Despite the vast opportunity presented to telecom carriers by the emergence of new premium video and other bandwidth-intensive digital life services, many service providers are struggling to figure out how to make these services available to all subscribers over infrastructures that are often already stretched to their limits. This is particularly pertinent in mature telecom markets.
For many telcos, the winning play may be to adopt a hybrid access strategy which leverages existing investments in a variety of fixed-line and mobile technology infrastructures, according to Jos Delbar, software product manager at Technicolor’s Connected Home division.
This strategy could present an easier and less costly way of connecting the “last mile” into the subscriber’s home. When telcos adopt hybrid access strategies that intelligently mix and match fixed and mobile access technologies, operators may find a cost effective way to deliver profitable services to more homes for less cost.[subscribe_reminder]
Indeed, on the cost side, researchers at Booze & Company have estimated that carriers could save as much as 30 percent in capital expenditures compared with the cost of deploying a traditional fiber-to-the-home (FTTH) solution, while offering greater speed and capacity to a much wider customer base. But to succeed with a hybrid access strategy, telcos must be willing to undertake a radical reappraisal of network planning and execution.
Premium video services are fast becoming a must-have capability for telecom carriers. OTT live and video on demand (VOD) services will generate around $26 billion this year and $56 billion by 2020, according to Digital TV Research.
This powerful trend was in evidence at the recent MIPCOM 2015 conference in Cannes, which highlighted the ways OTT, subscription video on demand (SVO) and streaming services are transforming the industry’s business models and strategies.
Telcos in mature markets like Europe have a great deal of embedded infrastructure already in place – and they are under the gun to optimize those investments. Since carriers in emerging markets can simply leapfrog generations of fixed broadband infrastructure, mature-market telcos may actually find that they have a more difficult job in providing cost-effective next-generation services.
Nevertheless, there is evidence to suggest that the next few years may represent a particularly good opportunity to harvest latent demand for broadband services in markets like Europe.
As customers increase their demand for broadband and are able to spend more on premium packages like video, the outlook for Europes telecom service industry has changed to stable from negative, according to Moodys Investors Service.
"Increasing demand for broadband, improved consumer spending capacity and a change in focus from price competition to service quality leading to price increases will underpin European telecommunications service providers return to revenue growth in 2016," says Moodys Analyst Carlos Winzer.
“This is why a primary focus for many carriers is extending the coverage of services that already exist to a wider subscriber base,” says Delbar. “With the fixed-line infrastructure that exists all over the world, capacity is not always high enough to deliver existing services.”
The value proposition for hybrid access strategies was in full view at the recent ITU Telecommunications Standardization Sectors (ITU-T) recent Chief Technology Officers’ (CTO) meeting in Budapest. CTOs of information and communication technology companies identified service interoperability in fixed-mobile hybrid environments, trusted information infrastructure and open-source solutions as topics of particular strategic importance to the industry as it migrates toward the 5G era.
The process of integrating assets in a hybrid environment – both on the customer side and at the network level – can prove challenging, however. Delbar points out that telcos must expand their existing customer-premises equipment (CPE) in the subscriber’s home – a DSL gateway, for example – with an LTE modem. There are a number of ways this can be done, depending on the business models that executives want to pursue. For instance, telcos can offer a self-service option and simply offer subscribers a USB dongle to enable the service, or they can deploy more turn-key offerings by providing a set of fixed line and wireless wide-area network gateways that are already integrated.
As telcos strive to stay ahead of broadband subscribers’ expectations, Technicolor stands ready to support their business strategies in a flexible, powerful and cost-effective way.
“From Technicolor’s perspective as a CPE provider, we feel we can play a very important role in supporting the hybrid access technologies from the CPE side in our gateway products,” Delbar said. “There are several hybrid access technologies that exist and we are striving to support all of them in our products because the technology decision is often steered by customers. There is no one-size-fits-all solution.”
A variety of hybrid access technologies can bring multiple streams of traffic from the network to the home, and back to the network again. “A very typical construction would be – in the downstream direction – to offer voice and video services over the existing fixed line infrastructure, but then offload the data traffic over the LTE or the mobile network,” Delbar explains.
“This is because video is often a profitable offering whose quality of service must be assured. With the fixed line you have more guarantees about the bandwidth and the quality of the experience,” he says. “So put those guaranteed services – the ones you are receiving your money for as an operator – on the fixed line.”
Data traffic – which includes web browsing, file sharing, even streaming video from over-the-top suppliers – tends to be more forgiving and can run over the mobile network. “On LTE, you don’t always have the guarantees on the bandwidth at every point in time – that is why it is more suitable for data traffic,” Delbar says. “The subscriber has lower expectations in terms of the performance. With video, if you’re watching your football match, downtime is less tolerable.”
Although hybrid strategies can play a critical role in bringing new services to market, the greater value often is gained by extending an existing solution to all of the carrier’s customers. For example, the first concern for many telcos that offer Internet Protocol television (IPTV) services is to ensure that 100 percent of their subscriber base can subscribe to those existing services. This could be an ideal use case for a hybrid strategy.
Technicolors LTE Booster offering can help telcos cost effectively deliver premium video services to their customers by applying fixed-mobile “bonding” technology. The solution has been designed to support two prevalent bonding technologies that can be used to combine fixed and mobile wide area network (WAN) links: MultiPath Transmission Control Protocol (MPTCP) and Multi-Path Routing (MPR). Both approaches guarantee a high level of service delivery when switching between links.
MPTCP is an extension that allows the TCP protocol to operate over multiple paths simultaneously offering carriers robust redundancy and better resource utilization. “MPTCP makes it possible for TCP layer packets to go either on the fixed line or on the mobile line and then ensure that they will come back together in the end, in a manner transparent for the end user,” Delbar says. Technicolor currently is working on an MPTCP customer trial with Tessares, a Belgium-based third-party development partner.
On the other hand, Technicolors Multi-Path Routing (MPR) solution performs load balancing between fixed-line and mobile gateways at the routing level, based on defined parameters – such as destination and WAN link bandwidth availability. All of this happens transparently to the end user and operating this technology does not require the telco to foresee dedicated infrastructure in the network.
The value proposition surrounding hybrid network strategies is doubly powerful given the embryonic stage of fixed-mobile convergence.
“I am aware of carriers who are already deploying this type of technology in an early stage, but in general, it is still much of a developing technology,” Delbar says. “In 2016 I think you will start to see some early deployments with wide adoption occurring in 2017 and beyond.”
To watch the full webcam interview with Jos Delbar, click here.
 Fast Track to European Digital Highway: Telecom Operators Embrace Hybrid Networks