The news that 3 UK is now accounting for 10% of all UK singles downloads is interesting.

Now, first off, there’s no denying that the singles market has collapsed from its heydays. So there’s an argument that 3 is merely helping itself to a slice of a pie that’s getting smaller all the time. But when you consider that the 10% is a proportion of all sales, downloads and physical, that’s still impressive going for an operator in an industry that only thee years ago looked to have ruined its relationship with the music business. Of course, the music industry needs new channels (legal ones that make money) to market as much as mobile operators need cool content. So it was probably only ever a trial separation than a full on Mills-McCartney break-up. But how has 3 made the most of music? Well, first off it is aware of its mobile status. It focuses on charts, the top ten to twenty songs. It is less interested in the long tail, which is where internet vendors make up much of their sales. By doing so, 3 can keep menus short and its inventory fresh. It’s so confident in its music store now that it has recently run a very high profile outdoor and print campaign for it. Vodafone too is working on its portal, moving away from its previous structure to a site centred around songs and artists, rather than product categories. Because it’s not just about full track downloads, of course. (3 itself sells almost as many video tracks as it does audio singles) But however you skin it, mobile music is now beginning to fly as a service. There is one element of concern however, and that is that the rate of growth is now slowing. Sometimes that’s inevitable as a product matures and you approach mass market volumes. But some think that the reason for this slowdown is that the current user experience has now done about all it can do in terms of attracting usage. Early adopters are prepared to use the service, but to get to the next level operators need new approaches in their marketing and UI. Of course, another way to ramp up usage is to offer something for free. And with 3 now offering IM free to its users (with a fairly roomy usage policy) we can see the operator continuing to be disruptive in other areas too. The ugly duckling may yet turn into the swan. We may even see it successfully IPO. Stranger things have happened.

Tetra market focus

The market for tetra equipment has grown steadily over the past decade, as new sectors and geographical areas have begun to emerge. MOBILE EUROPE examines ITS development.

TETRA Market Status: Current Status
TETRA market figures show healthy year-on-year growth for the last 10 years (currently 37% to the equivalent point as last year).
    The fastest growing regions are Latin America and Asia Pacific, and the fastest growing sectors are Commerce & Industry and Utilities. There is also an increase in the number of countries where TETRA contracts have been won, from 70 in 2004 to 88 in 2006. This represents a 25% increase, with 53 of these contracts being outside Europe.

TETRA Geographic Markets
Europe as a whole currently represents 75% of TETRA business and is likely to dominate TETRA sales for the next few years. The rate of growth has, however, slowed down after the lofty peak in 2002-2003 and TETRA is entering the typical maturity phase of the product lifecycle. It is reasonable to expect that awarding the outstanding nationwide PSS contracts in Europe to TETRA, especially the BOSNet contract in Germany, will inject an additional boost to sales. This is likely to reverse the decline in the rate of growth and provide a boost to TETRA sales in Europe for the next few years. In the medium term, after all major PSS and Transportation contracts for digital systems have been let, the sales in Europe will largely come from replacements and upgrades, for which an early availability of TETRA Release 2 is essential.
    For these reasons the growth of TETRA business will increasingly depend on increased penetration into the markets outside Europe. In a nearer horizon, the highest potential lies in the Asia Pacific region, where China and Korea represent short to medium term potential, and India medium to long term potential. There is also large business potential for TETRA technology in Latin America, especially Brazil, Mexico and Argentina, though the availability of finances is likely to continue to be the limiting factor.
    In the longer term, the growth of TETRA business must come from entering new markets. North America (US and Canada) is a significant opportunity and, to a lesser extent, Australia and New Zealand. With an increasing interest in TDMA technologies being shown in North America there is a potential opportunity for vendors to develop this market and the Association may be called upon to support such activities.

