Brian Levy
Group Technology Officer, Service Strategy and Innovation
British Telecom

For many years, voice services have been the principal profit generators for telecommunications operators around the world. We have seen voice services develop and grow as mobile technologies made voice communication both portable and personal.

In the traditional world, voice services were intrinsic and embedded in both fixed public switched telephone network (PSTN) and mobile phone infrastructures. However, today we are facing a paradigm shift as the ubiquitous high-speed Internet connectivity has enabled new service providers to offer voice as an overlay application (voice over IP [VoIP]) to millions of customers for free or at a low cost.

There are, however, several issues that tend to restrict VoIP take-up as total replacement service for traditional PSTN voice-for instance, many use VoIP services in addition to their existing PSTN and/or mobile usage.

Some of the restrictions that are holding the market back are as follows:

• Lack of service ownership end to end
• Lack of immediacy and mobility - because of PC base
• Lack of quality and reliability

Other issues such as inability to currently support emergency services and legal interception are also of concern, but not key from a market perspective.

This being said, there are millions who use services such as Skype, and many are very happy with the free services provided. Also, some of these restrictions are fading, and traditional voice minutes are decreasing rapidly.

Today we essentially have two global communication infrastructures-the PSTN and the Internet. For the past few years, these massive infrastructures have been pushing into each other like two enormous tectonic plates under the ocean. First the Internet invaded the PSTN with dial IP, where the PSTN became the principal method of connection to the Internet. Soon this dial-up Internet traffic was outstripping traditional PSTN traffic, and all sorts of tactical solutions were being developed to prevent the PSTN from being totally swamped by the longer-hold-time Internet traffic.

Then came broadband Internet, and the whole equation changed. Suddenly, the PSTN dial traffic began to decline and VoIP services emerged as a low-cost alternative to the PSTN, which worked acceptably-most of the time-over the new broadband infrastructure.

As broadband was born, so was the quest for speed. Differentiation was measured by the size of the connection and price, and the equation of the double infinities was born. This is a simple equation-infinitely high bandwidth and infinitely low price. This strategy of constantly increasing broadband bandwidth offers and reducing prices continues across the marketplace.

Wi-Fi's increasing popularity for use in home networking, as well as its adoption by consumer electronics companies, has been phenomenal, as has the continual cost reduction in the sector. Today it is hardly worth considering a traditional broadband modem when a Wi-Fi one costs so little. Wi-Fi fundamentally changes the dimension of broadband.

Traditionally, broadband was a fixed technology with little relevance to mobile networks, but now the Wi-Fi broadband tectonic plate of the Internet has begun to scrape against the growing one of mobile networks across the world.

It all started simply with the idea of hot spots-Wi-Fi connections connected to broadband in coffee shops, airports, hotels, etc.-but soon the combination of broadband and Wi-Fi was challenging the very philosophy of mobile networks themselves. In the United Kingdom, many billions of pounds were spent by mobile operators in acquiring third generation (3G) licenses, but now the idea of low-cost Wi-Fi hot spots with a performance beyond that of 3G data has sent the traditional economics into a tailspin.

You have to be careful when technologies converge, because business cases do not add up linearly and multiplier effects can take place. This is the case with broadband and Wi-Fi. Suppose you have a business case for Wi-Fi modems, let us say with "X" revenue, and a business case for broadband with "Y" revenue. When you combine them, you now have a platform for hot spots with the additional revenue for their use, so it is not X + Y, but rather X + Y + Z (or 1 + 1 = 3). Now you learn the first rules of convergence: simple addition does not apply, and platforms can support many services with sequential incremental revenues.

Once VoIP is added to the mix of broadband and Wi-Fi, the multiplier can get out of hand and a true industry discontinuity can take place.

Let us look at one of the industry's most lucrative areas that will come under challenge-that of mobile international call revenues. Mobile phone tariffs for calls outside the country where they are registered are very high. In the future, a Wi-Fi device communicating over broadband could route the call over low-cost VoIP to a PSTN gateway anywhere in the world. The compelling reduction in cost for the end user and the nontraditional operators entering the market, combined with the Wi-Fi technology expansion, all converge here to indicate the eventual collapse of these premium charges for international services.

In an increasingly complex and mobile world, I believe customers need communication services to be available anywhere and at any time.

Lives are complex, and work time and home time are merged to some extent by the pressures of life. As a result, customers want access to both personal and work services all the time.

In the future, increasing lifestyle pressures will provide an opportunity for a new range of services that address people as individuals, allowing them flexibility and convenience to address their total entertainment, communication, and business needs in a holistic and integrated fashion.

In the future, there will be no mobile or fixed networks-there will only be "mobility networks." Mobility is, after all, what customers want, i.e., the ability to access services wherever they are at the best functionality and price performance. The next two years will see the vast expansion of the number of mobile devices supporting Wi-Fi technology. It has already started, with the Sony PSP® and Nintendo DS® being two early examples. Many of the major mobile phone manufacturers are planning new phones that support Wi-Fi.

Customers will have many reasons for connecting to Wi-Fi at and away from home, and voice will only be one aspect. For example, Wi-Fi technology added to a video MP3 player will enable the device to download music, videos, and other media without connection to a PC. By the simple addition of a camera and an instant messaging client, an MP3 player not only becomes a mobile entertainment device, but also a multimedia communicator.

