Developing NGN Regulatory Ecosystem for Emerging Markets

Satya N. Gupta

Chief Regulatory Advisor

BT Global Services-India & SAARC

 

Presented at ITU-D Regional Development Forum 2010

NGN and Broadband for the Arab Region

(Cairo, Egypt, 13 to 15 December 2010)

 

Agenda

NGN Ecosystem - Introduction

•Regulatory Challenges for NGN

•Existing licensing regime - India 

•NGN in India – SWOT analysis of present framework

•Regulator’s consultation process

•Way forward

•Unified Licensing

•Phased Migration

•Functional Separation – A Wholesale concept

•NGN Regulatory ecosystem for emerging markets

 

Next Generation Networks as the name suggests are the networks of future based on emerging technology of IP which is leading to convergence of networks, services and markets and providing efficiency and flexibility.

 

Rapid technological developments taking place in transmission networks, access networks, switching and customer premises equipment are leading to convergence of networks and providing efficiency and flexibility and making telecom access affordable and introduction of various value added services economical.   

 

NGN are based on the layered approach wherein services provision is separated from the network

infrastructure.

 

These are enabling the operators to increase their depleting ARPU by providing advanced value added services in addition to plain (vanilla) voice. The incumbent operators are going for NGN by replacing their existing networks to compete on the technology front and being able to provide

innovative value added services, cutdown on Opex as well as to make their network future proof Next Generation Network (NGN) is a packet based network able to provide services including Telecommunication Services and able to make use of multiple Broadband, QoS enabled transport technologies in which service related functions are independent from underlying transport-related technologies; It offers unrestricted access by users to different service providers.  It supports generalized mobility which will allow consistent and ubiquitous provision of services to users

 

Definition of Next Generation Network (ITU)

Next Generation Network (NGN) is a packet-based network able to provide services including Telecommunication Services and able to make use of multiple Broadband, QoS-enabled transport technologies in which service-related functions are independent from underlying transport-related technologies;

It offers unrestricted access by users to different service providers.

It supports generalized mobility which will allow consistent and ubiquitous provision of services to users.  

 

 

 

ADVANTAGES OF NGN

•NGN makes use of best of both the worlds (flexibility, efficiency & Innovativeness of IP and QOS, Security, Reliability, Customer-friendly features of proven PSTN

•Advantages for service providers

•Reduced CAPEX due to integrated and efficient IP-based technology (Packetize or Perish)

•Reduced OPEX due to transmission cost saving, less power consumption, less space requirement, less O&M costs

•Ability to offer increased range of services

tMore flexibility increasing market penetration by offering personal service customization and management

•Single network layer for management

tNo need for separate networks for voice, data and video

•Advantages for subscribers

•Reduced call charges

•New innovative services at a fast speed

•Single connection and bill for voice, data, video, mobile (Quad play)

 

What is NGN Ecosystem?

Next Generation Services – Converged (quad-play-VOIP, data, video, mobile)

Next Generation Access – High speed (Broadband) IP based connectivity (ADSL, VDSL, WiMax, . Digital Cable TV, FTTH, PLC)

•Next Generation Transport – Carrier Ethernet, IP-MPLS

•Next Generation Architecture – Service oriented (SOA), Layered (transport, control, application)

•Next Generation Mobile – 3G+(B3G)

•Next Generation Internet – IPv6

•Next Generation Interconnect – Cost of Capacity and Quality based

•Next Generation Licensing – Unified & Class, technology-neutral and service agnostic

•Next Generation Regulation – Converged, differentiated/asymmetric, facilitating, Light-handed

 

Driving forces for NGN

Emerging Markets Motivation

 

• Operational cost savings, new services for increased ARPU

• Predominantly mobile users, less investment in legacy infrastructure, Greenfield Environment

• Low tele-density and Broadband penetration

• Address space limitations,

• Government’s / Regulator’s NGN initiatives

• Roll-out of networks by more new entrants

 

NGN- A Regulatory Opportunity

As per ITU:-

 

The move to NGNs represents an opportunity to establish in advance ground rules for ensuring the continued passage to effective competition and minimise damage during transition”.

 

It is in contrast to the regulation of the legacy network, which came after the networks were actually in place.

 

That is why NGN is different.

. 

