1. The transition from voice to data services will negatively impact telecom providers as data services move revenue from telecom networks to external digital service providers. 2. Telecom equipment vendors will also be negatively affected as network operators reduce investments and cannot venture into the diverse application business. 3. Payment gateways and broker systems are needed to apportion revenue between stakeholders to address this issue and ensure network operators receive adequate returns on investments in new technologies.

1. Impact ofTransition from Voice to Data and Multimedia Business in Telecom:
An analysis. http://wp.me/p1ZsI2-23
Author: P. Abraham Paul. Telecom Consultant
Ex: MD & CEO FCOMNET Futuregroups / V.P (TS) SPCNL, SIEMENS ICN / GM &
SMT TBG, BPL Mobile. India / TES (I) DOT India.
e-mail: papaul@hotmail.com Tweet @PA_Paul
Introduction:
The past few years saw much hype due to over-projecting the business potential of 3G
Telecom, Voice over IP and growth of INTERNET dependent customer products, e-
Commerce and other e-businesses. Realization came later that most of these high tech
propositions, though conceptually attractive and forward looking, were going to take time
to develop, huge investment and coordinated efforts of various business & technology
providers and regulators to convert these to marketable and revenue earning products.
3G and other New Generation Networks are great advancement in Information
Communication Technology, but concepts alone cannot be sold to make money and to
sustain as user friendly business. It was difficult to make out a viable business case and
many Telecom and Internet service providers broke down as their original business plans
later turned unsustainable. However, lately the business approach has been more
pragmatic and realistic.
The objective of this analysis is to look how to get over the obvious hurdles and make
transition to ICT and Multimedia possibilities suitable for contemporary and future
business needs so that the presently stagnant e-business would really take off. It is
envisaged that the next one or two years will see a quantum leap in the realization of
these concepts.
In the GSM arena, the SMS has become a powerful communication tool, WiFi and
Wimax bearers have provided more viable end link alternatives dramatically changing
the wireless data world, Data communication and VoIP merged with Internet is becoming
more practical, user friendly, economic and faster, and therefore are gaining universal
acceptance. All these are good news to the end users but the picture is not that rosy for
the service providers.
1. Consequence of technology advancement:.
The advancement in technology and convergence of Voice and Data will adversely
impact the Telecom & ISP providers and vendors business because the major shift of
Voice based usage to Internet based and other high speed Data and multi-media services

2. will inevitably take away the business from Telecom Service providers to external digital,
multimedia and various mobile commerce and mobile management, service providers
and along with it a major chunk of the revenue. Please see my blog: 'It is suicidal for
Telcos to allow Banking Industry to hijack 'Pay by Phone' Value added S ervices'.
http://wp.me/p1ZsI2-d
The reasons are:
i) Non-viability of Network Operators/ISPs taking the role of discrete Application
Providers.
The GPRS / UMTS / WCDMA/ and other modern high speed digital access are bearers
which provide suitable network and pipes for access and WAP is only an application
protocol.
The Telecom service provider and ISPs are mainly access providers and cannot become
ices, which are going to be a miniscule of the whole business
potential. Why because, the major data related activities will be in the extremely large
base of clients in the PDN, widely distributed in the limitless IP world and their
requirements will be highly diverse and dynamic that cannot be met by Telecom service
providers.
The vast amount of individual and standalone e-business units and service related
systems and applications will be spread beyond the boundaries of Network operators
licensed service areas, and therefore will have to be taken care of by external Service
Providers and Business units in the PDN.
ii) Major portion of revenue moves from Network Operators to external Service
Providers and e-Business units in PDN.
Impact of Voice - Data convergence and transition of major part of usage from Voice to
Data service will have great impact on the of Telecom business models in terms of
investment and revenue realization. The Network Operators have no control on tariffing,
rating, charging and billing of "external client" based service and usages. At the most
they can only charge their subscribers for the 'access' by measures of quantity and not for
real value transaction. The value of the transaction can be determined only at its end
Service provider/vendor level and therefore, the revenue realization also rests with them
and they will become the real beneficiaries of the advancement of technology.
It means that, as the scenario changes, a good part of end user revenue will move from
PSTN/PLMN Network Operators to various Content Providers/Service Providers/e-
Business units in the PDN, that spread far beyond the licensed area of current individual
Telecom network operators.

3. iii) The network operators will eventually lose exclusive ownership of their
customers. With opening out of Private Long Distance carriers and convergence of
Voice and Data and with predominance of Data service, ownership of end user is no more
remain stuck with any single Network Operator.
As the e-Services and e-Business takes of, the Telecom Network Operators and ISPs will
further lose their monopoly in holding on to exclusive ownership of their customers in
terms of the revenue generated from them.
The end user at their own will and pleasure will have option to choose and use different
Network Operators/Service Providers who would provide them efficient, competitive and
quality service and eventually will have direct dealing with the e/business Providers for
the services and with it these service related revenue also goes to them.
iv. Various IP based products of communication currently in vogue and those to come in
the future communication will highly disrupt plain old telecom business as a whole as
most of these systems, products and services bye-pass telecom systems and networks.
2. Role of Telecom equipment vendors:
Operators unable to get adequate return on their high-tech investments.
Telecom Vendors are already affected due to Network O
in high tech solutions, products and services. The advent of telecom evolution is great
business for vendors if only their customers (the Telecom network operators/service
providers) are willing to invest for inducting these technologies in their networks. Due to
reasons mentioned earlier, the trend is not positive and hence affects negatively the
business of Telecom Network system vendors.
b) Telecom Vendors cannot get into Application Business in the PDN.
Major telecom vendors cannot get into the business of Application and Business support
system sales. The vast amount of Application and Business support systems in the
limitless area of PDN are going to be the most revenue earning part. These are highly
diverse, dynamic and widely distributed across the whole IP world. Such needs of infinite
number of small and standalone and individually tailored systems cannot be customized,
sold and maintained by major telecom vendors. Hence it is not foreseen for any major
vendors to venture in to this business and majority of the service providers/e-business
units do not need and also cannot afford the major vendor systems.
So the business of the vendors is limited to selling of generic and very specific
Application systems for the Network operators which is going to be only a small fraction
of the market as the real business value lie in the external IP world. It is more likely that
the Network operators also will prefer to hand over the Application business to external
Service providers.

