Careful management needed to change to new telecoms network

Comment: The Irish telecommunications industry is at a crossroads. The networks and business models that have underpinned the industry for decades are about to undergo radical change, writes  John Doherty.

Phone calls, and the revenue they generate, are in decline across the developed world. At the same time, consumers want the benefits that new technologies and converged services can bring. To adapt to this new environment, the industry needs to become more efficient, reduce its costs yet be able to provide new high-bandwidth products and services. Next-generation networks (NGNs) will provide the basis to make this happen.

In a small, open economy such as Ireland's, a vibrant and competitive telecommunications industry is an essential building block in achieving our national ambitions. The continued success of the economy and of the companies operating here will depend on getting world-class telecommunications services that are on a par with other leading countries.

Equally, as telecommunications services become more embedded in our everyday lives, they will have a greater social impact. Communications services have the potential to combat social inclusion and can change the way we interact in society. The internet and mobile communications are clear, positive examples of how new communications systems can have a real effect on society and lifestyles in just a few short years.

NGNs refer to new technologies that are being integrated into, and progressively replacing, the existing telecoms network. They will form the core of the new telecoms environment and they are driving a revolution in the communications industry. This new technology will allow consumers to access their voice, data, video and other new, emerging media applications over a single network.

ComReg believes that NGNs have the potential to transform the cost base of the industry and will potentially enable the delivery of a range of new services to consumers at competitive prices. This has implications right across the industry, and it is essential that it is managed carefully for the benefit of all.

From ComReg's perspective, creating the right regulatory environment is essential for facilitating investment in NGNs. We must strike a balance between encouraging operators to keep prices competitive for consumers in the short term, while also creating the right climate for continued investment by all operators.

It is imperative that policy-makers, businesses and consumers are fully informed about the different choices and decisions facing us. We all need to be aware of the emerging trends, expected benefits and key challenges that the roll-out of NGNs in Ireland will bring.

However, what will NGNs mean in reality? The first thing we can be reasonably sure about is that the deployment of NGNs will speed up the industry-wide trend towards convergence. With voice, video and data services delivered down a single pipe, opportunities for converged and interactive services abound. Imagine watching a live football match over your network connection and then when your friend's favourite team concedes a goal, being able to send an instant message of commiseration that pops up on their TV as they watch.

Secondly, NGNs will, over time, transform the economic model underpinning the telecommunications industry. With fewer network elements, simpler service management and reduced power costs, NGNs will offer significant potential for operational savings. In addition, they will greatly increase opportunities for third-party application and content providers to work with network operators and bring innovative new services to market. NGNs will combine the internet's flexibility and innovation with the security and quality of telecoms services.

Thirdly, and arguably, the most important aspect of NGN deployment is that it will involve significant change. Whether it be its technical delivery, service development or business models, the deployment of NGNs will bring change to the telecommunications sector and that change will be disruptive. It will challenge long-held assumptions, affect competitive dynamics and force the industry to re-think its approach to meeting the consumer needs.

If Ireland is to keep pace with other leading countries, and Irish consumers are to benefit from the kinds of speeds that are now emerging across Europe and elsewhere, then investment in these more efficient and performance-enhancing technologies is now required. ComReg has a responsibility to ensure that regulation does not in any way hinder or distort investment. Equally, however, we also have a responsibility to ensure that this investment does not come at the expense of competition or consumer interests. In our view, it is not a question of either competition or investment, but rather how do we best stimulate both and ensure efficient investment by all network operators is encouraged.

To address this and other challenges, over the coming weeks and months, ComReg will be looking to engage with the industry and other stakeholders to build a collective view of Ireland's NGN vision and what steps will be needed to make that vision a reality. This will require industry players to contribute to the debate by sharing their goals and aspirations.

The Government, too, has a role to play by outlining its policy objectives and targets. ComReg will work closely with the Department of Communications, Marine and Natural Resources to ensure there is swift progress in relation to NGNs.

NGNs will bring change. To manage this change, we as an industry and also as a country need to be collectively prepared to embrace it and adapt accordingly. Only through discussion and a collaborative approach can we deliver this goal. ComReg is ready to take up the challenge. We hope others will do so likewise.

• John Doherty is a commissioner of ComReg