TETRA Market Sectors
Almost 50% of TETRA business currently comes from Public Safety and Security (PSS) market sector. Since this is the traditional mainstay of PMR business, all the indications are that this trend will continue, if not get bigger, as the demand for mobile communication solutions for PPDR grows ever stronger. Transportation is the next biggest sector representing a further 25% of all contracts. It comprises several sub-sectors: private transport (taxis), mass urban transport (bus and metro), airports and railways.
    Utilities are emerging as the third biggest sector, which follows the traditional PMR business pattern. Following almost two decades of ‘flirting’ with PAMR and even Cellular, the Utilities are finally accepting that their business needs are akin to other professional users, like the Emergency Services and Transportation. This is especially so at the times when they have to deal with disasters – either natural or man-made. It is apparent, in these situations, that their mobile communication needs could only be fully met by the professional mobile radio systems, where TETRA is increasingly emerging as a clear winner.

Market Sector Update
The recent decision of the TETRA Association Board to set up a special sub-group to target TETRA sales to the Railway industry is likely to provide additional business opportunities for TETRA outside Europe in the short to medium term. In order to monitor the effectiveness of that activity, it is proposed for the future, to separate this segment away from transportation into its own category of Railways. Depending on the outcome of this activity, there may be a merit, in the future, to consider similar focusing of the Association’s resources on other sectors and sub-sectors, which could benefit from it, e.g. Military, Ports and Airports, etc. The introduction of Release 2 TETRA is likely to further develop the data-only sectors and applications, e.g. telemetry, telematics, etc., or even open up some new sectors, yet unidentified, thus creating an additional potential for TETRA business.

Mobile TV

Amid the flurry of  hype surrounding mobile TV, various network models and technology platforms have emerged as contenders. Mike Dallimore, Radio Frequency Systems Vice President Broadcast, Towers and Defence Systems, explores the options.

There is presently a great deal of industry hype surrounding ‘mobile television’. Said by some to be the next ‘killer app’ of the mobile sector, and dismissed by others as having no sustainable business model, mobile TV is a conjure of possibilities. It lies at the eye of a maelstrom of technologies, network models and frequency bands, waiting for many trials to end and the manifestation of a clue as to the most practical and commercially viable direction.
     The notion of delivering television signals to a moving receiver is not an entirely new concept. A number of countries have for years enjoyed live digital television in buses and trains, courtesy of digital video broadcast terrestrial (DVB-T) technology. Utilising coded orthogonal frequency division multiplexing (COFDM) modulation, DVB-T was originally designed with mobile applications in mind. The signal can accommodate variations in signal strength, field strength and multiple reflections that typically reach a receiver in motion.
     However, despite this foresight in its development, DVB-T – as it stands – is not appropriate for broadcasting to handheld devices. Nor is its US counterpart, the advanced television systems committee (ATSC) standard, utilising 8 Vestigial Side Band (8VSB) modulation, which was never designed for mobile applications.
     Experiencing TV on handheld devices raises a whole new set of issues that have spawned several new broadcast technology platforms. Attracting the most attention globally is the digital video broadcast to handhelds (DVB-H) standard, which is derived from DVB-T. The important difference is that DVB-H transmits the signal in bursts in order to conserve handset battery life. It also incorporates greater forward error correction, essential for boosting handheld reception.
     Another significant difference is the data encapsulation technique. The DVB-H stream is an IP datacast at 200 to 500kbps/program, yielding up to 50 programs in an 8MHz channel. This resolution is sufficient for the tiny handset screen. In contrast, standard-definition DVB-T uses MPEG-2 (or MPEG-4) encoding at 4 to 5Mbps/program, yielding up to five ‘standard resolution’ programs per channel.
     DVB-H is not the only mobile TV platform finding favour. Korea and China are the first to embrace terrestrial digital multimedia broadcast (T-DMB), derived from the Eureka 147 digital audio broadcast (DAB) standard. Moreover, the USA’s Qualcomm has developed the forward link only (FLO) technology for the delivery of multimedia content. T-DMB, FLO and DVB-H have each addressed the same handset-related issues — battery life, reception and screen resolution — albeit in different ways.

