Your SlideShare is downloading. ×
The Future of Interconnection, why you will continue to pay for Voice
The Future of Interconnection, why you will continue to pay for Voice
The Future of Interconnection, why you will continue to pay for Voice
The Future of Interconnection, why you will continue to pay for Voice
The Future of Interconnection, why you will continue to pay for Voice
The Future of Interconnection, why you will continue to pay for Voice
The Future of Interconnection, why you will continue to pay for Voice
The Future of Interconnection, why you will continue to pay for Voice
The Future of Interconnection, why you will continue to pay for Voice
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

The Future of Interconnection, why you will continue to pay for Voice

1,655

Published on

Interconnection is the reason why we continue to pay for voice for a long time

Interconnection is the reason why we continue to pay for voice for a long time

Published in: Business, Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
1,655
On Slideshare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
54
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. When will accounting and paying per minute will stop
    The Future of Interconnection
    Rudolf van der Berg
    Logica Management Consulting
    Rudolf.van.der.berg@logica.com
    +31 6 13414512
    http://internetthought.blogspot.com
  • 2. One would expect that because of the rise of data we wouldn’t have to pay for voice anymore, this won’t happen
    With data overtaking voice even on mobile networks, one would expect that soon we don’t pay for voice anymore
    We accept paying by the minute because voice is highly valued and it is a familiar way of billing
    The way voice interconnection is paid for in Europe is the reason we are stuck with paying by the minute
    Only when the current interconnection model is removed will voice be ‘free’
  • 3. With data overtaking voice even on mobile networks, one would expect that soon we don’t pay for voice anymore
    Last week Mary Meeker (Morgan Stanley) reported a 50x growth of mobile data on AT&T since 2006.
    Vincent Dekker (Trouw) reported that on KPN Mobile data traffic now equals voice with a 30x growth since 2006.
    T-Mobile NL indicated the average iPhone user uses 640MB per month (= 1000-4000 minutes)
    In 2012 voice will be 1-5% of mobile traffic in 2015 <0.16%
    If mobile networks are just bits/hertz/sec/km2, why would voice still be the dominant billing method? Let them talk!
  • 4. We accept paying per minute because voice is highly valued and it is a familiar way of billing
    Most consumers think they understand paying by the minute, most marketeers know better
    Voice communication is also the most important form of communication between two people. We value it (too) high
    So weirdly enough, because we value it so high, we allow for it to become a high priced, scarce good
    But this isn’t enough to explain why paying by the minute will not just go away.
    Note: Flat fee is still accounting by the minute!
  • 5. The way voice interconnection in Europe is paid for is the reason we are stuck with paying by the minute
    In Europe for every incoming call the receiving network receives a termination fee. (US ≈ no termination fee)
    This model is called Calling Party Pays.
    The wholesale fee is regulated because of termination monopolies: €0.01 for fixed/VoIP and €0.02 - €0.14 for mobile
    It is the asymmetry between fixed and mobile that generates billions in revenue for all (example on next slide)
    It is these billions in revenue that will keep voice a paid for service for a long time.
  • 6. It is the asymmetry between fixed/VoIP and mobile that generates billions in revenue (Example NL)
    • Everybody makes money on mobile termination
    • 7. A minute to fixed/VoIP retails for €0.02, to mobile for €0.17
    • 8. ISP’s and Carrier Pre Select make 10 million per 1 million mobile subs
    • 9. Why change a deal that even increases ISP’s ARPU by 10%
    Per million mobile subs/per year, based on 20 minutes incoming per mobile sub per month. Avg. MTA
  • 10. Only when the current interconnection model is removed will voice be ‘free’
    Removing Calling Party Pays would leave so called Bill and Keep, or better said, Peering and Transit. ( gotoArsTechnicafor an explanation)
    In this model voice providers can, but aren’t obliged to interconnect and/or pay a fee to each other.
    Providers are obliged to make all numbers reachable, either direct or via a transit provider.
    Because a voice bit is just as easy as a Youtubebit, the prices will converge
    Only then will telcos not care whose voice you’re using as long as you are their customer (too)
  • 11. Bonus: Some regulatory and other initiatives
    Ms. Reding want mobile termination fees down to 2 cents by 2013.
    European Regulators Group has just published a document on the topic. Meeting on November 4. Open for comments
    In Britain there is an initiative known as Terminate the Rate, sponsored by BT and 3
    In India the termination rate in any direction (fixedmobile, mobilefixed) was lowered to 0.3 cents per minute.
    Indians have 400+ minutes of use at an ARPU of €6-8
    But GSMA members fight tooth and nail. Even arranging a meeting with 5 CEO’s and 3 EU commissioners
  • 12. Rudolf van der Berg
    Logica Management Consulting
    Rudolf.van.der.berg@logica.com
    +31 6 13414512
    http://internetthought.blogspot.com

×