(i) A Next Generation Network (NGN) is essentially an IP based network that enables any category of customers (residential, corporate or wholesale) to receive a wide range of services (voice, video, data etc.) over the same network. IP access is enabled across a wide range of broadband technologies, both wireless (3G, WiFi, WiMax etc.) and wireline (copper DSL, cable, fibre, power lines etc.). In NGN, the service layer is independent of the underlying network, thus a whole range of 3rd party service providers can offer services to customers and the customer is not bound to take all services from only the access provider.
(ii) The primary change in NGN is that a host of different transport networks (e.g. ATM, Frame Relay, X.25, ISDN etc.), each of which has been historically designed to serve a specific service requirement, are replaced by a single IP transport network.
For example, a unified licence operator could use the same transport (IP) network for its fixed voice, mobile telephony, broadband and corporate business services. Thus migration to NGN reduces network and operational complexity resulting in better reliability, better customer provisioning, greater service bundling etc. in addition to lower network procurement, operations and maintenance costs. In addition customers benefit from access to new services, lower prices, better quality of service, choice between service providers without changing networks or customer premises equipment.
(iii) Service providers who do not migrate to NGNs thus face the risk of becoming less competitive as their costs will be higher compared to an operator running a single network and also being unable to commercially exploit new emerging services (IPTV, Messaging, Education, Fixed-Mobile Converged (FMC) Services etc.).
(iv) Migration to NGN could change the operator’s business models completely. On one hand, traditional operators would see much greater efficiencies and lower costs as well as possible access to new services, thus boosting revenues and profitability. On the other hand, service independence could create a completely new category of operators i.e. niche service providers who are able to compete effectively with traditional network operators for minimal investment e.g. a IP telephony service providers being able to provide all features of voice service delivered by a traditional fixed operator by investing primarily in only a server. A possible consequence of such new service-only operators directly serving customers is that traditional network operators could become pure access providers where upon all application services (voice, video, broadband and data etc.) are provided by 3rd party service providers. This could change the business model of the existing operator to the extent that if not managed adroitly, it could prove to be disruptive.
(v) Another implication of NGN migration will be that the interconnection regime also would need to change with traditional non-IP interconnection becoming increasingly more expensive and less relevant. It has been commented upon that service providers would need to upgrade to NGN in step with the industry or they may face the risk of lagging behind. Thus the migration to NGNs offers both a huge opportunity to operators as well as poses some serious risks. In this scenario, clear policy direction and enabling regulation could help the industry both reap the benefits of the migration of NGN as well as reduce their investment and commercial risks.
(vi) Compared to many developed telecom markets, India has lesser baggage of legacy products (e.g. lower tele-density of fixed lines (4.6), limited deployment of ATM, ISDN etc.). Various telecom service providers including incumbent are in the process of finalizing their plans for deployment of NGN. This is likely to be implemented in a phased manner starting with core network and then for access network and service provision. The service providers have to evaluate their business plans keeping in view the general NGN migration scenario.
(vii) At this stage, it is considered necessary to initiate a consultation process on various regulatory issues so that service providers get clarity on these issues while planning the deployment of NGN in their networks. The overall approach should be such that the regulatory issues should not come in the way of deployment of new technologies but at the same time new technologies should not be able to exploit the regulatory advantages so as to create uneven level-playing field among service providers. The main regulatory issues involved are related to Interconnection, QOS, Transition, Emergency Access and Security etc., which may need detailed ex-ante regulation. Regulatory clarity on these issues can help reduce investment risk for operators.
(viii) The licensing and interconnection regime may be required to be expanded to also cover service-only operators so that they are able to provide customer services on an equal footing with traditional network operators. A list of ‘new’ interconnection products will be needed in the all-IP environment for example to include capacity, quality, fixed bit rate, variable bit rate etc. and type of service (voice, video, data etc.) for core network interconnection.
(ix) With facilitating regulation and enabling directions, regulator could help the industry roll out NGNs in rural areas also. Regulatory options to incentivise rural NGN roll-out include possible introduction to Niche NGN operators for rural areas with lighter licensing conditions, access to additional wireless spectrum (e.g. licenced and unlicenced WiMax, UHF bands etc.) to reduce coverage costs, possible access to USO funding for infrastructure and involving other agencies / stakeholders to help drive new services for rural areas (e.g. localised content agencies for television & media, e-Governance agencies etc.). However, each possible option has both benefits as well as risks and need to be evaluated carefully.