It starts with delivery
The choice of technology platform is just one element of delivery — and delivery just one consideration — in the riddle that is mobile TV. Commercial imperatives drive all, and are also dependent on such aspects as consumer viewing habits, handset development, content licensing and government regulatory environment. Yet it is with delivery that the whole mobile TV enterprise gets moving, and delivery infrastructure that represents a significant proportion of capital outlay. Consequently, the question of which delivery model proves best — and most cost-effective — is one of high interest.
     Speculation is compounded by the existence of several different industry players. On the one hand, there are the mobile communications carriers. These have an existing subscriber base and perceive mobile TV as a means of extending and differentiating their service. Many have introduced third-generation (3G) mobile TV services based on universal mobile telecommunications service (UMTS) in recent months, while at the same time partnering broadcast-based mobile TV trials.
     It is generally well accepted that UMTS-based mobile TV has limitations. The service is here and available now, but the unicast (one-to-one) nature of UMTS means that as the viewer base grows, mobile TV will not be sustainable on this platform—even as UMTS heads towards ‘3G long term evolution’ (3G LTE) or in-band cellular broadcast techniques such as multimedia broadcast/multicast service (MBMS). Recent reports have suggested that it makes more sense to use the spectrum for wireless data services that can be charged at a higher rate than can television.
     Mobile carriers are therefore turning to broadcast models for mobile TV. Their quest to utilise existing base station sites has led to the ‘cellular overlay’ model for mobile TV, where broadcast infrastructure is deployed at mobile base stations to provide mobile TV coverage in a similar way to a cell-based mobile network.

Coverage adjustments
The broadcast industry approaches mobile TV coverage from the other direction. Conventional free-to-air TV is typically broadcast from centralised high-power transmission sites, supported by supplementary repeater or ‘gap filling’ stations. It is relatively straightforward to deploy a mobile TV service in the same manner; however, there do need to be adjustments to coverage planning.
     Research indicates that the ‘high-power terrestrial broadcast’ model for mobile TV will require more repeater sites than for conventional television. One reason is because, owing to an increase in reflections at ground level, the forward error correction applied to the signal is increased, resulting in a trade-off in signal-strength that needs to be addressed. It has been reported that a receiver at ground level incurs a signal-strength penalty of approximately -12 to -16dB (depending on frequency band) compared with the average rooftop antenna.
   Additionally, consumers have also come to expect their handsets to work indoors and in moving vehicles, each reported to incur another -8 to -12dB (or more) signal impact. The provision of indoor coverage is considered one of the main challenges of mobile TV networks.
     A third infrastructure model, incorporating satellite blanket coverage supported by low-power terrestrial repeaters, has been proposed. The repeaters would be co-located at mobile base stations to supplement urban and provide indoor coverage.
     A unifying element in all three network models is the convergence of industries that have been hitherto quite separate. Mobile carriers will need to embrace broadcast technology and content; broadcasters (or infrastructure/service providers) will need to team up with carriers, who already have the subscriber base. In fact, it seems logical for mobile TV systems to be intrinsically linked with mobile phone services, which can provide a one-to-one back-channel for interactivity. This could even prove to be a driver for consumer take-up.

