African operators must rethink business models (for VoD, TV, etc.)

Technology & Convergence

As African telecommunications operators start to position themselves to offer voice, video and broadband services as bundled offerings, they need to rethink the way that they provision said services and market them to end-users.  That’s according to Mark Tinka, Head of Engineering at SEACOM, who says that the shift from provisioning these services separately to offering them in a single converged package has a range of commercial and operational implications for operators.

“As we have seen in the rest of the world, African fixed-line operators must prepare themselves to offer triple-play services over a single wire,” says Tinka. “To be successful in this, they will need to shift their business models from being network-oriented to being service-oriented. It is less about the infrastructure they are providing the service on, and more about the services that run on top of it.”

Traditional operators have delivered services discretely, i.e, media houses deliver television, voice carriers deliver telephony and Internet service providers deliver access to the Internet, says Tinka, and in most cases, these are three different companies. The new, “converged” operator will need to provide all these services (voice, video, Internet access, e.t.c) over a single piece of wire to the end user. This has a number of implications for the way that an operator manages the infrastructure underpinning these services, says Tinka. “To deliver all these services through a single wire, operators must ensure that they are able to offer a high quality of service, irrespective of what the customer is doing at a given time,” he adds. “Some services such as voice-over-IP have a relatively limited impact on the network, but are sensitive to latency and packet loss.”

Others such as video streaming demand enormous amounts of bandwidth – a compressed high-definition stream over an IP network needs 12 to 18 Mbps of bandwidth per second.  Then, consider the fact that one person in the home might be watching a stream while recording another, while another person wants to download a big file or make a voice call.  “Legacy copper networks will not be able to cater for this world, and we are going to need to see major investments in fibre to the home. Operators will also need to invest in IP multicast solutions to save on bandwidth used to deliver television over fibre, and put the right management solutions in place to guarantee and manage quality of service.” Tinka says.

With all these services running through one cable, reliability will be of paramount importance as will network efficiency. “Users have grown accustomed to reliability from the individual service providers of old – it’s raining, you pick up your phone, you still get dial tone,” he adds. New operators looking to offer unified services over a single wire will need to offer, at the very least, the same level of reliability as the traditional players did, or better. Certainly not worse. Moreover, these new operators will also need to make substantial investments into the reliability of metro, backhaul and international connectivity to meet the demands of their customers, says Tinka.

Ultimately, the vision should be to make the technology transparent to the end-user so that he or she doesn’t know or need to care that the line is a fibre optic cable running at, say, 100Mbps. Customers should simply know that they are buying, say $40 a month, for unlimited Internet access and national calls as well as 100 channels of television. The details about the infrastructure are not relevant to the end user. They just want their sports and home cooking channels, Facebook and YouTube, and to call the local pizza house for a home delivery.