In the next few years, I believe that we will see the evolution of a whole new range of personal multimedia communication devices using Wi-Fi and expanded instant messaging that supports push-to-talk, push-to-send-a-picture, push-to-send-a-video, push-for-voice-call, and push-for-video-call. "Push-for services" are services initiated by an instant messager where a telephone number is not required and users connect via a presence-enabled public directory.

It is likely that instant messaging addresses between providers will become federated across the world, allowing customers to address a global IP alternative infrastructure to the PSTN.

Traditional voice, both mobile and fixed, will come under increasing pressure from this new infrastructure, but the new IP-the mobility multimedia infrastructure formed essentially from the Internet and Wi-Fi access technology-will also have its problems. The limitations of a free infrastructure formed in this way drive an inability to support service-level agreements (SLAs), guaranteed services, etc., and multimedia-capable devices will exacerbate this problem. Because of this, it is likely that customers will still have traditional fixed and mobile services as a backup to the "free" services available over mobile Internet technology.

What is needed to really drive reliable multimedia communications in the new world will be new network infrastructures, business models, and end-to-end-supported services.

In my view, there are two ways these new high-quality global IP transmission networks of the future will arise. One way is that a new global player builds a dedicated infrastructure to support reliably and with end-to-end service management to enable itself to capture the wider value-added service revenues. One of the most likely examples of this is a Google worldwide Wi-Fi hot spot network evolving. It is very hard to see one player challenging the combined worldwide PSTN and mobile networks of today, but nevertheless, a significant impact could be made and, if successful, could lead others to copy.

The other way is for the traditional telcos to create a worldwide infrastructure by federating their IP networks and building a joint global infrastructure with the quality of service and end-to-end service management required. Personally, I believe that this approach will in the end be the successful model and Google and others will be forced to join in. New standards bodies such as the IPsphere forum are working in this space and in my view will grow to increasing importance in the coming years. BT, of course, is leading the world with the technology and architecture around its 21st-century network and is playing a leading role in the IPsphere Forum discussing the key standards around the global architecture we will need for the future.

So new multimedia converged fixed and mobile IP services are the future, but what will they be like?

I believe that we need to look at a holistic improvement in the service set of today, not just in the addition of video services. This set includes the following:

Entertainment - Fundamental changes are under way in the way we consume broadcasting. The personal video recorder (PVR), with its ability to shift the time we watch programming, began some of the change. Now MP3 players have begun to shift another dimension, that of geography. Podcasting, i.e., the ability to listen to music and video recorded from broadcasting, is likely to be a major new paradigm. Digital memory prices are falling rapidly, and the ability to store large amounts of digital video and audio on small portable devices at reasonable cost is consequently developing at speed. My view is that people will have fixed recorders in the future that will record content from both television and the Internet and then synchronize these at high speed with personal players for later consumption.

Personalization - Today we have ring tones stored in phones. Tomorrow offers personalization at a whole new level. Imagine a phone with millions of ring tones and ring videos, all linked to callers. Companies could personalize their ring experience, individuals could express their personalities, and customers would know before picking up the phone who was calling simply from the tune playing. In addition, the tone the caller hears when they are calling another person can be personalized-for example, a company can program a special ring tone and video to play when customers call. Personalized messaging, with video avatars answering calls for you in your personal way, is also possible.

Video calling - I believe that if companies could make video calling low-cost and highly functional to a mass market and combine this with high-quality wideband sound, they could take the communications paradigm of today to a new level. In my view, video calling in the 3G networks of today is too costly and too low in quality, but the broadband devices and mobility networks of the future could change all this, making video calling a low-cost capability for customers to use when and if they want. For these services to really make video and wideband voice calling relevant, there has to be a large number of capable handsets in the market so you have many people you can call to experience the service.

Directory enablement - New future two-way communications services are likely to be directory-driven. These directories will not be static like the directories of today; they are able to indicate the status of the person you are calling. The integration of personal, national, and company directory access would offer the end user a device with access to the public directories of the world instead of just the small locally stored element of today.

Access to on-line services - The new broadband communications world will open up mobility access to multimedia on-line services. The yellow pages of tomorrow will be an on-line multimedia directory in your pocket with access to millions of companies. Today on-line directories such as Google are textually based, but in the future these will become fully graphical and will be linked to click-to-call buttons and advance payment systems.

In my view, the future of voice is not voice, but a set of converged multimedia applications running across a globally federated, high-quality IP infrastructure.

Future two-way communication devices will be combined with digital entertainment devices and will have vast amounts of local storage and high-quality digital displays.

Wi-Fi and broadband are likely to be the catalyst for the convergence of today's mobile and fixed infrastructures to form the mobility networks of the future.

In just a few years, the MP3 player has changed the way millions of people listen to music. Video MP3 players, new video-enabled communication devices, will cause a paradigm shift, eventually bringing quality multimedia, two-way communication, and entertainment services to the mass mobility market.

New global infrastructures will arise to address this new marketplace; however, the traditional fixed and mobile services of today will not be fully replaced until a new high-speed global IP infrastructure evolves with end-to-end service management. BT's 21st-century network is leading the way as a transformational infrastructure and service model; we are working with our customers and the industry to enable the future and to embrace the evolution of voice into the exciting multimedia services of tomorrow.

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