1. North South University
Assignment on
IP Telephony in 3G Network
By
Md. Shahriar Khaled 062 473 056
Course No: ETE 605
Course Title: IP Telephony
Section: 2
Semester: Spring 2008
Prepared for: Dr. Mashiur Rahman
Date of submission: 16.04.2008
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2. Table of Contents
Page no.
1. Introduction --------------------------------------------------------------- 3
2. Fixed-mobile convergence ----------------------------------------------------- 3
3. Competing with VoIP Service Providers ------------------------------------ 5
4. Impact of 3G Data Services --------------------------------------------------- 5
5. Mobile operators of the future ------------------------------------------------ 6
6. Becoming an Internet Brand -------------------------------------------------- 7
7. Conclusion ----------------------------------------------------------------------- 7
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3. Introduction:
To some, IP telephony (IPT) is the next step in the evolution of voice technologies. In
reality, it is far more than that. IP telephony redefines the role voice plays in the enterprise
business environment. Placing voice on the IP network goes beyond placing phone calls—
although that is important. However, at the desktop level, IPT means new clients, new
applications, and new services.
Companies today are looking for initiatives to help them generate more revenue, make the
revenue they have more profitable, and satisfy their customers in the hopes of building
customer loyalty. The current economic downturn has not changed these objectives.
Rather, it has placed them front and center in the minds of senior management, and IP
telephony, when properly understood and implemented, becomes a key enabler for their
key business initiatives.
Recently, there's been a great deal of industry chatter about fixed-mobile convergence
(FMC). Mobile network operators plan to leverage emerging IP Multimedia Subsystem
(IMS) service platforms to deliver true “one phone, one number” telephony over both fixed
and mobile infrastructure. This means your mobile handset will use 2G/3G mobile
infrastructure when you are outdoors and VoIP over WiFi or Bluetooth when you are at
work or at home.
Mobile operators see IMS and FMC as an opportunity to take additional market share from
traditional fixed line operators. But mobile operators are kidding themselves if they think
they can control the FMC market for very long. Once high speed Internet access becomes
available on mobile phones, a plethora of VoIP services will follow.
Fixed-mobile convergence:
Many mobile operators are interested in the potential for growth through FMC. At this
year's 3GSM World Congress, CEOs from NTT DoCoMo, T-Mobile and Orange spoke on
a keynote panel. A major discussion point was that most telephone calls originate from
inside buildings, where mobile coverage is poorest. As such, residential users are often
forced to keep their fixed-line services for use when they are at home. The same applies in
office buildings, with the added problem that wireless operators haven't been in a position
to offer the Centrex or PBX features that enterprises require. In theory, however, that could
potentially change with the advent of IMS and FMC, at least in theory.
In Japan, NTT DoCoMo is trying to address the coverage problem in major office buildings
with nano-cells and in-building repeaters, but the more widely applicable approach is to
introduce FMC services for business and residential users based on IMS. Fixed-mobile
convergence is attractive to operators because IMS is a logical extension of their existing
networks and the resulting services make the most of operators like NTT DoCoMo's
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4. installed base. In addition, FMC represents an opportunity for the mobile operator to sell
new services directly to enterprises. That could be huge. Today, most mobile services are
sold to consumers, even though the bills are often paid by enterprises. Establishing a direct
relationship with the enterprise opens new service and new revenue possibilities for mobile
operators.
Fixed-mobile convergence relies on broadband Internet access for the “fixed” part and
wireless LANs to enable converged handsets. The timing is right as wireless LANs cover
many enterprises today and home WiFi setups are spreading rapidly. Broadband Internet
access is also available in thousands of public hotspots, through a confusing range of
service offerings — some rather expensive, and others completely free. The first round of
convergence depends upon handsets that support 2G, 3G and WiFi connections on the
same phone. Mobile operators then use an IMS platform to transparently combine regular
mobile service on their 2G or 3G mobile network with VoIP services over WiFi and/or
fixed broadband access. And because the mobile portion of FMC uses the existing mobile
number and existing mobile switching systems, mobile operators have an advantage.
Fig: IP Telephony in 3G network
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5. Competing with VoIP Service Providers:
This advantage is critical because of the dozens of VoIP service providers that have
crowded the market. With FMC, the mobile operators' advantages are significant for not
just their large customer base that relies on familiar mobile functionality, but — even more
importantly — broad coverage going far beyond anything we can imagine for WiFi in the
next ten years. Without broadband Internet access, the VoIP service providers are a
significantly smaller threat to mobile operators' FMC services. As the Yankee Group notes,
“the aim of fixed-mobile convergence is to hit the sweet spot of high convenience and low
cost.”
