Convergence Redefines Service Delivery in Telecoms

At the expiration of exclusivity license granted to pioneer operators of Global System for Mobile communications (GSM) in the nation’s telecommunications industry in 2006, Nigerian Communications Commission (NCC) introduced a unified licensing regime that allows operators with the license to provide unrestricted service. Many did not realize the benefit of it to service delivery.
Some observers were expecting that it will in short term address the lingering poor quality of service being deliver by Global System for Mobile communications (GSM) operators. When this did not come to realization, they started questioning the essence of the license and concluded that it was a way the government in power wanted to generate revenue in preparation for 2007 general election.
A Unified License is an authorization that allows the licensee to provide a basket of services under a single license. For example, under a Unified License, the licensee may be able to provide Mobile and Fixed telephony services, National Long Distance Communications Services, International Gateway services, among others, under one license.
It is often times referred to as convergence. The concept of “convergence” is frequently used to describe the development of global information society. The process of convergence starts when previously separate technologies coming closer together as a direct consequence of the advances made in ICT. The most profound changes will probably take place as a result of the process of technological convergence of the previously separate telecommunications, cable, information, publishing and mass media industries.
These industrial sectors are often referred to as ‘converging industries’. Borders that once separate them are now increasingly being blurred. Presently, we have different types of networks for telephony, broadcasting, radio and television and they are regulated differently and usually by separate authorities. National Broadcasting commission regulates Radio and television while Nigerian Communications Commission regulates telecommunications.
Explaining NCC’s proactive stance in moving the industry forward by introducing convergence, Ernest Ndukwe, executive vice chairman of the commission said that the state of maturity of the telecommunications market in Nigeria, vis-à-vis global trends in service and technological development, the Commission was convinced that a sure way to promote universal access to telecommunications services, at this stage of the industry’s development is to evolve a policy framework that recognizes the issues relating to VoIP as an engine for the development of telephony in the country.
“The unified licence regime is helping to extend the frontier for service providers to move service delivery to the next level. One thing that would certainly happen is an increasing converged environment for the delivery of services in the ICT sector. The four factors identified to enable convergence are already here, ready and hot for market. They are the increased digitisation of content, the rise in connectivity, technological improvements and a new generation of technology users,” he said.
Changes in service delivery
Convergence is a revolution rooted in technology and like all revolution so rooted, the convergence revolution poses two types of challenge: technological and societal. Vendors, content owners, software/application providers, telecoms operators, the broadcast industry practitioners must rethink their business processes or cave in under the convergence challenge. Nigeria’s unified regime ushered in by the NCC has already set the tone for the convergence challenge.
For regulators, the challenge is on how best to respond to new technologies redefining traditional services orientation. What should regulation look like in a Converged Services Market? And for operators, it is getting to drive the market ahead of the competition.
Mr. Gbenga Adebayo, chairman, Association of Licensed Telecommunications Operators of Nigeria (Alton) corroborated Ndukwe on the gains of convergence when he said that gone are the days when system, services, facilities and network are build for one type of application, today the available services, the available system allow for an all encompassing services voice, data, video and internet.
All these have started manifesting as men are beginning to be separated from the boys in terms of service delivery. The landscape of telecommunications services that includes voice, video and data is changing. Before now, internet service were provided by Internet Service Providers (ISPs) using dial-up technology that requires a telephony line which delivers about 56 kpbs, radio technology as well as Very Small Aperture Terminal (Vsat) for those who can afford the cost.
In all of these, subscribers are faced with very slow speed of internet basically, as a result of sharp practices of sharing a lot of people on available bandwidth and the technological capacity.
Three years after the introduction of convergence, things have started changing especially in internet service delivery; we are now witnessing an improved service delivery as well as reduction in cost of access. This is made possible by telecommunications operators upgrading their technology to accommodate data service at a higher speed, since they are no longer restricted by license. Code Division Multiple Access (CDMA) operators upgraded from 2000 1x technology to Rev A EV-DO that offers robust service in voice and data. It enables operators deliver wireless broadband internet service at affordable cost compared to what traditional ISPs are offering.
On the other hand, GSM operator upgraded from 2.5G to 3G technology which enables network operators to offer users a wider range of more advanced services while achieving greater network capacity through improved spectral efficiency. Services include wide-area wireless voice telephony, video calls, and broadband wireless data, all in a mobile environment. Additional features also include HSPA data transmission capabilities able to deliver speeds up to 14.4 Mbit/s on the downlink and 5.8 Mbit/s on the uplink.
These developments are taking toll on ISPs whose subscriber base have reduced by over 60 percent thereby pushing them out of business with attendant lost of jobs as they can not compete with telecom operators in providing access as well as cost of internet connectivity.
Opportunities provided
However, some ISPs have started responding to the development by also adopting technology that offers a competitive high speed internet with affordable cost. Against this backdrop, that we are witnessing the rollout of hotspots by some ISPs, which is design to increase their subscriber base.
Hotspot solutions are wireless gateways that come with built-in accounting, authentication and access (AAA). The hotspot connects to a modem which offers broadband connection, and broadcasts a wireless signal that provides Internet connection for up to 100 users at a time from a single location.
ISPs can create an additional revenue source for very little cost, selling casual Internet access to customers who use a wireless Notebook or handheld PDA. The Hotspot offers the ability to list up to 10 sites that users can view without needing to pay, which they could sell off as advertising to other companies for additional revenue.
Presently, Emperium Nigeria, SwiftNetworks, and iWay formerly Mweb are pioneering this initiative and Nigeria CommunicationsWeek investigations revealed that many more ISPs are looking at embracing the initiative. Hotspot solutions are Wifi technology based.
Convergence has also brought some innovations in mobile technology for instance,
Multichoice, the South African company that promotes the DStv satellite service across Nigeria, is now partnering with MTN Nigeria, the country’s leading telecommunications provider, to offer a bouquet of 10 television channels on the MTN network. What this means is that, MTN subscribers who possess the technology compatible mobile phones are able to watch television from their mobile phones anywhere, anytime.
Using the Digital Video Broadcast Handheld technology (DVBH) technology, specialized handsets which are compatible are being deployed by both companies in making mobile television accessible to tens of millions of Nigerians.
The television on our mobile devices now opens up a whole new world of advertising opportunities that will reach out to more and more mobile consumers. Advertising is one key area that will be revolutionized by this new mobile technology convergence and will make mobile TV advertising a very lucrative spot. With Nigeria as the largest telecoms market in Africa, there will be more investments in Nigeria’s mobile TV space in the next couple of years.
Mr. Lanre Ajayi, president, Nigeria Internet Group, explained the development as consequence of convergence, but regretted the inability of traditional ISPs to rise up to the situation by either still providing voice service just as the telecomm companies, however, restricted by the huge capital required to provide it which they are unable to get.
He stressed the need for ISPs to start doing things differently to be able to remain relevant, according to him, with their vast experience in internet service provision; he said they could go into content development. He added that while telcos provide pipe that is access they are technologically positioned to provide, ISPs should concentrate in the provision of content they are well positioned to provide that is also profitable.
He cited Yahoo, Google as example of internet content providers in the world today that are far richer than access providers. Lanre said that Nigeria requires content developers especially as government and organizations are putting their services online.
“ISPs have to be more creative and innovative. This is the time to leverage on their experience to remain in business,” he said.