. a unified mailbox from different heterogeneous networks using different terminals to send – receive various types of messages (e.g. voice messages, SMS, MMS, data, fax, email).

• Convergent terminals: one single terminal that is able to connect at both fixed and mobile networks. Users can use the extended mobility services having access to local services with indoor quality. Also, the users may choose to have only one number, via which they can be reached in predefined fixed and mobile destinations by any calling party. In addition, the subscriber will receive a single bill including all the costs associated with his activity (mobile or fixed).

• Convergent networks: the two networks will physically integrate. It will be possible to access the same content regardless of telecom operator or network anytime and anyplace.

2.3.2.2 IP service platform

The challenge for integrated operators is to calculate when they shall merge the legacy systems to a new, innovative and hopefully more future-oriented service delivery platform, what systems shall be merged into this new system, and what systems would be most optimal to leave as is. Timing is again one of the major


headaches. Integrating service platforms into a common service platform has its risks and benefits.

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Figure 7. Migration from vertical to horizontal layered structure with IP service platform

However, FMC so far has manifested itself by an ongoing process in very many companies to go for a horizontal layered service platform structure for service creation and delivery. This horizontal layered approach is seen as the most future oriented approach enveloping the way applications are created, paid for, routed and addressed to the recipient. Many platforms emerging already for specific services (e.g. VoIP) may be included into a common horizontal layered environment that makes it much easier to bundle VoIP sessions with other services creating a flexible environment for innovative new services.

SP interface

There will be many SPs acquiring access to the operators’ service platforms and networks. These could be internal SPs i.e. the operators own SP units, or 3’rd party SPs. Since these two groups of SPs may be looked upon as trusted and non-trusted they may access the operators domain differently.

The interface towards 3rd party service providers is however one of the most important aspects for operators since the operators may support very many assets to the service providers. The SP may use these, pay for the access, and create new and innovative applications. Many SPs have such assets (service enablers) themselves, including e.g. customer databases for certain services/content that the operators internal SP may access. Thus, there is a mutual trading of assets from each other to best provide for the customer.


3 ’rd p a r ty S P

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e .g P a rle y X

S e rv ic e a s se ts /s e rv ic e s e n a b le rs

C a ll c o n tro l V N O

Figure 8. SP interfaces to the service platform

Since different types of service providers and MVNOs will have different business models they may interface the network providers service platform on different levels. If an MVNO owning a service platform needs access to network access resources, an interface directly to the call control platform may be needed.

Service enabler architecture

There are a number of enablers that have to be in place for a modern FMC concept. The enablers are needed to support the applications that are to be delivered to the customers. An application may use one or more enablers to enhance the application experience to the customer to be e.g. location dependent, and or to support the transport regarding e.g. QoS requirements, charging profile etc. Figure 9 depicts a high level view of a layered model for service support.

The applications that are created should, if seen beneficial for the business, be able to be linked towards a common enabler framework on top of a common call control platform, i.e. a horizontally layered structure. The goal of this kind of horizontal model is to be able to offer a common interface upwards towards the application layer and a common interface downwards towards the call control and BSS systems. The service enablers would be a horizontal layer in-between that may be used by all applications.

The layers

On the top level we find the applications. These may be supported/created by the operator itself or be linked towards 3rd party service providers. Through one or several APIs based on e.g. Parlay X the applications are linked to service enablers. These may include information about the customer profiles, current location of the user, presence information of the users, service monitoring etc. The operator or possibly other parties that have been able to link their databases onto a common framework for service creation/support and delivery may support these enablers.


Technically, these enablers are located in several distinct servers running on server platforms and with a cross communication based on e.g. JAVA, SOAP, Parlay X or other protocols.

The applications use the enablers to be linked into the call control and be able to communicate across the transport network. The call control layer use the enablers to set up the correct transport bearers, the correct QoS, and charging regime for the application, and supports the policy handling.

The transport part is also depicted into the figure. The transport may be comprised of several types of access and transport networks e.g. mobile (2G/3G), WLAN, broadcast networks, fixed (xDSL) etc.

E-mail MessagingE-mpush2seeailPoc

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Figure 9. Horizontally layered service support framework

Service enablers

As Figure 9 shows, there are potentially very many service enabler types. These may often be grouped into categories. One such categorisation may be:

• BSS supported enablers (e.g. billing, interaction to customer data, tariffing, 3rd party payments)

• OSS enablers (e.g. monitoring)

• Call control/transport supported enablers (e.g. QoS, Policy)

• Service management enablers

• Customer management enablers (e.g. profile handling, service handling, GUP)

• Service creation/modification enablers

• Service presentation enablers (e.g. portals, context, adaptation to terminal, network)


These enablers may be run on different run time systems (JAVA, SOAP, Parlay, J2EE etc.) and must be integrated into a common architecture to be able to support the vision of FMC. Today, fixed and mobile networks have very many separate service enablers. The management and support of services on a fixed access network are very often not the same as those needed on a mobile network. Much of this difference is related to the way services are delivered across the two network types, with or without QoS policy, different charging schemes, different addressing methods, etc. With FMC we may see very many of these enablers merging together supporting applications on both network types. For example, we may see the use of same BSS system, the same addressing and routing scheme, the same type of QoS/policy across multiple access networks etc.

There are several open questions regarding the BSS, OSS, the call control platform, the 3rd party and internal AS interfaces. Location servers, presence servers, and HSS may also be used regardless of whether a user is a mobile or a fixed subscriber and will be updated as the user moves between networks.

Service creation

The service assets such as location, presence, user profiles, device management, personalization information, charging, billing, resource management, network connectivity support (GSM, Fixed, WLAN) etc. may be offered by the operator on a per SP basis. The SP may then streamline its applications based on its own application ideas to the preferred targeted market. The assets are constructed in a way that supports the information requirements of different networks. For example, the same location asset may be used to track a user and contains the location information of this user. The location information may however be a cell ID if the user is connected to a GSM network or an IP address of a modem or residential gateway if the user is stationary. For the SP it is important that the application may be accessed wherever the user is and by whatever terminal he/she is using. Adaptation linked to the current access network and terminal device will be an inbuilt asset as well.

Call session control

In an FMC context the call control platform will be access network agnostic. IMS specified by 3GPP is specified as to be applicable for 3GPP mobile networks (GSM/UMTS) as well as WLANs (3GPP-I-WLAN interworking) and fixed broadband integration. These are all finalized or ongoing work items in 3GPP to harmonise IMS as a common call control platform. IMS uses SIP as call control protocol, but even if the common service platform does not use SIP, standardized APIs are used to convert i.e. between OSA/Parlay and SIP. The call control layer will then act as a common layer interacting with different application servers, both IMS specific AP server (incorporating the SCIM layer) and other 3rd party application layers. This development is again directly related to FMC in the sense that IMS is seen as the future call control platform for heterogeneous access networks and supporting the interaction with application server to support the sessions initiated.


Service delivery

There will be several types of access networks that a user may use. These will all have their own characteristics. The service platform together with the call control platform must be able to adapt the application to the network in use. This demands a configuration of QoS level, bandwidth allocation, radio bearer selection, security level, routing procedure etc.

2.3.2.3 Terminals and Software

As described earlier, the terminals have been developed to incorporate multiple radio technologies and mechanisms to seamlessly hand over a connection between radio technologies. This means that a user may receive services across multiple networks and always be best connected in relation to his/her user profile and optimized in terms of network resource usage. A lot of the upcoming terminals also include Wi-Fi technology in addition to cellular technologies. Since the fixed access is often extended with Wi-Fi a service is seamlessly switched between mobile and fixed networks creating a real FMC service. Additional functionality in the terminal device such as SIP addressing, multi-homing, web browsers, and Java run time system make the terminal device a very powerful equipment in terms of service creation and handling.

