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Winning the broadband race

Wireline operators are facing tougher competition in the broadband market. The ability to offer high-performance broadband services could be a crucial factor to securing subscriber loyalty.

Jun 03, 2005

Residential users bent on transforming their homes into digital entertainment centers – or merely looking for ways to cut costs and simplify billing for internet, telephony and TV – are faced with a range of options in today's broadband supermarket, where colorful packages carry labels such as 'triple play,' 'IP telephony' and 'video on demand.'

One thing consumers are not looking for is a label that reads 'provider of dumb pipes.' Yet that is exactly the perception wireline operators risk if they don't spruce up the performance of their networks to enable delivery of mega-bandwidth services, with Quality of Service capabilities.

 

Wireline operators need to strengthen their competitive position in a market where cable companies, property companies, utilities and other players are jockeying for position. Johan Myrvoll, strategic marketing manager at Ericsson, says: "When the cable-TV companies add internet and telephony to their offering, the race towards a broadband supermarket is on – a race where copper-based wireline operators may find themselves at the short end, with today's telephony and internet access offerings."

 

To help operators stay on top of the broadband boom, Ericsson offers a portfolio of solutions based on Public Ethernet, a technology that gives a price-performance ratio superior to any other broadband technology, offers better scalability, and decreases operating costs and total cost of ownership (TCO).

 

With the addition of a new fiber-to-the-node (FTTN) product to its portfolio, Ericsson lets operators install high-capacity fiber closer to the residential user than ever before. Myrvoll explains: "The purpose is to minimize the length of the often copper-based local loop and take fiber as close to the home as possible. At Ericsson, we feel operators must address household demands by offering triple-play bundling of telephony, internet and television."

 

And, he says, households are becoming increasingly demanding. "Internet is becoming a commodity, where promises of higher speed and attractive service bundling can increase churn. Operators who don't jump on the bandwagon risk losing even basic telephony customers or being reduced to suppliers of 'dumb pipes.'"

 

Triple play, on the other hand, offers supreme opportunities to differentiate services and secure customer loyalty. Next-generation TV services enable households to communicate or surf the internet via their TV screens. The imminent arrival of High-Definition TV (HDTV) and IPTV combined with increasingly sophisticated electronic equipment, such as large plasma screens in private homes, is pushing bandwidth requirements to a new standard of 20Mbps, Myrvoll says.

 

Ericsson's FTTN product, developed in partnership with Canadian-based Critical Telecom is aimed at outside deployment scenarios. "Because it is easy to install and deploy rapidly, it is perfectly suited for demand-driven broadband expansion," Myrvoll says. "We now have a complete portfolio that enables operators to win the broadband battle by cost-effectively addressing the triple-play market with innovative, revenue-generating services."

 

The service diversification opportunities, in combination with Ericsson's cost-effective Ethernet-based solutions, allow operators to reach less sophisticated users with dial-up connections and households that lack PCs. Operators need to increase broadband penetration in order to spread their cost base across a larger number of subscribers, yet one reason for the lack of penetration is that many consumers find broadband too expensive. "Internet price differentiation is one way to overcome broadband adoption barriers, while internet-to-TV innovations are another," Myrvoll suggests.

 

At the same time, high-margin services aimed at sophisticated high-tech households require quality-of-service levels far beyond the best-effort level required by the casual web surfer. "Our Ethernet DSL Access redundancy feature ensures telecom-grade uptime," Myrvoll says.

 

Ericsson, one of the first vendors to offer an Ethernet-based broadband access solution, has gained valuable experience over the years. "Ethernet has become the leading access technology standard because of its simplicity in deployment, compatibility with IP and price-to-performance ratio," Myrvoll says. "We made the right choice."

 

He adds that Ericsson's solutions allow operators to minimize existing investment in legacy broadband technologies, such as ATM/SDH, through a fast transition to architecture for an all-IP future.

 

Read more at the High Performance Broadband site.