fixed-mobile convergence study iir mobile billing systems 2004 dr. david watrin, swisscom...

Fixed-Mobile Convergence StudyIIR Mobile Billing Systems 2004

Dr. David Watrin, Swisscom Innovations,

[email protected]

2

David Watrin,IIR Mobile Billing Systems 2004,27-30 September 2004

Agenda

Swisscom presentation

The drivers for Convergence

The Convergence approaches & strategies

Open questions/issues

3


Swisscom Innovations:Sustained innovation as a business rationaleINO’s main mission regarding the Swisscom Group

is to be:

the central source of innovation

the major source of long-term technical strategies

the preferred technical consultant

with a strong business focus.

4


An internal yet independent central unit

Swisscom Innovations

CEO

SwisscomEnterprise Solutions

AG

Group Communications

Group Human Resources

Group Operations & Related Businesses

Group Finance & Controlling

Group Information Systems

SwisscomMobile AG

SwisscomFixnet AG

debitel AGSwisscomSystems

AG

SwisscomIT Services

AG

Strategy & Group Steering

Group Headquarter

Group Companies

5


Swisscom Mobile

Switzerland's leading provider in the Swiss mobile communications market with a 66% market share

3.8 Mio NATEL® customers

25% of Swisscom Mobile's shares are held by the British-based Vodafone Group Plc and the other 75% by Swisscom Ltd.

Swisscom Mobile Customers

Prepaid / post-paid customers (in Mio)

6


Swisscom Fixnet

Within Swisscom Fixnet the different business areas generally act independently:

– Retail Business (sale of network services and products)

– Swisscom Fixnet Wholesale (sale of network achievement)

– Customer Care– Operator Services

(information services)– Payphone Services (public call

boxes)– Cards (Taxcards, Prepaid

Cards)– Bluewin (sale of Internet

services and products)

Swisscom Fixnet in figures

Net turnover 2003 (consolidated)

CHF 5.856 billion

Private customers

2.95 million

Business customers

296'000

ADSL subscribers

389'000

7


Context of the presentation

This presentation shares results of a task at Swisscom Innovations in the context of an exploration project

An official statement from Swisscom CEO, Jens Alder, dating back from August could be found in the press

– Swisscom Fixed and Mobile will be kept separated at least for the next three three years,

– Currently there is no concrete plan for a fusion.– Furthermore a fusion would raise legal implications

(e.g. the 25 % equity of Vodafone) which are not fully assessed(http://www.espace.ch/artikel_9538.html)

8


But, … what are the roots of the non-convergent situation? Non interoperable

technologies, yes but…

In the mid 90’s Telecom Markets are liberalized. Historical Operators must grant their competitors an access to their fixed network.

Mobile Telephony was a new market… and a promising one!

Back Office

Systems & Processes

Front Office

Systems & Processes

Back Office

Systems & Processes

Front Office

Systems & Processes

Fixed Operator

Mobile Operator

9


A decade later, prices are dropping but we still don’t observe a convergent price…

Source: http://www.bakom.ch/imperia/md/content/deutsch/telecomdienste/grundlagenundkonsultation/fernmeldestatistik/datenvombakomerhoben/stainofiziellejuni04.pdf

Development of average fixnet and mobile prices in Switzerland since 1998 (year of market liberalisation)

SFr. 0.00

SFr. 0.50

SFr. 1.00

SFr. 1.50

SFr. 2.00

SFr. 2.50

SFr. 3.00

1998 1999 2000 2001 2002 2003

Fixnet: costs of a 3min call(long distance, peak tariff)

Mobile (to fix): costs of a 3min call(peak tariff, most common type ofsubscription)

10


But new & innovative pricing schemes allowed Fixed-to-Mobile substitution… The O2 case in Germany

– “Homezone” (“Genion”) is a single-phone scheme employed to encourage fixed-to-mobile substitution

– Customer can use mobile phone to place calls within 500 m from the home zone for the same price as landline

– 74% of O2 new adds sign up for the “Homezone”

– ARPU increased to €340/year – 50-100% usage increase within the home zone

11


New technologies have the potential to reinforce this substitutionOnePhone

Dual mode DECT/GSM phone

300 m from the home zone calls were routed via PSTN network, and switched to [Cellnet’s] GSM in other areas