4. 3. Payment Gateways in PDN for revenue appropriation:
Special methods are needed to handle Micro-payments involved in e-business. See
article in http://wp.me/p1ZsI2-d /
The end users are real beneficiaries from all these, but such major shift in Telecom
business will have negative impact, for the Network Operators. Such as above said being
the situation of business, Network operators cannot dare to indulge in high investment
that is needed for the high- -
business needs with no means of adequate return on their investment.
Therefore, Network Operators /ISPs therefore, need to find strategies and methods to get
adequate share of the revenue collected by e-business units that use their customers, '
their network and resources.
The e-business and e-services related to 2.5G and 3G and Data services over Internet
involve 'High Volume' of 'Low Value' payments and these cannot be done by direct
payments or handled economically by the banks, regular credit card companies etc. Also
these payments can neither be handled by the Network operators/ISPs nor by the Service
provider/e-business units as the value of each transaction is known only to the e-
Business/Service provider who finally sells or provide the service.
This is the most critical issue and the high tech Telecom and IP related e-Business cannot
take of and the Network Operators/ISPs cannot hold on with sustainable business plans
until it is addressed and resolved.
Micro-payment Gateways in PDN is one such idea to get back part of the revenue
generated from e-business based on data services. This need coordinated efforts by all
stakeholders and the regulators.
4. Concept of Payment Brokers middle way systems.
To be in line with technology advancements, the network operators have no choice but to
induct the new technology systems related to telephony and non-telephony value added
systems in their networks and find means and ways to ensure sensibly viable business
propositions.
As mentioned earlier, the data related services gaining predominance, and the revenue
potential moves from Network Operators/ISPs to Service Providers and e-Business units,
the Network operators/ISPs have to look for methods to grab their share of revenue
generated in the PDN to survive. Here is the emphasis of the Payment Broker systems,
which can manage the accounting of payments, apportioning of it and sharing the revenue
generated between the stakeholders.

5. The payment broker system cannot be managed by individual Network operators/ISPs as
the Service Providers and e-business units are common platforms shared by customers of
many different Networks/ ISPs.
Money through Mobile (MTM) a system that supports all sorts of money transaction by
phone users transparent to Banks and banking systems setup and owned by a consortium
of service providers is an option for telecom service providers to look into.
Please see article on Universal Money Management by phone http://wp.me/p1ZsI2-4g
5. The whole story in nut shell is:
a) The Network operators can only play the role of access providers and not major
application providers. It is folly to attempt provision of multifarious application services
b) Majority of the revenue generated is going to be in the PDN in the infinite IP
world. The Network operators cannot have control on the revenue generated and do not
get the rightful share of this revenue as a decent return on their higher investment in
providing access to data related services. So the network operators will be reluctant to
invest on high tech systems for opening out fast access to external IP world.
c) There will be no exclusive ownership of Customers considering the revenue point
revenue generated from them directly goes to the coffers of large number of external
agencies that provide e-business and e-service.
d)
are unwilling to do major investment in high tech unless they are assured of adequate
revenue. The telecom vendors cannot venture to get into the large-scale application and e-
commerce support system business in the vast IP world.
e) It shall be possible to address this by introducing concept of Payment Gateways in
PDN for apportioning the revenue. Micro-payment gateways can take care of the high
volume low value transactions that happen in the PDN. These need special methodology
and coordinated efforts of all concerned.
d) Other solution is to have third party systems owned by consortium of Telecom
Network Operators /Service providers for non - telephony related value added services
like un-banked universal money management using phones, Charging of road toll and
vehicle parking charges etc.
Conclusion: Most of the advance technology systems are now the monopoly of Network
Operators/ ISPs and System vendors. It is necessary to take these out into the user
premises by melding the technology with user intensive systems and applications. For the
Telecom service providers, the voice call revenue is dwindling due to transition to data

6. oriented business and competition as well as saturation of usage and they need to forge
into more and more broadband products business to survive.
To realize all these effectively, it is necessary for the Network operators/ISPs and
regulatory bodies to standardize the e-business related charging, billing and payment
procedures. Common Payment broker systems are needed to take care of adequate
revenue share to network Providers / ISPs as to compensate the high investment needed
to induct high tech and provide enough pipes for their customers to access the Service
providers and e-business units.
Charging gateways are just other network elements sitting in PDN. Interestingly the
Payment broker systems can be located any where in the PDN and can provide service to
large number of Network operators /ISPs and the e-business units and application service
providers in PDN. The Payment Broker systems shall be a common platform Service
Provider system in the PDN and not to be tried by Network Operators.
This could be the ideal philosophy to adopt in every country, in order to avoid stagnation
in the e-business growth and full exploitation of benefits and advantages of modern
technology. With right perception and direction, these disconnects in concepts can be
rectified and the e-Business will see ample growth in the coming years. It shall be
possible to achieve quick overall Telecom growth, with benefits for all, the Network
Operators/ISPs, Business owners, the Service providers, the Telecom Vendors and the
Consumers as end users.
e-mail: papaul@hotmail.com Tweet @PA_Paul
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