So what are we seeing in the market today? End users are being bombarded with bundled service offerings from multiple service providers in Television, voice, Internet services, and mobile applications from wireless providers. While the deployment of high-speed networks is ongoing, larger broadband pipes to the end user will facilitate the deployment of new services that can be offered over that broadband connection. What are the implications for service providers? Its an all out effort to lock up customer loyalty. From a recent IDC study, we see that once a service bundle is in place, end users are likely not to churn. Almost 66% of those surveyed from an IDC study stated that once a bundle is accepted or adopted by them, there is reluctance to change providers. This creates a huge opportunity to lock-in a customer and offer more profitable services in the future, and increasing end-user satisfaction to further ensure decreased churn, accelerate the adoption of new services, and increase profitability.
Retail Linksys has been the number one manufacturer of networking hardware in North American for the past five years (Netgear is second, DLink is third). For the CY Q1 2004, retail Wireless LAN sales market share: Linksys 52.2%, Netgear 15.3%, D-Link 12.9%. (NPD Techworld Group) For the CY Q1 2004, retail Home Networking total sales market share: Linksys 50.7%, ahead of Netgear s 16.5%, D-Link 13.2%, Belkin 7.3%, Microsoft 5.1%. (NPD Techworld Group) Broadband In May 2003 , Linksys announced the release of its new cable gateway device (Linksys router, cable modem and wireless G access point all in one device). Comcast is the first broadband provider to ship Linksys' gateway device. Customers can receive the gateway by signing up for Comcast's Home Netoworking service, available in most cities The product includes CableHome software (developed by Cable Labs --the industry standard for cable modems) which allows Comcast to provision the line to offer services to consumers--an industry first Linksys is the first company to deploy CableHome and sat on the development committee The broadband industry has been waiting for CableHome so they can sell services like video on demand, music, gaming, etc Small/Medium Enterprises Launched the first worldwide VAR program that targets the SME market in the U.S. HOW IS THIS UNIQUE IN THE INDUSTRY? HOW IS THIS SIGNIFICANT TO LINKSYS? Residential VoIP At the end of August (exact date TBD), Linksys, the consumer division of Cisco Systems, will announce its new VOIP products-an analog telephone adapter and a line of wireless routers that provide consumers with the ability to make phone calls over the Internet. These new VOIP products utilize Cisco R&D and are part of Linksys' strategy to bring new IP-based communications and entertainment services and applications into the home. As more and more homes deploy broadband, Linksys, is expanding its focus, introducing new products in the areas of home entertainment, communications (VOIP) and home monitoring. Linksys is teaming with service providers to help bring VOIP phone services to consumers The first service provider to make the new Linksys VOIP products available is Vonage. Linksys plans to announce similar agreements and partnerships with other service providers. As more service providers adopt VOIP technology, the basis for charging subscribers will transform from the current models, which are based on time and distance, to Internet age models based on bandwidth and services. International HOW ARE WE EXPANDING INTO EMEA? PENDING FROM ROBERT AUCI (email@example.com)
There are three key elements in Cisco’s strategy for helping businesses and service providers solve their issues: Intelligence Systems Policies Enabling intelligence inside the network allows the network to better understand how the applications and services operate and thus make more optimal decisions. Next, integrated systems reduce complexity and costs. Finally, policy mechanisms allow each business to adapt this intelligence to their unique set of requirements. Intelligence enhances the network’s role as a foundation for enabling communication and collaboration. With increased awareness of the applications that operate on the network foundation, the network can become an active participant in applications and services to enable them to work better. One way for the network to be more aware of applications is for the network devices to perform deep packet inspection, looking into the payload as well as the headers to decode XML or SOAP transactions, for instance. Effectively, the network moves “up the stack” from layer 3 to key portions of layers 4, 5, and 6 (transport, session, presentation).
