It's true that there is a lot of money to be made in plain bit-pipe providing. And that new services, such as downloading video files, can fill whatever transmission capacity an operator might offer. As such, one obvious thing for operators to do is to continually expand and upgrade their basic transport networks in a cost-efficient way.

But the question of whether operators need to offer services to be profitable is harder to decide.

Lena Beming, Ericsson's strategic marketing manager, says: "Operators don't have to offer a lot of different services to be profitable, but they definitely have to support quality of service in their networks for a good end user experience."

One way of doing this could be that an operator, by inspecting the data packets sent through the network, can prioritize certain data streams and thereby guarantee a good quality of, for example, IPTV sessions. These control mechanisms will be increasingly important in the future when, for example, the members of a family use their digital home network simultaneously for services with different performance needs. High speed and low latency are not as important for web browsing as they are for playing an online game or watching TV.

Another way of doing it is by providing universal access to content stored at home/work or in the operator network - e.g. the user can securely access his/her content from any device anywhere. This can be done by IMS in combination with Digital Living Network Alliance (DLNA), or by functionality in the network like Multi-Access Service Gateway.

"Operators will offer end users various business models," Beming says. "Those who are willing to pay more - enterprises, for example - will get higher speeds and a guaranteed level of quality. Others might just want a cheap, basic internet connection."

As a result, the business model comprises four steps:

• Plain bit-pipe offering - the basic internet connection,
• Intelligent connectivity supported by the network, such as universal access to content and guaranteed quality of service.
• Add-on connectivity - such as storage, security.
• Content offerings, such as IPTV, music.

Operators need to have the first two, but the remaining two could be handled by other providers.

"But of course, the more services an operator offers in a bundled package, the more reluctant their subscribers will be to leave - as long as the price is competitive," Beming says. "For the end user, convenience is decisive, even more so than the price. And for broadband to become a natural part of daily life, it has to work in a simple way. At that point the different broadband accesses will converge and it will be possible to use a device - fixed or mobile - for any situation.

"The main challenge for the operators is to be able to offer this simplicity in a smooth, hassle-free way."