In terms of service usage it is increasingly more important to take into account the types of terminals used. The number of different types of terminal devices increase and they are equipped with increasingly more functionality needed to run services locally and/or remotely (web services), increasing the possibility to create new services. It is predicted that terminal devices will be integrated with other types of equipments enabling them to be a relay toward the public network from locally stored devices as PCs, TV sets, etc. The terminal development is evolving in the direction of a mini PC with internet connection and web browsing capabilities including voice capabilities.

2.3.3 Industries and competition

Technological convergence can be seen as the first step and prerequisite for other types of converge developments, one of the most apparent of which is industrial convergence, i.e. the blurring of boundaries between the traditionally separated telecommunications, IT, and media industries. Depending on the source, also the computer and consumer electronics industries can be seen as components of the industrial convergence.

Since the late 1970’s, convergence has been often illustrated by drawing three or four initially separated industries moving closer to each other, first overlapping and finally creating a single “converged industry”. For a more detailed description of the history of the usage of convergence terminology, see [19].


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Figure 10. Popular illustration of industrial convergence

The vision of a single, converged industry has not, however, materialized. On the contrary, the convergence development is now often seen to fragment the existing industry structures and give rise to totally new ones.

Technological convergence often lowers the barriers for new players (i.e. totally new companies or established companies from another industry) to enter the markets, thus challenging the incumbents and intensifying the competition in the industry. Examples of these kind of competitive moves often labelled as convergence developments include e.g.:

Skype, Microsoft, Google, Yahoo: a global Instant Messaging / VoIP provider challenging traditional fixed-line telephone operators, and in the future also mobile operators

VoIP over WLAN/Bluetooth: a way for broadband access operators to take a share of mobile-originated voice revenues, e.g. BT Bluephone, 3GPP UMA

MVNOs: Media companies, cable-tv operators or fixed-line operators have the possibility to enter the mobile markets as MVNOs, creating bundles of e.g. mobile + high-value content or mobile + broadband + television subscriptions

Mobile broadcasting / mobile television: Media and broadcasting companies have a possibility to deliver video services to mobile handsets by utilizing DVB-H or similar broadcasting technologies, effectively bypassing the mobile network operators

As the examples show, convergence is often a synonym for lower barriers of entrance for new players to traditionally closed markets, and substitution of old technologies and systems with new alternatives.

2.3.4 User behaviour

For the end-user, convergence is promised to ultimately bring the vision of ubiquitous services, i.e. access to the same communication services and same content in all places, at all times, utilizing most suitable access networks and terminals. So, instead of being forced to watch videos only via television, read e-mails only via PC, and make voice calls only via mobile phone, the end-user has the possibility to use access all these services via all the devices and networks (e.g. read e-mails via television, watch videos via mobile phone, and make voice calls via PC etc.)

Although convergence manifests itself as a plethora of different and complex technologies, the aim should be to make everything as easy as possible for the end user. Many of the convergence scenarios will fail if they degrade the service quality too much or make the underlying complexity visible to the end-users. For example the perceived value of the


voice-over-WLAN services depends on whether or not the user has to make manual selections between the access networks (GSM/3G and WLAN), and whether or not the networks support seamless handover between the two networks. However, even if the quality or ease-of-use is would not be on the same level as in traditional services, lower prices may still steer the choice of the users towards the emerging alternatives.

2.4 Consequences of convergence

2.4.1 Regulatory issues

Specific regulation for FMC operators has not yet been stated by the ERG nor by the NRAs across Europe. Even in other countries where FMC operators have been established, regulators have not taken clear stands about it. ERG is considering FMC to enter its agenda in 2006.

There are several regulatory issues in the EU that affect and limit convergence. On the one hand, from the point of view of operators in both mobile and fixed markets, in many countries they have been prohibited to share information between them, are forced to have separated accounts, and even bundled services offered by the detached companies are forbidden. This issue gives no option to convergence.

On the other hand, companies which are fixed-only or mobile-only often don’t have chance to get a license for operating in the other market segment. Regulation of MVNOs (which is often the main problem since there are scarce spectrum licenses) is being considered at the present, and changes may arise in the near future. As an example, in Denmark, incumbents have been forced to open their networks’ access to MVNOs, while in the UK operators have reached agreements and no explicit regulation has been included.

Also VoIP specific regulation affects FMC. Voice telephony service must deal e.g. with the following issues:

• Since with VoIP the country location of both the user and operator may be different, homogeneous international regulation is needed.

• Numbering could be geographical or personal (nomadic). This offers different alternatives in numbering ranges (old-PSTN or new VoIP-specific ranges). Also number portability must be granted.

• The service must be independent of the subscriber’s power supply. PSTN lines carry power supply enough for old and simple analogue phones. But with convergence and VoIP, a router and a VoIP terminal are needed, which have higher power requirements.

• Emergency calls require the service to provide geographic location of the caller.

• Communications must be secured, so they cannot be illegally intercepted. However, lawful call interception must also be enabled.

• A certain QoS must be guaranteed.

VoIP also changes the way interconnection is made. Present time charging interconnection could turn into traffic volume charging. Anyway, cost-oriented tariffs are required to assure competition.

A public ERG consultation on VoIP stated that VoIP should not be object of any specific regulation, letting market rules act for this.


2.4.2 Service substitution

Services offered by FMC operators may differ from those offered by current networks. Voice calls, which represent the most important revenues at this moment, will suffer a deep transformation from the effective circuit-switching model to a VoIP packet switched implementation. The user should not notice any change in the way he experiences the service but a remarkable reduction in tariffs, as this evolution will permit lower switching costs.

Together with this cost reduction, many voice calls might return to the fixed networks. Fixed lines have experienced cannibalization from the mobile market. Recent studies show that calls made from home are now often made from mobile, and constitute 60% of the calls made using a cellular phone. But with convergence, these calls can be routed through fixed lines, if made from the convergence-ready cellular phone. This could be done not only with user home Wi-Fi, but also e.g. in his parents’, friend’s, or even your neighbours’ wireless-enabled fixed line.

SMS and MMS services could be substituted by e-mail since it improves message length and file attaching. Although, it is not so clear that operators will likely allow this substitution since SMS is the most profitable service in GSM. Anyway, a unified inbox for e.g. SMS/MMS, e-mail, fax, voice messages would improve usage and service convergence.

Video-calls, which can be offered via 3G or broadband non-converged networks, could also somehow substitute partially the regular voice telephony service.

2.4.3 Market situation

FMC will drive both fixed and mobile operators into a new environment. The need to offer converged services, in order to be more competitive in the communication market, will force operators to new strategies depending on their present position in the market.

Fixed-only operators will need to offer mobility. One option is to become a new MVNO, using an existing MO’s network. This could be reached by means of an agreement with the MO (probably a mobile-only operator), where both parts would get profit through a better market positioning (in both customer and business customers) and revenue sharing.

As an example of this, BT (fixed-only company that sold off its mobile business in 2001) has reached an agreement with Vodafone to become an MVNO by using Vodafone’s 3G network. This may seem surprising, as BT Retail had existing wholesale agreements with T-Mobile and O2. BT’s motivation is clear: falling fixed revenues and substitution by mobile calls need intelligent positioning. A convergent solution may return voice minutes to the fixed networks, as well as providing new services to the user.