The band debate
From a technical – and practical – standpoint, the other major delivery option pertains to frequency band, of which several are being considered: VHF (170 to 240MHz), UHF (470 to 860MHz), L Band (variable depending on region, but generally falls somewhere between UHF and S Band) and S Band (2170 to 2200MHz).
     Most popular globally for digital terrestrial television is the UHF band, which has also seen the most mobile TV activity to-date. It has good propagation characteristics and, if deployed using the terrestrial broadcast model, should be capable of providing coverage of a large city using 20 to 50 repeater sites. Qualcomm in the US is using this model for its commercial MediaFLO service (using the FLO platform), but, as other trials have shown, it is also ideal for deploying DVB-H.
     The UHF band is also suitable for networks deployed using the cellular overlay model, since UHF frequencies are just below conventional global standard for mobile communications (GSM) or US ‘Cellular’ code division multiple access (CDMA) frequencies. This type of network is being trialled in many countries across Europe.
     One of the main challenges associated with the UHF band is the limited availability of spectrum in most parts of the world, but especially Europe. Some governments are considering assigning two or three UHF frequencies for DVB-H mobile TV services, which can be deployed as single frequency networks (SFN). Although it makes network configuration more complex, an SFN is a highly efficient use of spectrum, and a network of two or three overlapping SFNs could be a promising option.
     The VHF Band III has even better RF propagation characteristics than UHF. It is not suitable for the cellular overlay model, since the antennas would be too large for existing base stations; but it is an ideal candidate for the terrestrial broadcast model, where city coverage could be achieved with just a handful of repeaters. From a network deployment perspective, VHF would appear to offer the lowest roll-out costs coupled with the best indoor coverage.

Factoring in availability
Korea and China are both deploying commercial T-DMB mobile TV services in VHF Band III, as per DAB services. To-date, there has been no move to deploy DVB-H in VHF Band III; however, since DVB-T services operate in VHF Band III, there seems little reason why DVB-H would not as well. The main obstacle is again one of spectrum availability — of the four considered bands it has the most limited availability in most countries — coupled perhaps with convention.
     The other two bands — L Band and the satellite S Band — are emerging as contenders. Both provide reduced terrestrial propagation and in-building coverage compared with the lower frequency bands, but have the advantage of being more readily available. L Band looks set to support a commercial deployment of DVB-H mobile TV services in the US; S Band is that proposed to support a DVB-H based hybrid satellite/ terrestrial repeater model.
     Irrespective of which frequency band is selected, the signal polarisation is also under examination. The FLO systems being deployed use circular polarisation (CP), which is a combination of vertical (VP) and horizontal (HP) components. It has been speculated that a CP signal may facilitate reception at the mobile handset regardless of orientation. This may, however, be a moot point, since the multiple reflections experienced by HP and VP signals can alter the polarisation, effectively producing a mixture of polarisation components by the time the signal reaches the handset.
     Vertical polarisation is favoured at present by both DVB-H trials and T-DMB deployments. In the latter case, this probably harks back to the DAB convention, since radio signals are often VP to enhance reception by car antennas. Use of VP also enhances isolation from HP television signals at similar frequencies. Most DVB-H trials are using VP, although at least one utilises a HP signal. Ultimately, the selection of polarisation will depend upon the receiver performance when faced with multiple signals from reflections, plus the indoor penetration of the signal.

Which way forward?
The future of mobile TV depends on many factors; but if it is proved that consumers want mobile TV — and are prepared to pay for it — then half the battle is won. The network model will then be determined by how cost-effectively networks can be deployed and the availability of frequencies and licenses. This is likely to differ on a case-by-case basis.
     Utilising existing infrastructure will be a key element. It is not difficult to incorporate mobile TV services into existing broadband terrestrial broadcast systems —particularly if the systems were initially designed to accommodate additional services or channels. The most significant capital outlay would come with the deployment of additional repeater stations.
     If, on the other hand, a mobile TV network is deployed as a cellular overlay, this will involve a significant shift in broadcast infrastructure philosophy. The quest to deploy television antennas at existing mobile base stations (hundreds, perhaps thousands, of sites) will encounter the same challenges as experienced by mobile phone carriers — the demand for low-profile, environmentally friendly antennas; the mandate for low emissions; site-by-site negotiations; and the trade-off between capex and opex. It could also promote utilisation of the higher-frequency L Band and its inherently more compact infrastructure.
     Co-location interference issues also need to be considered when overlaying mobile TV and wireless communications services. With UHF frequencies so close to the GSM 900MHz receive band (usually 890 to 915MHz) and the CDMA 800MHz receive band (usually 824 to 849MHz), careful frequency planning and coordination will be required. Moreover, if the broadcast signal is too high in power, it could cause ‘blocking’ in the sensitive GSM or CDMA receivers, unless RF filtering is deployed. Similar situations arise with both the L Band and S Band frequencies, which are all in the vicinity of high-band GSM, CDMA and UMTS services.
     In addition, it is likely that all mobile TV network topologies will ultimately need to incorporate dedicated wireless indoor solutions (WINS) to provide coverage inside multi-level buildings, large campuses (such as airports and shopping malls) and underground road tunnels and metro systems. These could be integrated with existing broadband WINS systems for mobile wireless communications.

