Innovative Models for Broadband Businesses through Shared Infrastructures
Breakout Session
Date: April 28, 2011
Round Two: 11:00-12:30 a.m.
Panelists:
|
Paul Bultema (Moderator)
Executive Director, UK & Ireland, Strategy
Accenture |
Kumar Ranjan (Moderator)
Executive Director, Network, APAC Communications & High Tech
Accenture |
|
|
Emerson B. Almeida
Head of Carrier Management
for Canada, Caribbean,
and Latin America
AT&T |
Kashif Haq
Executive Vice President Chief
Information Officer
Bright House Networks |
Dushyant Sukhija
Vice President
Cisco Systems |
The network infrastructure is the backbone of today’s "always on, always connected" world.
As the value chain continues to evolve and as the demand for digital devices grows, the opportunities for companies to develop shared-infrastructure business models are shaping up in both developed and emerging markets.
In this session, executives from three types of businesses—an operator, a network equipment provider, and a cable company—shared their perspectives on why and how infrastructure sharing is taking place, covering these topics:
- Business drivers for infrastructure sharing in various parts of the world
- Open wholesale networks and public/private partnerships
- Regulatory, cost sharing, and pricing implications
- Considerations for various players in the value chain
- Role of governments in driving the new models
|
|
The new model has unfolded in three phases: 2002-2004, 2004-2009-present. In the US and Russia, infrastructure sharing includes innovative wholesale LTE models; in Australia and the UK, it’s taking the form of early-adopter public and private partnerships. Other options include asset ventures, shared ServeCos, vendor-led sharing and outsourcing, managed capacity, and MVNOs.
Paul Bultema, Accenture’s Communications and High Tech practice, argued that infrastructure sharing is required to remain efficient and profitable in the communications industry, given the growth of capital expenditures to support an exponential growth in the consumption of data and video. For those considering infrastructure sharing, he suggested everyone consider five variables:
- Regulations: Governments are creating public-private models for broadband. "Does this mean more regulation in the future?"
- Governance: How does one set up a multi-tiered NetCo/ServCo and SLA’s? "Which business model will work best in your organization?"
- Transition: "How do you transition parallel networks towards single platforms? What happens to legacy PSTN infrastructures?"
- Pricing: To what extent will tiered pricing help operators over time? Will consumers see pricing benefits due to infrastructure sharing?
- Differentiation: "How do you differentiate your services without network control?" Will there be differentiated QOS offerings from shared providers?
Emerson Almeida, head of carrier management for Canada, Caribbean and Latin America, AT&T, reinforced the necessity of infrastructure sharing in international market. For instance, licensing is an issue in Canada and Latin America; by making partners of local carriers, a company can more readily succeed in those markets.
In emerging markets—some with infrastructures to share, some without—pricing (premium pricing, tiered pricing or other pricing structures) and regulatory issues are paramount. According to Dushyvant Sukhija, vice president, Cisco, how to price is an important factor for the operators to consider when sharing infrastructures. There are many models to support infrastructure-sharing agreements and the value chain continues to evolve rapidly. The opportunities for companies to develop shared infrastructure-based business models to drive profits are available in both developed and emerging markets.
For a cable company as a customer of the shared infrastructure, Kashif Haq pointed out that in the U.S. wireless companies want to work with cable companies like Bright House Networks for spectrum sharing while the company is focusing more on wholesale and positioned to meet the demands of its customers.
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