Next gen networks pose challenge

Telcos have problems with the greatest challenge facing the telecommunications industry

Upgrading to next-generation public networks (NGNs) is easily the greatest challenge confronting the Australian telecoms industry, according to independent research consultancy, BuddeComm.

BuddeComm managing director, Paul Budde said NGNs lay down the roadmap for Australia's digital media future, on which will run a host of services, from social communications, information and entertainment to e-trading, e-health and tele-education.

NGN isn't a single technology but more a business concept underpinned by Internet Protocol-based infrastructure, in place of traditional telephone systems, to deliver high-quality multimedia, explained Budde.

It is also important in facilitating integrated billing and customer relationship management, as well as business models that provide affordable integrated voice, data, and video services, often referred to as triple play or multimedia.

Merging IT and telecoms is seen as essential in generating new revenue streams but it won't be an easy transition, Budde argued, with "many different infrastructure platforms, business processes and unwieldy complexity".

"The demand for new and better content and applications, using the Web, has made NGNs one of the biggest challenges the IT world has ever faced," Budde said.

"Corporate, small and medium enterprise and residential markets are all looking at ways of interacting locally and globally. And this demands a better, more seamless connection between content and the networks delivering that content."

The fact that within three years nearly five million people have signed up to broadband, without much fanfare or advertising, speaks volumes about the level of interest, Budde says. "That's the difference from major developments in the past. People want it." In most demand are applications, such as e-health, tele-education and video entertainment, delivered over broadband. "There is now a slowing down in the growth of the broadband market because people are being starved of these kinds of applications," said Budde. "The lack of good quality infrastructure based on NGN is rapidly creating a bottleneck for our e economy."

The Australian telecom industry is under enormous pressure to build a new fibre network. Telstra has already taken positive steps with the launch earlier this year of its Next IP, which rolls its existing voice, data, IP, and DSL networks into a single network. But this is only one stage in Telstra's longer-term plans to migrate Telstra's voice and broadband access networks into a single IP-based infrastructure, known as the Network Transformation Project. Telstra has indicated the project will take between three and five years and BuddeComm applauds the incumbent's sense of urgency. But due to its large and complicated nature, five to 10 years may be a more realistic timeframe, Budde said.

Len Rust is publisher of The Rust Report

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