True convergence
Clearly, for mobile TV to succeed as a commercial venture, it will involve many players in the wireless sector: mobile phone carriers, broadcasters, handset manufacturers, content providers, infrastructure groups, base station OEMs, government and licensing bodies. These parties will need to collaborate and form partnerships in order to make mobile TV work — both technically and commercially.
     The quest to maximise the bottom line will ultimately reveal which network model, technology platform and frequency band combine to form the most viable option for a specific country or market. And it will be dependent on which provides the most attractive and accessible model for consumer uptake. Whatever the outcome, it will represent a true convergence of multiple technologies. From this will materialise the true meaning of mobile TV.           

Next Generation Networks

A total business transformation is what’s needed to maximise the benefits from an NGN, say PA Consulting group’s Mark Neild and Alan Young.

The introduction of Next Generation Networks (NGNs) seems to be inevitable, but major new revenue streams are not obvious and business cases based on network operating cost savings alone show long paybacks.  Certainly operators must concentrate hard on achieving  the operating cost savings but the full benefits come from the opportunity to transform the whole business organisation around a single network. Business transformation will further reduce costs, improve the customer experience and lead to new revenue opportunities.
In the last few years there has been  considerable interest both in the press and  the telecommunications industry around NGNs. The technology for these networks is not particularly new. They carry both voice and  data using Internet Protocol (IP), which has  been around for decades.
However, whereas previous networks layered IP on top of existing technologies, NGNs are fundamentally built around IP; as a result  they are considerably cheaper to operate. Furthermore, they separate the processing of information – i.e. the applications from the  network, which in effect becomes a series of big, fat, dumb, pipes.
Arguments in favour of NGNs are interesting. Costs of new equipment have fallen dramatically in the last five years. For established operators, especially, the idea of replacing the current spaghetti of different infrastructures, built to support different services, is an attractive one. The old generation of switches are becoming increasingly expensive and difficult to support, and the NGNs are cheaper to operate.
In addition, the separation of network and intelligence provides more sophistication and flexibility in offering new services, which should lead to new revenues. Such arguments have led the OECD, for example, to conclude that traditional networks will disappear entirely within the next ten years. It really is only a question of time until they need to be replaced.

The question of time
Even with capital costs declining rapidly, the business case for most Next Generation Networks is still, on the surface, less than compelling.
Firstly, most of the operators that we have spoken to believe that there are little or no new revenues from NGNs themselves. Whatever new services are being launched can be launched on existing networks, at least for the next few years. In fact, rather than increasing revenues, NGNs could have the opposite effect. For the incumbent fixed line operators in particular, NGNs will lower one important barrier to market entry by lowering the cost of connection to the network.
Secondly, the operating cost savings that are obvious in theory are less obvious in practice. When operators come to detailed business planning, they find they need to take account of:
• The life left in the current equipment and service contracts
• Implementation and transition costs, which can be significant
• The timing of savings, which can only be realised when all customers have been switched off the legacy networks.
Once all these factors are taken into account, the business case starts to look wobbly. As a result many operators and investors are wondering whether the time to invest in a Next Generation Network really is now.