Two separate subscriptions

Two bills

No convenience: need to switch manually between the networks

Size of the handset

High cost of the handset

DISCONTIN

UED

BluePhone Future fixed-mobile convergent

phone (GSM & Bluetooth-DSL) (Variant based on WIFI & BB)

Incoming and outgoing voice and data calls within the “BlueZone” routed via the fixed line

User benefits: – Better in-building quality– Lower call cost – One handset, one number– One bill– Seamless handover

The partnership with Vodafone allows BT to act as an MVNO and avoid Fixed-to-Mobile substitution

12


Fixed Operators are also facing a new competition from Cable Operators In July Cablecom

(Switzerland) launched its Triple Play offer

Free calls during evenings and WE

13


However Fixed operators still have strong arguments and are starting a new move Reliability and broadband capacity are still better than what Mobile Operatorscan offer

SMS over fixed network

Convergent Data Network

– VPN Unifié service, based on FT and Orange IN focused on corporate users

– Virtual network between mobile phones and company’s extensions

– Private numbering plan and tariffs

14


Major operators founded the Fixed Mobile Convergence Alliance (FMCA)

The Alliance aims to accelerate the development of Fixed-Mobile Convergence products and services

The establishment of open standards is a key requirement to allow customers a greater choice of handsets and devices and to enable interworking between vendor equipment

15


The vision for Fixed Mobile Convergence Convergence is the digitized takeover of

communications and information in a network and device agnostic manner producing new services

Network Convergence

Voice and Data Circuit-Packet Service

Convergence

Fixed-Mobile, One Bill Unified Channel,

Bundled Services

Device Convergence

16


Why convergence? The operator point of view Convergence should not be seen at an internal

competition. There is a clear advantage from a group perspective to bring new products to the market

Mobility is an add-on in the competition against cable operators

A tighter and more integrated relationship with the customer reduces churn

Infrastructure costs could be reduced on the long term

DATA VOICE VIDEO Mobility

17


Why convergence? The customer point of view Full mobility allowing access to personal

information and content at anytime and anywhere: e.g. address book, agenda, music, video

Transparent network for the customer: e.g. One number one device for Voice services

One commercial partner: e.g. one bill

18


Convergence: the brave new world!

19


Telecom Operators are presently favoring a network based approach to convergence France Telecom announced an all-IP strategy

based on IP Multimedia Subsystem

Ability to have multiple application servers participate in one session for multiple services to a single endpoint

Access agnostic, roaming, multimedia, …

– wireless, 3G wireless, WiFi, DSL, FTTP, …

Open standards based

– Network, application, enterprise, …

Centralized user profiles

– Shared across multiple applications

Integrated user interface / portal

– Ease of use, access from anywhere

Service brokering between applications

– Ensures interoperability of new converged services between subscribers

Ability to have multiple application servers participate in one session for multiple services to a single endpoint

Access agnostic, roaming, multimedia, …

– wireless, 3G wireless, WiFi, DSL, FTTP, …

Open standards based

– Network, application, enterprise, …

Centralized user profiles

– Shared across multiple applications

Integrated user interface / portal

– Ease of use, access from anywhere

Service brokering between applications

– Ensures interoperability of new converged services between subscribers

3RD PARTY SERVICESLEGACY SERVICES

APPLICATIONLAYER

SESSIONLAYER

END POINT AND GWLAYER

SCP

MULTIMEDIA

TELEPHONY

SERVER

SUPPLMENTAL

MULTIMEDIA

SERVICES

PARLAY,SIP,

HTTP,XML

NETWORK

CAPABILITYGW

NON-TELEPHONYMULTIMEDIA

SERVERS

SIPNon SIP

IADSG &

MEDIAGW

MEDIASERVE

R

IM-SSF

Profile and

Preferences Mgmt

CSCF

SC

PSTN

SERVICE BROKER

HSS

IP Multimedia Subsystem (IMS)IP Multimedia Subsystem (IMS)IP Multimedia Subsystem (IMS)IP Multimedia Subsystem (IMS)

DSL, 802.11, GPRS

20


Such a focus might alter the convergence vision

Switch

Data plane

Signaling planeSubscriber

SS7

Simplified network architecture of PSTN

BTS

BSC MSC

PSTN

Other MSCs

HLR

VLR

EIRAUC

DTAP

MAP

MAPMAP

ISUP

Simplified network architecture of GSM

Services, Content

Access Access

PSTN, ISDN, xDSL, etc. GSM, UMTS, etc.