(x) The timing of migration to NGN may also be important for different service providers. This interalia would depend upon international developments in this area and also on the plans of other service providers in the country. While some of the regulators in more developed markets are setting up industry interaction bodies to discuss the NGN strategies, it may make more sense only when there is a higher level of common understanding between the various stakeholders. Regulator has a role to play in bringing about awareness about NGN and assisting the industry march in step by suggesting appropriate policy initiatives and enabling regulation.
(ii) The primary change in NGN is that a host of different transport networks (e.g. ATM, Frame Relay, X.25, ISDN etc.), each of which has been historically designed to serve a specific service requirement, are replaced by a single IP transport network.
For example, a unified licence operator could use the same transport (IP) network for its fixed voice, mobile telephony, broadband and corporate business services. Thus migration to NGN reduces network and operational complexity resulting in better reliability, better customer provisioning, greater service bundling etc. in addition to lower network procurement, operations and maintenance costs. In addition customers benefit from access to new services, lower prices, better quality of service, choice between service providers without changing networks or customer premises equipment.
(iii) Service providers who do not migrate to NGNs thus face the risk of becoming less competitive as their costs will be higher compared to an operator running a single network and also being unable to commercially exploit new emerging services (IPTV, Messaging, Education, Fixed-Mobile Converged (FMC) Services etc.).
(iv) Migration to NGN could change the operator’s business models completely. On one hand, traditional operators would see much greater efficiencies and lower costs as well as possible access to new services, thus boosting revenues and profitability. On the other hand, service independence could create a completely new category of operators i.e. niche service providers who are able to compete effectively with traditional network operators for minimal investment e.g. a IP telephony service providers being able to provide all features of voice service delivered by a traditional fixed operator by investing primarily in only a server. A possible consequence of such new service-only operators directly serving customers is that traditional network operators could become pure access providers where upon all application services (voice, video, broadband and data etc.) are provided by 3rd party service providers. This could change the business model of the existing operator to the extent that if not managed adroitly, it could prove to be disruptive.
(v) Another implication of NGN migration will be that the interconnection regime also would need to change with traditional non-IP interconnection becoming increasingly more expensive and less relevant. It has been commented upon that service providers would need to upgrade to NGN in step with the industry or they may face the risk of lagging behind. Thus the migration to NGNs offers both a huge opportunity to operators as well as poses some serious risks. In this scenario, clear policy direction and enabling regulation could help the industry both reap the benefits of the migration of NGN as well as reduce their investment and commercial risks.
(vi) Compared to many developed telecom markets, India has lesser baggage of legacy products (e.g. lower tele-density of fixed lines (4.6), limited deployment of ATM, ISDN etc.). Various telecom service providers including incumbent are in the process of finalizing their plans for deployment of NGN. This is likely to be implemented in a phased manner starting with core network and then for access network and service provision. The service providers have to evaluate their business plans keeping in view the general NGN migration scenario.
(vii) At this stage, it is considered necessary to initiate a consultation process on various regulatory issues so that service providers get clarity on these issues while planning the deployment of NGN in their networks. The overall approach should be such that the regulatory issues should not come in the way of deployment of new technologies but at the same time new technologies should not be able to exploit the regulatory advantages so as to create uneven level-playing field among service providers. The main regulatory issues involved are related to Interconnection, QOS, Transition, Emergency Access and Security etc., which may need detailed ex-ante regulation. Regulatory clarity on these issues can help reduce investment risk for operators.
(viii) The licensing and interconnection regime may be required to be expanded to also cover service-only operators so that they are able to provide customer services on an equal footing with traditional network operators. A list of ‘new’ interconnection products will be needed in the all-IP environment for example to include capacity, quality, fixed bit rate, variable bit rate etc. and type of service (voice, video, data etc.) for core network interconnection.
(ix) With facilitating regulation and enabling directions, regulator could help the industry roll out NGNs in rural areas also. Regulatory options to incentivise rural NGN roll-out include possible introduction to Niche NGN operators for rural areas with lighter licensing conditions, access to additional wireless spectrum (e.g. licenced and unlicenced WiMax, UHF bands etc.) to reduce coverage costs, possible access to USO funding for infrastructure and involving other agencies / stakeholders to help drive new services for rural areas (e.g. localised content agencies for television & media, e-Governance agencies etc.). However, each possible option has both benefits as well as risks and need to be evaluated carefully.
(x) The timing of migration to NGN may also be important for different service providers. This interalia would depend upon international developments in this area and also on the plans of other service providers in the country. While some of the regulators in more developed markets are setting up industry interaction bodies to discuss the NGN strategies, it may make more sense only when there is a higher level of common understanding between the various stakeholders. Regulator has a role to play in bringing about awareness about NGN and assisting the industry march in step by suggesting appropriate policy initiatives and enabling regulation.
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