But what does Vodafone get out of the deal? Calls utilizing BT Fusion will reduce mobile traffic, and the FMC service may thus cannibalise mobile revenues (but for all mobile operators). However, there is a new market opportunity and the chance to be more competitive in the enterprise space. BT's present mobile customers will be migrated over to Vodafone from O2 and T-Mobile once their contract with BT ends. Vodafone also realises that mobile-only services will not serve future customers' needs, and definitely not in the business market where there will be great demand for FMC solutions.

At the same time, BT is a strong MVNO partner. It has a strong brand, a large existing customer base, good distribution channels and is a good option for new technologies and skills.


Mobile-only operators are likely to lose competitiveness unless they find a way to offer low cost calls when the user is at home or at the office. In this case, new scenarios can be considered, apart from the mentioned alliance with a fixed-only operator. Lower cost, local or nomadic access could be offered through Wi-Fi hotspots or, in the near future, WiMAX.

Operators involved in both fixed and mobile markets have an easier pathway to convergence, although many bureaucracy problems may arise. In many cases, these operators do offer one only bill for mobile, fixed and broadband services in spite of the fact that they are actually not converged.

As an example of this, Deutsche Telekom is bringing new convergent services to markets in 2Q/2006, with a new Wi-Fi/3G enabled terminal. In Japan, NTT-Docomo is offering passage duple, a FOMA(3G)/Wi-Fi convergent service with various terminals available. Swisscom reaches data-only convergence through a GPRS/UMTS/Wi-Fi compatible PC card (90% of the population is covered by UMTS, and 1000 hotspots are available). Also in Korea, Korea Telecom has a convergent service called One Phone. Furthermore, Sprint is starting converged services in USA by offering local mobile coverage to university campus.

A real competitor for both mobile and fixed operators (converged or not) are VoIP peer-to-peer services, such as Skype or GoogleTalk. At the present, they offer free communications between PC/PDA terminals, and users are only charged for the IP traffic by their NO. For PC-to-phone calls, very low rate fares (up to 1.7c/min) are available since the most part of the traffic switching and routing happens inside the IP network. In a market where data traffic (in not very excessive volumes) has flat pricing, this software leads voice traffic out of the control (and charging) of the NO. This situation takes place in most broadband accesses and could occur also in mobile environments, where flat pricing is appearing with UMTS.

In order to avoid these threats, some operators are planning to filter VoIP traffic over their networks. Vodafone announced this restriction in their German network beginning in July 2007. In China, only China Telecom and China Netcom are allowed to make trials of VoIP services. Skype traffic is being blocked and even prosecuted since laws are very restrictive with the Internet access and it’s contents.

At the present, some convergence can be achieved at the service level by creating different interfaces, depending on the access network, for a same service. This can be seen in many applications which have both Web/WAP versions, such as banking, reservations, etc.

With FMC, service providers will have a new platform to develop converged services. If the FMC network offers the Parlay/OSA unified interface, services could be developed to work independent from whether the user is accessing them through his home fixed network or while on the move. This allows not only easier development for converged applications, but also an easy interface for billing that permits fast tariff model changing.

2.4.3.1 Market Dynamics

The impacts of FMC to the telecom markets can be severe owing to the consequent change on market dynamics it implies.

Convergence in user equipment requires CPE vendors to achieve integration of technologies that have been considered separately until now. Deep competence is required in customer equipment in a user-centred market, providing cheaper, more versatile, more customizable, easier-to-use handsets and devices to access whatever service provided.

Convergence in transport network eliminates the traditional separation between fixed and mobile networks, which in turn may cause fixed and mobile operators to


form alliances (e.g. BT and Vodafone alliance in UK to provide BT Fusion) or even fusions (e.g. Telecom Italia and TIM integration in Italy to become an integrated service operator). Traditional PSTN switching networks will be substituted by all-IP transport networks, unifying the way information is switched and transmitted all over the world. It will not make sense to separate between data (packet-switched) network operators and PSTN.

On the contrary, access network operator and core network operator roles would be clearly different.

• Access network operator will be concerned with reaching the maximum number of customers using whatever mix of technologies possible. They will deal with the mobility vs. QoS limitations, and only value perceived by customers (frequently depending on the service used) will determine which solution is most accepted. MNO provides mobility as its core value (GPRS, EDGE, UMTS), at the cost of a limited QoS comparing to fixed network accesses, while Wi-Fi/WiMAX technologies offer wireless and limited mobility with a higher bandwidth, especially when hotspots attend few customers. On the other hand, fixed access technologies such as ADSL or FTTx are able to provide the highest QoS at a cost of no mobility, or wireless home mobility using Bluetooth or Wi-Fi.

Figure 11. Technologies and value in the access network

• Core network operator will be focused in providing worldwide connectivity. Its fundamental value is the number of access networks and users the operator directly connects to, for it will determine the amount of traffic that flows by its network. An Internet based, tiered interconnection model is supposed to substitute traditional telephony regulated interconnection. Thus, core network operator fusions or alliances may be used to increase network customer coverage.

Convergence in services increases market competition and gives additional value to communication networks. As service provision is not limited to a specific network

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(e.g. telephony over PSTN), more agents will be able to provide each service, and users will be able to choose among an increasing number of service providers. As technology enables higher access rates and mobility, new services should be provided to increase the service provider portfolio value and to increase its ARPU. Service operators are required to develop or purchase “killer applications” (or highly demanded multimedia content on content distribution services) as a competitive advantage to differentiate from their competitors, while offering a complete set of services to seduce customers and users.

2.4.3.2 Cost

VoIP and all-IP networks have low switching network cost when compared to the traditional PSTN. If a widespread dark fibre offer exists, as occurs in most developed countries where fibre cable has been installed parallel to highways, railways, gas ducts or power lines, there is a small entrance barrier to the core network connectivity market. Also in a converged scenario, core network convergence allows agents to compete using only an IP backbone network. However, in the long run it will not be so simple. As core network operators grow in size by means of alliances and fusions (if traffic volume independent non-regulated interconnection model is maintained), regulators might play a role letting small core network companies survive by regulating interconnection charges, as it has been done in the telephony market.

On the other hand, access network deployment cost are higher, especially for fixed access networks and as network coverage increases. Access costs and required investments are high enough to prevent access competition. As a result, regulatory authorities have forced incumbent operators to offer access at a cost-oriented price to other operators in order to increase competition.

In a FMC scenario, different access technologies / operators may be used to reach the customer. The access network:

• Usually represents the biggest cost for a service provider

• Constitutes the distribution channel to customers and users

• Determines (among other factors) the QoS perceived by the user

Thus service operators should take special care in choosing the suitable channel for each service they provide and for each customer subscribed.

Service development costs evolution seems uncertain, although strategic because services add value to a network, which simply offers connectivity and mobility. On the one hand, new service development frameworks and IP technology standards lower this cost by enabling rapid development environments that will diminish the time-to-market of new services. On the other hand, strategic issues might advise to increase service development expenditure in order to achieve competitive advantage (e.g. launching a new service before the competitors).

2.4.3.3 Income

ARPU increment will be achieved by offering value added services for which people are willing to pay for. In the current situation, as depicted on ECOSYS deliverable 5, customers almost always pay a flat rate for their broadband connections and a basic package of services (email accounts, Internet access, storage for personal web


pages). Premium services should be provided using an adequate tariff scheme, and thus incrementing ARPU. The problem is how much extra revenues are service providers able to attract by means of more attractive service portfolio. Discovering, developing and launching new services to attract demand will encourage competition and investment at service level.

2.5 Ongoing standardization efforts

There are many standard organizations with activities at fixed and mobile areas that contribute to the concept of fixed mobile convergence. The 3G Partnership Project (3GPP) is responsible for the production of technical specifications for a 3rd Generation Mobile System based on the evolved GSM core networks. The 3GPP subsystem responsible for enhanced services is known as the IMS or IP Multimedia Subsystem [12],[13].