 

Salient features of existing regime

• Unified Access (technology-neutral) – Coexistence of Mobile (GSM/ CDMA), Fixed, Voice, Data

• Very low termination rates (< 0.5 cent/min) (same for fixed and mobile)

• Very low carriage charges (0.5-2 cent/min)

• Very low mobile tariff (1 cent/min)

• Very low long distance tariff (2 cent/min)

• Very low  voice ARPU (4 US$/month)

• Very low Broadband charges (5 US$/month)

• Low rural tele-density (< 25%)

• Highest Mobile additions per month- (> 15 million)

• Overcapacity for international bandwidth (17 Tbps/ 500 Gbps)

• Wide spread national backbone (12 lakhs Km)

• Dominance of wireless access (750 million mobiles vis-à-vis 38 million wirelines)

• Large cable TV homes population- (90 million)

 

NGN India – A SWOT Analysis

• Strength/Drivers

• Weaknesses/Challanges

Opportunity/ Benefits

• Threats/ Risks

 

Strength of present licensing framework

• Open unrestricted competition in all segments (including mobile)

• Access service provision unified (broadband, triple play, internet telephony permitted in addition to voice, fixed/ mobile/ WLL)

• General technology-neutrality (technology option left to operators)

• General tariff forbearance (Except leased lines where competition is not enough)

• Broadband policy in place (Govt mission to accelerate broadband)

• Access network dominated by wireless (750 million out of 790)

• More than 15 million mobiles additions per month

• 90 million cable TV homes and 38 million wirelines

• Proactive regulator (initiatives on emerging issues like IP based NGNs,IPv6,UnifiedLicensing,Resale in IPLC, VOIP, MVNO, MNP, CPS through Calling cards, Abolition of ADC,Cost based MTC,CPNP etc.)

 

Weaknesses/Challenges

• Multiple regulatory agencies - licensor (DOT), spectrum management (WPC), technical regulation (TEC), interconnection, tariff & QOS regulation (TRAI), dispute settlement (TDSAT), Security Agencies, Competition Commission.

• Non-unbundling of local loop (no competition for DSL based broadband)

• Unidirectional ,Analog Cable TV infrastructure

• Legacy interconnection regime (Minutes of Usage, MOU based), CPNP (Calling Party Network Pays)

  General Resellers (non-facility based operators) not permitted  

• Value-added service providers (ISPs) not treated as interconnection entity

• Unrestricted VoIP not permitted yet for ISPs

• No Functional Separation Regime

 

Opportunity/ Benefits

• Large unmet demand for telecom services (Rural tele-density< 25%, Broadband penetration - 1%)

• Mobile coverage still 65% (semi-greenfield environment to expand)

• Rationalization of network resulting into simplicity and reduced OPEX

• Network expansion by using future- proof technology (NGN)

• EX-ANTE regulation for NGN to remove uncertainties

• Involvement of industry in various issues fully in a pro-active manner

• Bring Quad play services to rural area (bridge digital divide)

 

Threats/ Risks

• Standards and interoperability issues yet to be settled

• Technical challenges in Emergency access/ Security monitoring

• High CAPEX without guaranteed corresponding increase in ARPU

•Project oriented risks due to huge scope and costs in migration

 

NGN Consultation Process – India

Issues for Consultation

•‘Light-touch’ v/s ‘Tight’ regulation or regulatory withdrawal (hands-off, forbearance)

• Ex-ante v/s Ex-post regulation

• Level-playing field issues – Service-based competition, Network-based competition, Access competition

• Regulatory incentives – standardization, transition time-table, special rate of return, alternate access paths, special concession for deployment in rural areas

• QOS regulation for NGN

• Interconnection regime in NGN context – interconnecting parties, interconnection products, types of interconnection, basis for charging, interconnect exchange

Mandating for emergency access – 100, 101 etc

Security aspects of NGN – Adherence to requirements for Legal Interception and Monitoring (LIM), EncryptionLack of awareness about NGN and need for training/ educational programmes

Lack of enough infrastructure for  considering any service based competition

Need for a single licence to provide all services (data, voice, broadcast through same network)

Need for detailed consultation on interconnection issues and QOS regulation in NGN environment

Need for accelerating the Broadband penetration for access migration

Need for deliberations on technical and standardization issues with special reference to interoperability, emergency access and legal interception and security monitoring