Integrated voice, video, data, mobility is a natural outcome of the social changes and the requirement to link the virtual world of the consumer to the real world - and make the virtual world available to the consumer independent of the location. So it is more of a result of a requirement, but the initial driver. [Some of the earlier examples mentioned on this slide were not 100% applicable (e.g. usage of mobile phone in a car is forbidden by law in most countries in Europe, as is usage of TV while driving).]. The different tools to allow for seamless communication and participation in a virtual world - and at the same time continue to provide linkage to the real world (btw/ just think of how many users still use their mobile phone e.g. in a car only to show that they've got the latest version of some specific mobile phone brand). Reflecting the different requirements by different groups and users again - we reiterate the argument for a customized service. The challenge for the SP is to provide the service cost-effectively - so basically at cost points which are similar to the former way to produce &quot;voice-minutes&quot;. Similar to other industries, the appropriate vehicle to move from &quot;mass production &quot; (of voice minutes) to a highly customized service which follows the individual customers needs and at the same time allows to express identity and create the subscribers universe is the concept of &quot;mass customization&quot; - mass customization (first developed for the textile industry and then quickly adopted by the car and PC industry) allows for near-mass-production costs with still a high level of customization - and is perfectly applicable to multi-play broadband service creation and delivery. It is based on the flexible combination of mass-produced canonical service-iteams. This is the well-know concept of &quot;service bundles&quot; in broadband. An additional benefit of service-bundles (in connection with groups of users) is that one can enable to bundle for certain (identified) groups - which do not require per customer but per group processing - thus allowing to significantly scale the overall scenario. Finally - just to close the loop - leverage of different media services - location independent, peer-grouping, expression of identity are all no longer pure transport based services (&quot;voice minutes; access bandwidth&quot;) - but are far more linked to content and applications - as such the SP is required to transition to content/application based services - in order to follow the subscriber and not be left behind. So, the issue for subscribers is not simply having access to the internet and being able to communicate via traditional telephony or mobile networks—there are plenty of providers that can provide the basic capabilities. The challenge is to allow subscribers to personalize or customize these services so that they meet their specific needs and lifestyles. Subscriber personalization is about providing the means to let consumers choose the services they want regardless of the access means they are using (e.g., cell phone, PDA, home computer, etc.). The intelligent network that supports subscriber personalization needs to be able to recognize the user, determine what services he or she is allowed to use and provide the most efficient connection, across multiple networks if necessary (e.g., mobile to wireline). Ideally, a service provider needs to be able to provide any service anywhere with a single intelligent network that is flexible, scalable and supports a wide variety of services.
Despite their differences, notably in the access arenas, all of these NGN architectural frameworks share a number of commonalities in terms of the features they require across their network, service control, and application layers. Features such as security and QoS in the network layer are critical to ensure the reliable delivery of a service and it’s content. On the service control layer, authentication and mobility are important to ensure the right level of information is delivered to the user regardless of where they are And on the application layer, features such as OSS, billing, and programmability are needed so that applications can not only interact with the network appropriately but so that the provider can effectively and fairly bill for the network resources that the applications use.
1. The Potential of Broadband Digital Home & Next Generation Services May 25, 2006 Ghazi Atallah Service Providers Emerging Markets
2. The digital household Image source: Wall Street Journal Telco Cable Satellite Internet/ Broadband Video Wireless
3. Service Provider Dynamics Broadband Defining New Service Models Broadband Subscriber IPTV VoIP MP3 Internet Gaming VoD TV PSTN Internet Mobile Provider A Provider B Provider C Provider D Subscriber
4. The World Today
5. Coming Together Creates Challenge/Opportunity Convergence of all three galaxies to form a new entity Implications to today’s Telecom SPs
6. Convergence of SP Segments Can No Longer Be Defined by Access Technology Over the Top Wireline Cable Mobile Experience Provider
7. The New Service Provider Offer: “Many Services to Many Screens” At Work, At Home, On The Move Video Conferencing Digital TV / VOD VoIP High-Speed Internet /VPN PDA / Email Text / Instant Messaging Custom Ring Tones / MP3 Player Push-to-Talk / Intercom Video Data Voice