IMS is a framework initially specified for mobile communications only, to provide IP telecommunication services. It was originally defined by the 3rd Generation Partnership Project (3GPP), as part of their standardisation work for third generation (3G) mobile phone systems for W-CDMA networks in two phases (release 5 and 6). The IP Multimedia Subsystem (IMS) supports data, video, SIP-based voice over IP (VoIP) and non-SIP packed voice. IMS was designed to integrate with the PSTN and provide traditional telephony services.

Another organization called the 3GPP2 Forum also introduced a similar architecture, the Multimedia Domain (MMD) [14],[15] for third generation Code Division Multiple Access 2000 (CDMA2000) networks, and finally harmonized with IMS. Real-time services can only be properly supported using the release 6 of IMS specifications.

In the fixed network domain, Telecoms & Internet Converged Services and Protocols for Advanced Networks (TISPAN) is now responsible in ETSI for all aspects of standardisation for present and future converged networks, including Next Generation Networks (NGN) and VoIP. NGN denotes networks that will offer telecom-grade voice services using packet-switching transport technology. The packet switching transport can be in either the core network or both the core and access network. TISPAN is responsible for defining the NGN framework in order to provide a multi-service, multi-protocol, multi-access, IP-based network. The services include mobility/portability/nomadic use of services at any place and using any type of terminal [16].

The standard is completed with three releases:

-Release 1 addresses nomadicity and user-controlled roaming based on use of an access network attachment subsystem and is focused on xDSL/WLAN access methods. -Release 2 optimizes resource usage according to user subscription profile and service use and corporate users with specific requirements.

-Release 3 introduces full (inter-domain) nomadicity and high-bandwidth access methods such as VDSL, FTTH and WiMAX.


Figure 12. TISPAN standardization on converged networks

Concluding IMS is the Open Systems Architecture that supports a range of IP-based services over both PS and CS networks, employing both wireless and fixed access technologies and being the key technology for Fixed/Mobile Convergence (FMC). The service model that was initially introduced only for mobile communications has been used also by the 3GPP2 (a different organisation for CDMA2000 networks) and TISPAN (fixed networks) too. ETSI TISPAN and 3GPP are also working closely together. According to ETSI, IMS is becoming the “heart” of all mobile systems world-wide and within five years, “Fixed IMS” standardisation will have been completed and the industry will be ready to deploy and exploit the benefits.

• IMS first appeared in release 5 of the evolution from 2G to 3G networks for W-CDMA networks (UMTS), when SIP-based multimedia domain was added to NGN networks. Support for older GSM and GPRS networks is also provided. [12],[13].

• In 3GPP release 6, IMS (phase 2) and interworking with WLAN was added. • 3GPP2 (a different organisation) based their CDMA2000 Multimedia Domain (MMD)

on 3GPP IMS, adding support for CDMA2000. MMD is fully interoperable with 3GPP IMS [14], [15].

• 3GPP release 7 adds support for fixed networks, together with TISPAN R1. • "Early IMS" is defined for IPv4 networks, and provides a migration path to IPv6.

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3 MIGRATION SCENARIOS

A first classification for migration scenarios is determined by the type of agent/operator, which leads to different scenarios or starting points for convergence. These are their respective points of view:

3.1 Fixed operator

Fixed-only operators need mobility to provide FMC services. This can be achieved mainly by three ways:

• By becoming a pure MVNO, without any mobile network. This case is analysed in 3.1.1 Scenario 1: Fixed-Only Operator becomes MVNO.

• By becoming a new MVNO, and making this new network convergent with its previous fixed backbone infrastructure. Backbone will be used for mobile service switching as well (some new mobile network equipment is needed). This business model is analysed in 3.1.2 Scenario 2: Fixed-only operator becomes MVNO with its own transport network.

• By investing in new access technologies. As GSM and UMTS licenses are already under use by mobile operators, deployment of new Wi-Fi / WiMAX access is considered the best choice. This business models, its advantages and disadvantages are analysed in 3.1.3 Scenario 3: Fixed-Only Operator deploys Wi-Fi/WiMAX Network.

3.1.1 Scenario 1: Fixed-Only Operator becomes MVNO

The way the operator may become a MVNO depends on the market and regulatory conditions in the country. In some countries, such as Denmark, the regulator forces incumbents to open their networks to new entrants as MVNO. Thus, the fixed-only operator may get one MVNO license from the regulator, and pay the regulated cost-oriented interconnection fares to the incumbent.

In other countries, such as UK, a deal with an incumbent MO may be reached. The agreement defines the way interconnection is set its tariff, and both operators may share revenues.

The objective of the service is to offer the user the ability to make and receive calls (and use any other potential service) through fixed or mobile networks with one same terminal, and one bill. In order to fit this requirement, the partners share information at the intelligence level of the call enabling seamless handover between fixed and mobile networks.

At the beginning, a Bluetooth access point will act like a cell site on a GSM network. This allows the mentioned in-session handover between access points and GSM cells. In the future, Wi-Fi support is expected, what will allow this service to be more flexible, since terminals don’t have to register in the access point. Thus, roaming between GSM and many Wi-Fi hotspots and home and office networks will be possible.

A first option for the fixed operator is to reach an agreement with a MO to become MVNO just as a Mobile Service Operator as Virgin acts in UK. In this case, the operator does not do


any switching in the mobile services, and just buys the entire mobile service to the MO. The fixed operator uses its retail service to control the commercialization of mobile terminals, and would be able to launch convergent services using its mobile ally network to provide mobile access to customers.

Business Model

Figure 13. Pure MVNO business model

In this case, the mobility is managed by the MO, and in the SIM cards, the operator is the MO. Therefore, the MO will be the home network for the service users.

The main advantage for the fixed operator is the ability to provide convergent and mobile services without any investment, taking advantage of the fixed operator sales force and increasing the service portfolio. On the other hand an agreement must be reached with a MNO in order to get the wholesale service, unless the regulator rules this kind of contracts. The cost of this wholesale contract probably will determine the decision of investing and thus moving towards one of the following scenarios. However, this business model is important because it has the minimum time to

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market possible and enables the operator to win an early advantage in deploying convergent services.

Network Technologies

There are many network technologies involved in convergence. The first to be mentioned is IP. Both mobile and fixed networks should be IP-based. UMTS is IP based, although initially may support connection oriented voice calls. The fixed infrastructure allows IP network when using broadband DSL or cable. In the core network, MPLS is a good partner for IP because it allows faster switching.

In order to provide roaming between fixed-wireless and mobile cells, a fixed IP and dynamic routing list actualization are required. We may consider Mobile IP as an interesting technology, but handovers may result too slow and noticeable delays will avoid seamless handover in real-time services such as VoIP. Cellular IP (much faster) combined with bicasting could be a good alternative for this.

Services offered through the converged IP network need to be controlled by signalling. Mobile world’s IMS is generally accepted to be the right choice. With a SIP-based protocol, it enables operator-controlled service provisioning peer-to-peer through the IP network, and even between different networks (which could be the case in some convergent services).

3.1.2 Scenario 2: Fixed-only operator becomes MVNO with its own transport network

In order to take advantage of its own network, another possibility for the fixed operator is to use and pay only for the MO access network. Fixed MVNO would interconnect to MNO switching centres, maintaining control of its users position and calls. When a MVNO user is called, traffic is transported via the MVNO network to the nearest interconnection point. In case of outgoing calls or traffic, the MNO would derive it to the MVNO network in the first interconnection point possible.