The Next Generation Telco
The fact is that business plans focused on network savings don’t do a good job of making the case for Next Generation Networks. To get the benefits from such an investment, there is a lot more to do than simply replacing the equipment. NGNs provide the basis for a much wider and more exciting transformation than merely saving some operating costs. They enable operators to be much more agile, faster to market and more responsive to changing customer needs – which we refer to as the Next Generation Telco.
PA Consulting Group (PA) has been working with telecoms operators on the issues of implementing Next Generation Networks for over three years. Our observation is that success comes from a wider transformation than rolling out a new network. It is this transformation that underpins the case for the investment and comes in three steps:
1. Driving through tangible network operating costs savings
2. Wider organisational transformation as the network is being implemented
3. Making the most of leaner service delivery to open new revenue opportunities.
This article describes these steps, how they affect the timing and, drawing from a number of examples, how operators are implementing NGNs.

Step 1: Concentrating on tangible operating costs savings
Although it does not provide the full business case, there are still significant basic cost savings that can be attained through implementing an NGN. Our observation is that, in the first instance, operators need to design a programme that focuses hard on these savings before they move on to a wider transformation.
To explain these savings we need to explain a little more about NGNs. In broad terms NGNs allow traditional circuit-switched voice traffic to be carried over packet switched data networks controlled by a far smaller number of intelligent ‘soft’ switches. These soft switches provide better network quality characteristics (QoS) allowing time-sensitive traffic – such as voice and video – to be split into packets and reassembled at their destination.
With an NGN, the traditional methods of carrying packets, ATM and Frame Relay are replaced with a single converged network infrastructure capable of supporting virtually the entire range of telecommunications services. Typically, we have found that a single rack of NGN equipment provides 13 times as many lines as the equivalent circuit-switched gear and consumes proportionately less electricity.
Furthermore the network can be far better utilised because packet switching removes the need for a dedicated circuit; the same bandwidth can carry around eight times as many calls. These savings grow with each successive network service that is integrated into the converged infrastructure, although in practice the voice network yields by far the largest single saving.
As significant space savings are unlocked, equipment room running costs are reduced.  In addition, as each individual network service is superseded, their supporting infrastructures can be dismantled, maintenance contracts terminated and specialist technical resources consolidated. In some cases it is also possible to reduce the number of Network Management Centres and network support staff.
The true challenge to releasing these costs comes from customer migration. A legacy network cannot be shut until the very last customer has been transitioned onto the NGN. At the same time customers typically don’t take just one service; they may have a complex portfolio that needs to  be migrated across with minimal interruption.
This means that the business case, and hence the timing of a successful programme, needs to be designed around the migration. In theory, there are three broad approaches to migration:
* Upgrade the current infrastructure with soft switches. This is fastest, and costs least, but produces the lowest operating cost savings
* Replace the current infrastructure with new NGN components. This is ideal in theory but difficult to achieve where customers need migrating
* Overlay the NGN onto the existing network replicating the necessary legacy functionality during the migration. This provides the highest overall ROI, but is the most expensive  and complex.
In practice our experience suggests that the optimal approach is to overlay NGN onto the legacy networks, and incorporate aspects of the other approaches to increase its efficiency. Investment in detailed planning at the outset will pay handsome dividends but requires specific analysis to work through each case.
One European incumbent with whom we have recently been working opted for the overlay approach. The learning from this approach was to challenge the need to replicate functionality with rigour. When faced with complex migration, the path of least resistance is to mimic all legacy features on the new network. This led to unnecessary capital expenditure and has delayed moving customers onto potentially more profitable new services.
Step 2: Transforming the organisation
Many overheads for telecoms operators stem from repeating broadly similar processes in different business units. As a result, there is great potential for rationalising processes from the bottom up and removing duplication from the network operations right up to the sales and marketing channels.
However, telecoms operators have traditionally operated as a federation of independent and, sometimes, competing organisations, each with control of its own infrastructure. Consolidation of service provision around a single network has huge implications for these business units as they lose direct control of their own network assets. Typically this leads to a great deal of both passive and active resistance to any such changes.
The NGN implementation provides a very valuable opportunity to refocus the organisation around  the core processes that actually deliver value  to customers. However, due to their complexity,  our view is that re-organisation and process redesign should follow the initial programme  of cost reduction and build on its momentum  and successes.
A further early learning from our work with NGN clients is the need to support a senior sponsor, without allegiance to any of the legacy Business Units, who can evangelise the benefits of the transformation while controlling the flow of funds to ensure that individual parts of the organisation remain properly tied into the programme.
So what does this transformation look like?  As NGNs develop there appears to be a consensus building around the basic operating structure of the business, which is set out in  Figure 1 above.
This is based on a core network layer, where applications sit on top of the network. Operation of the network and customer support facilities is provided as a single set of capabilities using the service platform. Each customer channel retains independent sales and marketing functions. Freed from the distractions of running networks, the idea is that these channels are able to concentrate on maintaining a deep understanding of their customer needs and how best to serve them – which is where the competitive advantage of the new operators will lie.
The channels then translate these needs into a set of requirements that can be satisfied by assembling solutions from the various capabilities provided by the engineers. The degree of commonality between customer requirements across channels is striking and we will explain  how we might capitalise on this in the next section.
In order to achieve the buy-in from senior management that this arrangement will work, it will be necessary to put in place robust governance mechanisms. These replace the direct control they previously exercised over their means  of production.
In many ways these governance arrangements  will closely resemble those put in place for outsourcing arrangements. Typically, such arrangements include a performance mechanism to govern multi-tiered service levels, and will need the governance and contract management skills that outsourced contracts
require.