• Need for cross-industry collaboration under the aegis of regulator to deliberate upon time table for NGN migration as well as interconnection issue

s( NGN-eCO)‘Light-touch’ v/s ‘Tight’ regulation or regulatory withdrawal (hands-off, forbearance)

• Ex-ante v/s Ex-post regulation

• Level-playing field issues – Service-based competition, Network-based competition, Access competition

• Regulatory incentives – standardization, transition time-table, special rate of return, alternate access paths, special concession for deployment in rural areas

• QOS regulation for NGN

• Interconnection regime in NGN context – interconnecting parties, interconnection products, types of interconnection, basis for charging, interconnect exchange

• Mandating for emergency access – 100, 101 etc

• Security aspects of NGN – Adherence to requirements for Legal Interception and Monitoring (LIM), Encryption

 

NGN Consultation Process – India

Findings from Public Consultation

• Lack of awareness about NGN and need for training/ educational programmes

• Lack of enough infrastructure for considering any service based competition

• Need for a single licence to provide all services (data, voice, broadcast through same network)

• Need for detailed consultation on interconnection issues and QOS regulation in NGN environment

• Need for accelerating the Broadband penetration for access migration

• Need for accelerating the Broadband penetration for access migration

• Need for deliberations on technical and standardization issues with special reference to interoperability, emergency access and legal

• Need for cross-industry collaboration under the aegis of regulator to deliberate upon time table for NGN migration as well as interconnection issues (NGN-eCO) interception and security monitoring

 

NGN Regulatory Challenges-

(i) Emerging Markets Death of distance and blurring of the traditional boundaries between Access (local) providers and long distance carriers.

(ii) VOIP as a “disruptive technology” putting a challenge for the regulators to perform a balancing act in maintaining level playing field.

(iii) On-going technological developments causing drastic impact on the telecom scenario forcing a re-look at the service based licensing and

geographical area based regulatory regime including Numbering systems.

(iv) Level playing field issue between the

licensed telecom operators and value added service providers.

(v) Need for new interconnect products based on capacity and quality (V&V) in place of those based on distance and duration (miles & minutes).

(vi) Access to emergency services like police control room, fire services, medical help etc.

(PSAP, E 911 (US), 999 (UK), 100 (India))

(vii) Security monitoring like legal interception & monitoring (LIM), wiretap, CLI etc.

 

Unified Licensing Regime - Recommended

Three categories of licenses:

1. Unified License - All Public networks including switched networks, irrespective of media and

technology, capable of offering voice and/or non voice (data services) including internet telephony.

Examples: Unified Access Service, NLDO, ILDO, Broadcast (eg. DTH, FM Radio, TV Broadcast).

2. Class License - All services including satellite services which do not have both way connectivity with Public network.  (The concept of niche operators is being included to promote growth of telecom services in rural/remote/backward areas from tele-density point of view).

 3. Licensing through Authorisation - Services for provision of passive infrastructure and bandwidth services to service providers, Radio Paging, PMRTS and Internet Services. Major operator’s approach towards NGN

 

Major operator’s approach towards NGN

Five-fold Migration Approach

• Create nationwide IP-MPLS backbone network (Fiber-based, Packetisation)

• Create access agnostic Metro Area Networks (MAN) (subscriber access capable of convergent voice, video and data services over DSL, Optical Ethernet and Wireless technologies)

• Implementation of VOIP based Class 4 services (Packetize Trunk Switches)

• Implementation of Class 5 services over packet network (Packetise Access Switches)

• Offer Multimedia/ Triple play services including

VOIP and IPTV to Broadband subscribers

 

NGN Regulatory Ecosystem for Emerging Markets

A converged regulator for ICE (single regulator for Telecom, IT & Broadcasting)

A single technology-neutral, service-agnostic license one license - one network – all services) to facilitate

Convergence and Efficiencies of scale

A Class Licensing Regime (Authorisation

Registration) for Value Added Services to facilitate Innovation

A cost of  capacity based, open access, interconnect regime and light handed regulation to promote

Competition and Investments

Functional Separation to encourage full infrastructure sharing in open manner and to

unlock the potential of existing assets to promote Co-Opetition

 

Thank You

Satya N. Gupta

Satyen.gupta@bt.com

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