Figure 14. MVNO with its own network


It will be necessary to invest in equipment needed to perform the mobile call control and probably new switching devices. New interconnection points with the MO may be needed too in order to approach access and minimise the transport of traffic using the MO network. Figure 14 [11] shows how a mobile network operator interacts with the MO in the GSM case.

Business model

Figure 15. Business model for the MVNO with its own network

In this scenario, it is the fixed-based operator who manages mobility. In the SIM card of the device, the operator name is the fixed one. Consequently, the terminals will always act as visitors in the MO’s network.

The main advantage for the fixed operator is the ability to provide convergent and mobile services without low investment, taking advantage of the fixed operator sales force and increasing the service portfolio. On the other hand an agreement must be reached with a MNO in order to get the access wholesale service, unless the regulator rules this kind of contracts. The cost of this wholesale contract, or even the impossibility to reach it, will probably determine the feasibility of this scenario.

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3.1.3 Scenario 3: Fixed-Only Operator deploys Wi-Fi/WiMAX Network

The operator may somehow prefer to deploy it’s own Wi-Fi/WiMAX network using its own existing access, transport and core network. This option needs more initial investment (and thus increases time to market), but avoids the need to pay a third party for the mobile access or service.

The main advantage is that lower tariffs can be applied to calls, as they will always be routed through the fixed line network. This is an interesting choice for customers who usually make calls from very populated areas (where Wi-Fi deployment is easier and more profitable).

Nevertheless, in sparse regions coverage will be harder achieved since there are scarce communication infrastructures. Mobility is also cue, since Wi-Fi performs shoddily, and handovers could be a problem. This might be improved when WiMAX 802.16e is concluded (expected in the next years) and equipment manufacturers adopt it.

Business Model

Figure 16. Business model for a fixed operator with Wi-Fi access network

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3.1.4 Fixed Operator Migration Strategy

Each scenario defined increases investment needed to provide convergent service, and thus increases the time to market of its business model.

The main factor to consider is the possibility of agreeing the access or service wholesale with a MO. If this is possible, then the first scenario might be a good starting point as no investment is necessary. As the different business models may coexist a feasible solution might be migrating to the suitable model for each region depending on the expected income and the return on investment. In case no mobile network wholesale service is possible to contract, the only possibility for the fixed operator is to deploy its own wireless access using Wi-Fi and / or WiMAX technologies.

3.2 Mobile operator

3.2.1 Scenario 1: New entrant as an FVNO

The new entrants or Greenfield mobile operators have been in operation for the last few years in many countries, especially in Europe. A new entrant mobile operator, here is characterized by having its own 3G UMTS license, and no previous presence in the market of operation. This means that the new entrant has no legacy networks such as GSM, has to establish its own UMTS network according to the regulatory requirements as well as acquire new subscribers, mainly from existing competitors. In this scenario, we assume that the new entrant has started its UMTS operation and has already deployed a country-wide UMTS network providing voice and multimedia services to its customers. Thus, it is no longer a 2G MVNO.

From a new entrant’s perspective, customer acquisition is the key for achieving a viable business case. Starting from a zero installed customer base, it is also the component that requires greater investment. Convergence enables an operator to provide services over multiple-access networks to its subscribers. A new entrant, by definition, has only a 3G network for providing services to its subscribers, whereas the future multimedia services such as games, video and audio requires intensive resources such as bandwidth, processing power etc. which a 3G mobile network and terminal are unable to provide at the moment. The commercial deployment of Mobile Broadband Wireless Access (MBWA) with throughput of 15-20 Mbps and beyond, suitable for service access similar to the existing fixed-broadband is expected to be feasible only in 6 to 10 years time period from now. Thus, incumbent operators (most of whom have integrated operations, i.e., fixed and mobile) have an advantage over new entrants, when it comes to providing a complete package of services, based on convergence, to the subscribers. It is this reason that is a major factor for new entrants to become a Fixed Virtual Network Operator (FVNO), for the short to medium term i.e., 2 to 5 years until it is capable of providing mobile broadband services. The migration phases for a new entrant is illustrated in Figure 17.


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3G + FVNO 3G + 4G MBWA Operator

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Figure 17. Migration phases and roles for new entrant

By FVNO, we mean that the new entrant will rent the network resources from an existing fixed network operator for providing fixed broadband services to its subscribers and thus offer a complete package, competing with the integrated operators. An example scenario is to have a new entrant offering 3G services over its own network across the country, mainly in the outdoor areas, combined with xDSL services at home and WLAN or WiMAX services at public hotspots as an FVNO over a fixed-network operator’s network. The business model for such a scenario is illustrated in Figure 18.

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Figure 18. Convergence business model for new entrant

Since convergence is mainly based on the IP-based IMS domain which is a natural part of the technology roadmap of UMTS and beyond, mobile operators, new entrants in particular will not have major issues adapting to the convergence scenario. The convergence may occur at the core. In addition to this, appropriate points of convergence need to be identified for maintaining greater control over its subscribers and networks while reducing


the OPEX and CAPEX. New entrants will have minimum cost of network integration unlike an incumbent operator who has legacy systems to take care of while considering its migration plans. Having said that, the real costs for a new entrant, in the short to medium term, will be in customer retention and acquisition, personnel, subscription management for both fixed and mobile operations, fixed-network rentals and new service provisioning.

3.2.2 Scenario 2: Incumbent mobile operator converging broadband

In this scenario, the incumbent mobile operator builds upon its IP multimedia core network (IMS) and more and more broadening wireless network bandwidth, to cater for ever increasing use cases of traditional and new communication, data and media services.

The business idea is to utilize the invested network resources more profitably, as bigger share of the customers’ spending on communication and multimedia can be attained. Further synergies arise from single point of provisioning, service and management. In addition, content and applications development agreements can be made more profitable as the customer base and consumption widens.

The radio network technologies build on the basis of 2G network for mainly voice service, upon which the data upgrades (GPRS, EDGE) and UMTS network with its growth paths (HSPA) are utilized for wide band services. Integrated WiMAX network is built for truly broadband access, and DVB-H (and possibly also DVB-T) is utilized for broadcast services. All the networks connect to the IP mobility system (IMS) core for service provisioning.

Voice communication convergence is to follow the fixed to mobile substitution pattern, and in the same way the wide band services can be provided by the mobile operator with more freedom and flexibility, as the wireless data terminals and access cards are spread. For most broadband use cases, possibly excluding the most bandwidth hungry cases, where fibre is required, WiMAX, either as its fixed or mobile version, can be built upon.

Thus almost all communication, data and media services can be provided from one company, without relying on legacy copper network, but utilizing current and future wireless technologies. As an added value, the mobility and flexibility in access terminals can be easily provided. The management of diverging application realm, which is taking place due to increasing personalization, keeps in control through single point of customer and service data management.

Due to the added values described above, the mobile operator providing full range of converged services can put the price level somewhat higher than the partial providers, thus maintaining profitability, as in the same time benefiting from synergies in system investments and operating expenses.

3.3 Integrated operator

3.3.1 Scenario 1: Migration Scenario towards Common IP Service Platform

Under this scenario we could examine the case of an operator who already owns both fixed and mobile networks as well as transport and core network. As an example we can consider an operator who offers GSM and 3G services in the outdoor areas while indoor services (home, office) is a combination of xDSL and WLAN and there are also a number of WiMAX/WLAN hotspots in public areas. In addition there are some network elements at


both transmission and core networks that are commonly used by both access networks reducing the CAPEX.

Furthermore the main business sectors such as marketing, billing and customer care are shared by both fixed and mobile networks in order to reduce the operational cost of the overall network.