Step 3: Making the most of leaner service delivery to open new revenue opportunities
As we stated earlier, NGNs do not in themselves provide new revenue streams. This is because they do not service any customer need that cannot already be satisfied by previous generation technology. However, NGNs do make many services a lot cheaper. The most obvious example of this is Voice over IP – not inherently a new customer need but a far cheaper way of providing a service that has been available for 100 years.
These cost differences are enough to create entirely new segments for existing services. Complex and expensive services that were previously the preserve of users in large corporate organisations will become accessible to consumers and small and medium sized businesses.
To some extent this has already started. Who would have thought five years ago that 2Mbps would become the entry level consumer broadband service and that TV would be deliverable over IP? However, NGNs will accelerate this process, providing new opportunities. For example:
• Large corporates are increasingly managing their burgeoning data storage requirements by using remote storage services. This type of service is  now starting to be offered to consumers to store music and pictures online. With low cost, ‘always on’ capacity, there is a great opportunity for far greater use of networked storage, from archived personal information to downloaded content.
• The application hosting market for corporate customers has been growing for some years and cheap bandwidth enables consumers to benefit from renting rather than buying software. Softbank’s BBSoft service, for example, charges consumers a monthly fee from ¥115 (£0.75) for networked access, to applications oriented towards consumer interests – from graphic design to gaming, through studying to home health checks.
The task of meeting and servicing the widest possible range of customer needs is made far simpler by sharing capabilities across market-facing segments: it enables cross fertilisation of service ideas which, in turn, spawn more innovative cross-selling opportunities. Operators often admit that they could make far better use of their existing capabilities but organisational barriers inhibit this.
Research has shown that the majority of successful innovation comes from re-assembling existing components in novel ways rather than pure new technology. Next Generation Telcos should provide the environment for such product innovation. Sharing service development across the organisation will remove some of the barriers to innovation – although this will need to be a  wider transformation.
Although NGNs do not promise major new revenue streams, the benefits go way beyond simple operating cost savings. The associated transformation programme will reduce operational complexity and change the way products and services are delivered. They will share support functions across the sales organisation for each customer segment. At the same time this will be the largest change to telecommunications since the arrival of mobile.
Welcome to the Next Generation Telco.