IP Multimedia Subsystem

21


The OSS/BSS convergence should also be considered in the early phases Experts say that IMS will reach its full maturity

in 5 years

OSS/BSS convergence might be reasonably achieved in 3-4 years

In the manner of the O2 example an early OSS/BSS convergence might offer an interesting alternative

+3-4Y +5Y

OSS/BSS Convergence

Network Convergence

Market preparation; Organisation changes

Convergence with seamless handover

22


The different strategies for an OSS&BSS Convergence

Strategies:

– Anew – Conquer– Integration

– For each scenario: internal convergence – IN/IT or Pre/Postpaid

23


The different strategies for an OSS&BSS Convergence

Internal Convergence Conquer

Mutual Integration

Build Anew

+3-4Y

24


Why an internal convergence? A focus on Billing

Back OfficeSystems & Processes

Front OfficeSystems & Processes

Data /Content

Customer



Data /Content



WirelessVoice

RetailVoice

Data

Customer Customer

Prepaid Prepaid PrepaidPostpaid Postpaid Postpaid

Residentia

l

Residentia

l

Residentia

l

Corpora

te

Corpora

te

Corpora

te

25


Content Billing might justify Pre- and Postpaid convergence The necessity to monitor content expenditure

on the postpaid bill will require a real-time assessment of the balance and real time service control

Such a balance management will be redundant with the functionalities from the prepay system

26


The “build Anew” strategy



Data /Content



Data /Content



WirelessVoice

RetailVoice

Data

Prepaid Prepaid PrepaidPostpaid Postpaid PostpaidImplementation of a new convergent Mediation Component, Rating

Engine,Invoicing Engine, Customer DB, Financial system…

Operators are usually not ready for such a costly approach

27


The “Conquer” Approach

It can be expected that one system is more flexible than the others

Such a solution offers a reduction of the migration effort



Data /Content



Data /Content


WirelessVoice

RetailVoice

Data

Prepaid PrepaidPostpaid Postpaid

Extended Application

Prepaid Postpaid

28


The “mutual integration” strategy: an intermediary Pre- and Postpaid Convergence Active Mediation by

leveraging the existing components offers an interesting approach

However other ones are also foreseable

* Openet’s property

29


The “mutual integration” approach would be based on open interfaces The integration approach goes through a modularization of the

functions and open interfaces

The harmonization of the Customer DB can face “philosophical” issues: MS-ISDN vs Fixed telephone number. The TMF SID could offer solutions

WirelessVoice

RetailVoice

Data

Rating & Discounting

Convergent Billing



AAA SCM BM AAA SCM BM AAA SCM BMOSA Parlay,Jainslee,Web Services,XML, …

OSA Parlay,Jainslee,Web Services,XML, …

30


Convergence will impact the whole business

Customer Experience

Basis of Value Creation

Revenue Models

Service Pricing

Business Models

Service Economics

Service Usability

Convergence

Business Design

Business Performance

31


Convergence will challenge the organization

“One Office” Business Systems

& Processes

Any Service

Customer

32


Some remaining open questions

The ownership of the converged network and its related regulation

The interconnect revenues in regards to the evolution towards an all-IP environment

33


Conclusion

Time and cost of the different scenario have to be assessed

The adequate strategy should be derived from these

Telecom Operators have to tackle the organizational challenges laid by convergence

Telecom Operators need to tackle the next generation services

When should the implementation of Convergence start?

fixed-mobile convergence study iir mobile billing systems 2004 dr. david watrin, swisscom...

Documents

swisscom group

swisscom ceo

press swisscom

agenda swisscom presentation

swisscom mobiles shares

david watrin

mobile telephony

group companies