VoIP vendors will be in a better position to provide their own FMC if WiMAX delivers on
its promise of wireless broadband Internet access, but widespread WiMAX deployments
are likely to take years. Instead, the VoIP competitive threat may be enabled by the mobile
operators' own data services.
Impact of 3G Data Services:
After many delays, 3G networks are now being rolled out at a great rate. These networks
offer all the normal mobile telephony services plus “high speed” data access. 3G operators
may initially limit this data access to their own branded data services — the “walled
garden” approach — or at least price open Internet access significantly higher than access
to their own traditional data services. The mobile market, however, is very competitive, and
there are plenty of consumer and business demands for access to the open Internet. In fact,
flat rate bundles for data access services are already available in some markets.
A potential limit on VoIP over 3G data access might be the limited upstream capability of
the initial 3G services. W-CDMA can deliver up to 384 kbps downstream but only 64 kbps
upstream. On the other hand, 64 kbps is adequate for most VoIP services. There has
already been a public demonstration on the Italian TV program " Le Iene " (" The Hyenas
") — a mix of investigative journalism, reality TV and sensationalism — which showed
Skype running on a smartphone using a UMTS data connection from the 3G operator “3”
and succeeded in placing a SkypeOut call at substantial savings over a normal voice call on
the “3” network.
Today there are dozens of VoIP services are available over the public Internet. Skype is the
most prominent example, because it's grown to be the world's largest VoIP provider (38
million registered users) in less than two years. Skype has already cut a deal with Motorola
to embed the Skype client in Motorola's WiFi-enabled mobile phones, which means Skype
could be cutting into mobile operators' consumer voice revenues — especially roaming
charges — within the next 12 months. European providers in particular are at greater risk
than their U.S. counterparts. European per-minute rates are higher, roaming is more
frequent, and flat-rate bundles of minutes are still a fairly new concept.
Independent VoIP services are a looming threat for 3G mobile operators. Fixed-mobile
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6. convergence will provide them a viable competitive advantage for a while. But as 3G data
services get better, WiFi continues to spread and WiMAX emerges, the VoIP service
providers will begin to compete head-to-head with the mobile operators offering their own
converged services. Will this be significant in the 12 months? No. The next three years?
Perhaps. The next five years? For sure!
Mobile operators of the future:
What's a mobile operator to do? Obviously there's an advantage for mobile operators to roll
out FMC services as quickly as possible to build a strong base and a strong brand while
their competitive advantage survives. Further out, however, there will be some hard
decisions to make.
To help predict the future, it's worth looking at the past. Consider America Online (AOL),
which ten years ago was the fastest-growing ISP. America Online's business consisted of
two distinct segments that were inextricably bound together: its services (including the
portal, chat rooms, email and other apps and content), and its dialup access facilities. First,
as the Internet grew, AOL's customers sought access to content outside the AOL walled
garden. That was easy; AOL opened the walled garden and interconnected with the rest of
the Internet. Then broadband services began to appear. America Online executives were
faced with the burning question: Was AOL going to be a facilities-based Internet access
provider, or was AOL actually a provider of exclusive content, i.e. a brand? Long story
short, AOL decided it was a brand. It sold its dialup access network to someone who could
operate it for the company and focused on its services, now available via any form of
Internet access.
3G operators will be faced with problems similar to those that confronted AOL in the mid
1990s as the Internet grew and then broadband access emerged. The services layer (first
content delivery and then converged telephony) will become independent of the underlying
network (broadband Internet access). Ultimately, a voice connection between two people
on the open Internet will incur no extra charge beyond that for Internet access. Users will
pay for mobile broadband Internet access, and then acquire additional content, products and
services on the open market just as they do today for web-based services: they get
broadband access in their home but acquire most of their content and services from other
brands over the Internet (Google, Yahoo, Amazon, eBay, Vonage, etc.) and not from their
broadband access provider.
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7. Becoming an Internet Brand:
Eventually, mobile operators will need to split their integrated mobile telephony business
into a mobile access business and one or more Internet brands, so they'd be well advised to
start planning for that right now. An FMC service will take them beyond their own
networks. Can this be built into an independent VoIP service that works anywhere? And
can the walled garden content services be built into Internet brands? For example,
Vodafone currently offers “Vodafone live!” content on the Vodafone network. Is there a
way to make some of the exclusive “Vodafone live!” content available over the general
Internet and make it sufficiently compelling so that non-Vodafone customers would take
interest? Operators need to consider their brand development now, so that when the
broadband Internet is truly mobile-accessible, they have built Internet brands in addition to
(and separable from) their telephony brand.
Conclusion:
Today, mobile operators have an opportunity to profit from an aggressive rollout of FMC
services, with their inherent but short-term advantages, to build a global branded VoIP
service that can survive when competing VoIP providers start leveraging mobile broadband
Internet access.
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