To achieve the convergence between the fixed and the mobile both networks should be based on IP. As mentioned in the previous sections the IP Multimedia Subsystem IMS, (which enables IP connections between terminals using the SIP), is the general accepted service delivery platform. IMS also specifies interoperability and roaming, provides charging and security, thus making it easier to achieve service interoperability across different operators in terms of connectivity.

To be able to provide convergence services the operator should strongly interact with a CPE vendor in order to be able to provide to his clients the proper equipment. Until SIP-compliant FMC handsets are available in the market dual-mode handsets that enable access over WLAN or Bluetooth networks at homes and offices in addition to cellular would solve this problem.

The aim for the operator is the benefit from reducing operation and capital expenses as well as from a broader base of services and applications that can provide to the end users (improved service basket). The move towards an all-IP network will ensure that operators will remain the end user’s best choice for access to communications, media, content and services.


Figure 19. Convergence business model for fixed & mobile operator

3.3.2 Scenario 2: Migration of Service Platforms

The ongoing migration towards IP in the telecommunications industry is well known. This convergence to a single communications protocol makes way for a decoupling of services from underlying transport and access networks which yields a flexibility resulting in both low investment and operations costs including increased productivity for operators and service providers. For customers, the evolution of IP has been an important driver for the evolution of home networks and the integration of communication and media services. With increasing demand for use of Internet, data and voice services across both fixed and mobile networks, one main challenge for an integrated operator will be integration at service level. The integrated operator has a unique position related to infrastructure and resources, but there will be high demands for service delivery, where efficiency and time to market are some of the key factors for success. The integrated operator will also be required to enable service delivery for 3rd parties, and the need for flexibility in service platform functions is crucial in this aspect. Efficient offering of service enabler components to 3rd party service


providers, across fixed and mobile infrastructures, will be one important aspect of the integrated operator’s service platform.

Migration of service platforms will yield a migration towards IP and dynamics in service creation and delivery. However, this picture is not free of challenges. It will be costly to migrate too fast, as many legacy systems are in major use and are profitable. Operators will not migrate profitable platforms if not seen business strategic. Therefore, migration will be based on strategic decisions related to profitability and market demands.

Migration of service platforms may be related to the convergence and migration of Business Support Systems, Operations Support Systems, service creation environments etc. In the following we focus on the part’s related to Call Session Control.

3.3.2.1 Today’s services and platforms

The revenues coming from services in fixed networks today are to a large extent due to basic telecom services such as telephony and broadband access. Related to PSTN/ISDN telephone services a large number of supplementary services such as putting a call on hold, forwarding the call, having a three-party call etc. are part of the service portfolio. Lately, an increasing part of the revenues has been due to VoIP based solutions and additional services delivered as part of the broadband access such as Internet access, email, instant messaging, SPAM filter, storage for web pages, pictures etc. In addition, the trend has been that the major flora of new services in the Internet is applications provided from software vendors and not delivered from the traditional Telco service platforms. This is the case for instance for MSN Instant messaging, Skype etc, and future service growths are in particular foreseen for such Application services.

Incumbent fixed service providers of today have several platforms deployed over several years, with many of the platforms serving only a few services. In addition to various service platforms in the category of application providing, such as mail, virus and spam platforms and webmail, there are several services implying routing and call control functionality. Examples of such services may be Premium services, Green number, Quing services etc. All services that are likely to utilize the possibility to perform routing based on geographic origin and time of the day are for PSTN/ISDN networks implemented on Intelligent Network platforms. The Intelligent Network platforms originally used No.7 signalling access (INAP) to produce supplementary/advanced services on PSTN/ISDN networks.

In addition to voice, three main mobile services today are SMS, MMS and WAP. In addition to user-to-user messaging and Internet surfing, these services provide end-users with the possibility to receive content and information from content providers. Some of the most popular types of content are ring tones, logos, games, pictures and animations. Some common information type of content services is sports news and results, telephone directory and timetables for public transport. Content providers are able to charge customers due to mobile operators´ Content Provider Access (CPA) service.

In mobile service providing, CPA enables content providers to deliver content to end-users and at the same time bill the end-users for the content delivered. The content providers will when delivering content get revenue due to the principle of revenue sharing transaction. CPA SMS and CPA MMS work in similar ways. End-users´ messages are routed from the SMSC/MMSC to the CPA platform, where they are put in queues dedicated for specific content providers. Communication between content providers and the CPA platform usually runs over TCP/IP, and requires that the


content provider implements the CPA API specific for the platform. In this way, the content provider and the CPA platform can exchange information about the customer and the content service, which makes it possible for the CPA platform to conduct billing of the customer. The CPA platform then handles refunds to the content provider. For CPA WAP, the content provider will receive information about the end-user in the WAP session header when the user communicates with the content provider´s WAP gateway. This information is forwarded to the CPA platform, which then conducts billing and handles refunds. Figure 20 shows the basic principles of CPA.

CPA platform

WAPgateway

WAPstart page

SMSCSending/recievingmessages to/from

customer

MMSCSending/recievingmessages to/from

customer

BillingHandles billing of

customers

Content providerContent andapplications

End-user

The customer logs on to a WAP session and is routed to a start page

SMS messages to/from customer

MMS messages to/from customer

The customer chooses a service

Mobile operator handles billing of customers

Mobile operator handles refund to CP

Internet, TCP/IP

CPA platform

WAPgateway

WAPstart page

SMSCSending/recievingmessages to/from

customer

MMSCSending/recievingmessages to/from

customer

BillingHandles billing of

customers

Content providerContent andapplications

End-user

The customer logs on to a WAP session and is routed to a start page

SMS messages to/from customer

MMS messages to/from customer

The customer chooses a service

Mobile operator handles billing of customers

Mobile operator handles refund to CP

Internet, TCP/IP

Figure 20. CPA platform environment

The application environment of the traditional intelligent network for value-added services (VASs) was built upon circuit-switched network technology. Hence, it has characteristic limitations, such as centralized SCP-based control, an SS7-based signalling protocol, an operator network’s embedded closed system, a long, complicated standards update process, and so forth.

The Intelligent network concept has further been developed and used in mobile networks, CAMEL, as well as further developed to support Intelligent network services on IP-networks. In particular the migration aspects for voice, that is keeping the supplementary services when providing VoIP, have been important aspects. As part of this development the interfaces towards the networks resources have changed from No.7 based signalling towards SIP.

3.3.2.2 IMS as a step in migration towards FMC

An integrated operator, that is an operator serving both fixed and mobile customers, will have other motivations for entering the era of FMC than those only having fixed or mobile networks. The integrated operator needs to have new means to increase market shares in order to maintain revenue. The integrated operator is already


serving both markets and the challenge is to increase market shares in addition to making the most of the current positions in order to serve the customers across the platforms. The Integrated operator will have a starting position implying the ability to establish solutions across the whole portfolio of service needs. Offering FMC services will strengthen customer relations across different platforms, and the provider will have the potential position to achieve competitive strength compared to providers only in the fixed or mobile business due to the ability to have one bill, one number, as well as a set of services that may be delivered independently of terminal and location. The success of FMC will to a large extent depend on the customer’s valuation of the ability to always have access to his/her services, as well as always being connected (and be reachable). As part of this, user friendliness and tailored service delivery will be important aspects.

From the Integrated operator’s point of view the integration of the service platforms for fixed and mobile gives the possibility to have the same interface for 3rd party SP, which makes the operator a more attractive service integrator due to the ability to reach more customers in addition to the expected value for the end-users due to the same services being delivered independently of which network and terminal currently used. For the integrated operator the benefit of doing things once, will have large effect on the CAPEX and OPEX spent on service creation, and in addition simplicity and cost reductions will be achieved due to the same type of BSS and (OSS) used throughout the whole service delivery process .