8. Business Needs Are Evolving Beyond Connectivity Requires Highly Available, Secure Managed Services Web Services Collaboration Applications Storage / Computing Convergence <ul><li>1) High Availability: Managed networks can help ensure business continuity in the face of everyday interruptions and unexpected disasters </li></ul><ul><li>2) Service Security: Providing firewalls and intrusion detection systems (and keeping them updated) and using encryption for all sensitive data </li></ul><ul><li>3) Application Awareness: Allows operators to classify applications, apply application-specific QoS policies while metering / billing for services on a converged network </li></ul>IP NGN Infrastructure
9. Consumer Needs Are Evolving Beyond Connectivity: Requires Integrated Voice / Video / Data with Mobility <ul><li>Subscriber Personalization: Actively manage the subscribers identity and adjust the service offering/packaging (i.e., different identity in different worlds) </li></ul><ul><li>Mass Scalability: Leverage mass-customization principles: Service-bundling; subscriber-grouping and per-group processing </li></ul><ul><li>Service Evolution: From transport-based service models (time/distance/volume) to content-based service models </li></ul>Home Office / VPN Internet Access IM / Group Chat IPTV/VoD Online Gaming IP NGN Infrastructure
10. … and consumers are expecting a better entertainment experience… What They Want Where They Want It When They Want It How They Want It Broad choice, personalized and simple On demand, available always Everywhere, follow me Flexible, with no platform or access restrictions
11. Our thoughts on Video <ul><li>Near term, enhanced and improved “television” plus the value delivered by the “bundle” will drive subscriber growth & retention </li></ul><ul><ul><li>Access to more content with more relevancy, more channels, on-demand; </li></ul></ul><ul><ul><li>Improved value delivered by the bundle </li></ul></ul><ul><li>We believe the next step will be to connect the home and the consumer experience </li></ul><ul><ul><li>Content mobility is becoming an important component of consumers’ entertainment experience </li></ul></ul><ul><li>Finally, the experience will become more personal and more individual with customization of both applications & navigation </li></ul>
12. Overall, consumers seem to love the “on-demand” entertainment experience Source: CTAM research conference Overall Satisfaction with Service Provider
13. Bundling “buy more-get more” <ul><li>Caller ID on TV </li></ul><ul><li>Unified Communications on your TV </li></ul><ul><li>Synchronized with cell and PC </li></ul><ul><li>Personalized Content on your TV </li></ul><ul><li>Movielink </li></ul><ul><li>Music on Demand </li></ul><ul><li>My IP TV content services </li></ul><ul><li>Video on-demand </li></ul><ul><li>DVR </li></ul><ul><li>Enhanced navigation </li></ul><ul><li>Integrated search across storage media </li></ul>TV <ul><li>Unified Communications on your PC </li></ul><ul><li>Synchronized with cell and DVR </li></ul><ul><li>Manage service preferences at home or at office </li></ul><ul><li>Manage content on DVR </li></ul><ul><li>My Pictures on my TV </li></ul><ul><li>My Music on my TV </li></ul><ul><li>My Videos on my TV </li></ul>PCs <ul><li>Unified Communications on your cell </li></ul><ul><li>Receive voice messages fwd by PVR </li></ul><ul><li>Synchronized with DVR and PC </li></ul><ul><li>Control what to get on cell phone </li></ul><ul><li>Personalized content on your cell phone </li></ul><ul><li>Your music and photos on your cell phone </li></ul><ul><li>Control recording on DVR </li></ul><ul><li>Receive video clips from your DVR </li></ul><ul><li>Send photos or video clips to DVRs </li></ul>Mobile Phone Voice-based Services Data/web-based Services Video Services on TV
14. Consumers want their devices to work together and share content BROADBAND Entertainment, E-Business, Services MEDIA Pre-Recorded Content Personal Media MOBILE MULTIMEDIA Entertainment, Personal Pictures and Video, Services BROADCAST Services, Entertainment
15. With the anticipated complexity, SP’s are well-positioned to offer value through simplicity Early Adopters Early Majority Innovators / Visionaries Late Majority Laggards <ul><li>Our market research shows consumers (not surprisingly) want video services that are easy to use </li></ul><ul><ul><li>Easy access to broadband baseline service </li></ul></ul><ul><ul><li>Easy access to and use of On Demand services (DVR & VOD) </li></ul></ul><ul><ul><li>Easy to change services </li></ul></ul><ul><ul><li>Easy to pay monthly bill </li></ul></ul>
16. Cisco IP NGN Architecture Achieving a Whole Greater Than the Sum of the Parts GAMING DATA CENTER PRESENCE-BASED TELEPHONY WEB SERVICES MOBILE APPS IP CONTACT CENTER Intelligent Edge Customer Element Multiservice Core Access / Aggregation Framework for User and Application-Based Control (Data, Voice, Video, Mobility) Service Exchange APPLICATION CONVERGENCE SERVICE CONTROL CONVERGENCE NETWORK CONVERGENCE O P E R A T I O N A L L A Y E R Transport INTELLIGENT INFORMATION NETWORK
17. Summary <ul><li>Competition and consumer demands will drive tremendous change and opportunity </li></ul><ul><li>The need to deliver more value will soon drive the need for a more integrated, more connected experience </li></ul><ul><li>Expansion of content and greater integration will lead to new dimensions of both personalization and navigation </li></ul>