In order to meet these challenges, an IP-based value added Service Delivery Platform will be a way forward to provide converged services across fixed and mobile domains. As described in chapter 2.3.2 a service platform for providing future value added services may potentially contain many different types of service enablers. These may often be grouped into categories, where BSS and OSS in addition to several enablers related to services provisioning, such as service creation and service management, are important enabling functionalities in order to deliver services to end-users. In addition, call session control will be an important aspect, and IMS is likely to be part of the service delivery platform solution for an integrated operator. IMS will provide functionality necessary to fully deliver the necessary call session control. Relevant aspects of IMS will be presented in the following paragraphs.

Figure 21 illustrates how IMS is related to the Horizontal layered service support framework as described in chapter2.3.2.



Applications

……

profiles


Streaming server

Location server

Service monitoring

Enablers

Call control/Policy


API API API

APIAPI

API API API


Applications

……

Profiles

Voice XML Profile DB …….Presence

Streaming server

Location server

Service monitoring

Enablers

Call control/Policy


API API API

APIAPI

API API API

IMS


Applications

……

profiles


Streaming server

Location server

Service monitoring

Enablers

Call control/Policy


API API API

APIAPI

API API API


Applications

……

Profiles

Voice XML Profile DB …….Presence

Streaming server

Location server

Service monitoring

Enablers

Call control/Policy


API API API

APIAPI

API API API

IMS

Figure 21. IMS as part of Horizontal layered service support framework

Through use of IMS, mutual de-coupling of the applications from the session/call control and the transport as well as access technology independence of session/call control and applications is achieved. IMS and its extensions support control of IP Connectivity Access Networks, including functionality such as QoS, admission control, authentication, etc. as well as the coordination of multiple control components to a single core transport for resource control. Through use of the IMS interworking and interoperability with legacy and other networks is achieved

The heart of IMS focuses on Session handling and call control. IMS is a collection of core network functional entities for the support of SIP based services. IMS supports registration of the user and terminal device at a particular location in the network. As part of registration, IMS supports authentication and other security arrangements. IMS utilises SIP based control. The services supported by IMS may include multimedia session services and some non-session services such as Presence services or message exchange services.

In addition to services for the user, IMS defines a number of network reference points to support legacy services. IMS supports various application services via the services support architecture. IMS supports operation and interworking with a variety of external networks via defined reference points. IMS supports defined reference points for the collection of accounting data in support of charging and billing operations.

IMS also supports defined reference points to the underlying transport infrastructure for the enforcement of QoS negotiated by session signalling and for flow gating. These reference points also support the exchange of information in support of correlation of charging between IMS and the underlying transport.

Migration to an IMS-based platform implies migration of the existing circuit switched based signalling (Call Control) and platforms towards IP based signalling and platforms. This implies among other things address translation between E.164 and


IP addresses based on SIP, and converting the call control based on SS7/ISUP-IN into IMS call control based on SIP/SDP for use across heterogeneous access networks. As part of the IMS concept, IP service enhancements of the traditional valued added services based on CAP/CAMEL (SIP based VAS) will be performed. The charging principles have to be tailored to IP based charging such as for instance the possibility to have charging of QoS and volume, instead of traditional circuit switched pricing and rating which is subscription and time based. A part of the migration development of a common IP messaging platform will be important, where the circuit switched SMS platform will be migrated to the new integrated platform environment. However, one of the most important migration task will be the migration from circuit switched voice to VoIP.

IMS is the focus of standardization work both in 3GPP, ETSI TISPAN and ITU FGNGN. As part of the standardization interfacing towards existing service platforms, for instance 3GPP standardization has specified interfaces both towards for instance CAMEL and OSA, while the work in ETSI and ITU is ensuring that the IMS specifications also take into account interfaces towards the fixed environment.

Figure 22 tries to illustrate the motivation of service platform migration. In short term, the overall goal is migration of existing services – to deliver existing services over a common IP service platform across fixed and mobile networks. In a longer term, the target is to be able to deliver new services as a result of new functionality in the service platform.

Platform functionality

Time

Platform functionality

Time

Migration of

existing services

New

services

Migration of

existing services

New

services

Figure 22. Stages of service platform migration

An example of a short-term migration scenario of existing services could be a scenario involving different messaging services of today. Services like e-mail, IM, SMS and MMS might all be delivered over a common IP messaging platform. See Figure 23. Customers could have just one mailbox and be reachable with one, logic “phone number”, and access to the service should be independent of device or access technology. The IP messaging platform should also allow convergence between voice, text and multimedia messages. The principles of CPA should be continued in the messaging platform yielding access to 3rd party providers, and the platform should be part of a horizontal layered and modular based structure as described earlier in this document.


Figure 23. Common IP messaging platform

3.3.2.3 Concluding remarks: migrations aspects of service platforms

IMS is an important step for an integrated operator on the road from a vertical service platform structure towards a horizontally based Service Delivery Platform. Such a system will fill the needs for efficiency and flexibility in service creation, among other things due to the possibility to reuse service enablers. Overall, this type of service platform also makes it possible to more efficiently enable 3rd party service providers to create applications based on operators´ service enablers.

Among the challenges in the migration path, is the fact that due to tight integration of run time systems and databases for specific services from vendors, platforms will often be migrated platform by platform and integrated over time. In addition, as mentioned earlier, many legacy systems are profitable, and they will be to costly to migrate too fast. Some platforms will even live until the service dies, i.e. platforms e.g. CS type of platforms will live until the services are replaced by totally new services.

The integrated operator can definitely be seen to have a competitive advantage when it comes to FMC. With extensive network resources, integration at service level yields an opportunity to offer 3rd party service providers and end-users complete and integrated services across fixed and mobile networks.

Another aspects of migration towards FMC, is that most integrated operators try to find sources to cost reduction and more efficient service production. Technological platforms, such as IMS, represent platforms for future oriented service provisioning in IP-based networks, and at the same time make FMC come through at the session control level and have the ability to interact with additional Service Delivery Platform components in a standardized way. At the same time, IMS cater for the interaction to legacy platforms, and as such takes the migration aspects into account. Due to this the FMC and cost reduction strategies should be considered in relation to each other. That is, an integrated operator looking for cost reduction, should not forget the ability to enable FMC as part of the investments in cost reduction platforms and systems.

IM E-mail SMS MMS

IP messagingplatform

IM E-mail SMS MMS

IP messagingplatform


3.4 Operators without existing access networks

3.4.1 Scenario 1: Fixed + mobile virtual network operators

Players without any access network infrastructure of their own have also the chance of providing convergent services by acting as virtual network operators in both mobile and fixed networks. These types of “total” virtual network operators might evolve from MVNOs or broadband service operators, or from companies that already have both kinds of operations active but have not utilized the possibilities of converging the two.

The services provided by these operators need not be any different from the fixed-only / mobile-only / integrated operators. However, these kinds of players might have background in some other, possibly complementary businesses such as in the media industry. In these cases, there might be possibilities for differentiation strategies by e.g. offering exclusive and attractive content for subscribers.

Two possible business model configurations are depicted in Figure 24, including a virtual operator with complementary content provisioning business (a), and a virtual operator without any content provisioning businesses (b).

Subscriber

Serviceoperator

Mobileaccess

networkoperator

Contentaggregator

Contentprovider

Contentproducer/

owner

Broadbandaccess

networkoperator

Subscriber

Serviceoperator

Mobileaccess

networkoperator

Corenetworkoperator

Broadbandaccess

networkoperator

Contentaggregator

Contentprovider

a) b)

Contentproducer/

owner

Corenetworkoperator

Figure 24. Convergence business models for virtual network operators

For readability, the business model figures are not showing the various interworking and application/service platform functions controlled by the virtual network operator. These are assumed to be included in the core network operator role.

For fixed+mobile virtual network operators, there are also possibilities to operate access networks based on alternative radio technologies, such as WLANs and WiMAX. If the operator was extending its (virtual) broadband service offering with home WLAN services, it might consider deploying also hotspot WLAN services or city-wide WLAN / WiMAX networks. Of course, it might also decide to pursue the virtual operator strategy on the alternative technologies, if possible.


3.4.2 Scenario 2: 3rd party application/service providers

Traditionally, communications services have been provided by those who actually own and operate the underlying network infrastructure. Virtual network operators are one step away from this thinking, but global access to IP networks and Internet through all access networks allows even more radical business models to be crafted.

By 3rd party application and service providers, we mean players that are completely detached from the network service provisioning business, and are providing services that require only IP connectivity (with possibly some QoS level) and some user-installable software running on the terminals. Good example of these kind of services is Skype, a VoIP software currently running on millions of PCs around the world, and foreseen to be available also to mobile devices in the future.

Subscriber

3rd partyapplication/

service provider

Fixed, mobileand othernetworks

and services

Figure 25. 3rd party application/service provider business model

The business model depicted in Figure 25 is very simplistic, as usually there are no connections between the network provisioning business and the application/service provider. The detailed business models are, however, far from simple, as the companies are often targeting global user bases with free-of-charge services.


4 CONCLUSION

Convergence has in recent years gained greater support and attention from operators, vendors and standards organisations in communications industry. The ability to provide the same service over heterogeneous networks, without compromising on the quality, has been a goal that was tried in the past with no success. However, current developments show signs of making convergence a reality. There are multiple factors driving the adoption of convergence by players in the communications industry. The emergence of IP as the network layer protocol has been a major enabling factor for network and service convergence. However, it is the business aspect that has motivated operators, both fixed and mobile, to move towards a convergent strategy today. Convergence has the potential for considerable cost savings, both CAPEX and OPEX in the networks and services while providing greater convenience for the end-users.

Unlike migrations in the past, migrations to a convergence scenario is not merely a technology or service upgrade. Instead, it would require changes in the value network, besides the necessary technology and services. Each operator has to make decisions on this migration based on its existing characteristics. Therefore, there is no single convergence solution that fits all the players. In this deliverable, potential migration scenarios for operators with different characteristics have been discussed. These discussions are precursor to the process of identifying scenarios for further techno-economic analysis and therefore not conclusive in nature.


References

[1]. D. Yang, S. Kim, C. Nam, J-S Moon, “Fixed and mobile service convergence and reconfiguration of telecommunications value chains”, IEEE Wireless Communications, October 2004

[2]. http://www.computerweekly.com “BT heads fixed mobile convergence drive”

[3]. http://www.telecommagazine.com, “Korea: Broadband, Convergence and Portability Big plans, big projects—but big prospects?” by Ken Wieland Mon, June 6. 2005

[4]. http://www.thefmca.com/

[5]. M. Vrdoljak, S Vrdoljak, G. Skugor, “Fixed-Mobile Convergence Strategy: Technology and Market Opportunities”, IEEE Communications Magazine, February 2004

[6]. M. Caincetta et al. “Convergence Trends for Fixed and Mobile Services”, IEEE Personal Communications, April 1999

[7]. Convergence Service of Fixed and Mobile Network, ETRI, Marketing Strategy Research Team

[8]. ITU-T Recommendation Q.1761 (2004), Principles and requirements for convergence of fixed and existing IMT-2000 systems

[9]. FMCA, Press Releases (16 July 2004), http://www.thefmca.co.uk/downloads/fmca_press_release_16_july_04.pdf

[10]. Lind, J., “Convergence: History of term usage and lessons for firm strategists”, ITS 15th Biennial Conference, Berlin, Germany, September 2004.

[11]. Do Van Thanh, “The Mobile Virtual Network Operator Concept: Truth and Myths”, Telektronikk 4, 2001.

[12]. 3GPP. TS 22.228 “Service Requirements for the IP Multimedia Core Network Subsystem”, Release 5.

[13]. 3GPP. TS 23.228 “IP Multimedia Subsystem”, Stage 2, Release 6.

[14]. 3GPP2. S.P0058 “IP Multimedia Domain System Requirements”.

[15]. 3GPP2. X.P0013.0 “ IP Network for CDMA2000 Spread Spectrum Systems. 3GPP2 all-IP Core Network Enhancements for Multimedia Domain (MMD) Overview”.

[16]. ETSI TR 00001 V0.3.0 TISPAN_NGN Release 1: Release Definition.

[17]. 3GPP TS 43.318 “ Radio Access Network ; Generic access to the A/Gb interface;” Stage 2, Release 6.

[18]. http://www.3gpp.org/ftp/Specs/html-info/43318.htm

[19]. Lind, J., “Convergence: History of term usage and lessons for firm strategists”, ITS 15th Biennial Conference, Berlin, Germany, September 2004.

[20]. 3GPP and TISPAN workshop on “IMS over Fixed Access”, Washington, March 2005, http://www.3gpp.org/ftp/tsg_sa/TSG_SA/TSGS_28/Docs/pdf/SP-050391.pdf

[21]. 3GPP TR 23.806 “ Voice Call Continuity between CS and IMS study”, Release 7


Acronyms

Acronym Term Description

2.5G 2G Systems + Advanced Data Services (i.e. GPRS)

3G Third Generation Mobile Systems (as defined by IMT-2000)

3GPP Third Generation Partnership Project

API Application Programming Interface

ARPU Average Revenue per User

ASP Application Service Provider

B3G Beyond 3G

BSP Backbone Service Provider

BSS Business Support System

CAPEX Capital Expenditure

CPA Content Provider Access

CS Circuit Switched

C&B Charging and Billing

DMB Satellite Digital Multimedia Broadcasting

DRM Digital Rights Management

DVB Digital Video Broadband

DVB-H Digital Video Broadband Handheld

DVB-T Digital Video Broadband Terrestrial

DSL Digital Subscriber Line

EDGE Enhanced Data rates for GSM Evolution

ERG European Regulators Group

EU European Union

FMC Fixed Mobile Convergence

FVNO Fixed Virtual Network Operator

GAN Generic Access Network

GPRS General Packet Radio service

GPS Global Positioning System

GRX GPRS Roaming eXchange

GSM Global System for Mobile communications

IMS IP Multimedia Subsystem

IP Internet Protocol

ISP Internet Service Provider

IX Internet eXchange


Acronym Term Description

LBS Location-based Service

MMD Multimedia Domain

MVO Mobile Virtual Operator

MVNO Mobile Virtual Network Operator

NAP Network Access Point

NRA National Regulatory Authority

OPEX Operational Expenditures

OSA Open Systems Architecture

OSS Operation Support System

PS Packet Switched

QoS Quality of Service

ROI Return on Investment

SDP Session Description Protocol

SIP Session Initiation Protocol

SO Service Operator

SP Service Provider

TISPAN Telecoms & Internet converged Services & Protocols for Advanced Networks

UMA Unlicensed Mobile Access

UMTS Universal Mobile Telecommunications System (as defined by 3GPP)

URI Universal Resource Identifier

VASP Value Added Service Provider

VoIP Voice over IP

WAN Wide Area Network

Wi-Fi Wireless Fidelity

WiMAX Worldwide interoperability for Microwave Access

WLAN Wireless Local Area Network

WWW World Wide Web

techno-ECOnomics of integrated communication SYStems and · 3.1.2 Scenario 2: Fixed-only operator...

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