Contributing Industry Expert		Contributing Analyst
	Pat Calhoun Chief Technology Officer Cisco Systems		David Dunphy Principle Analyst Telecom Strategy Partners

Interview Summary
Pat Calhoun, CTO of Cisco Systems, is interviewed by David Dunphy on the transformations driven by high-speed mobile data and video services on service providers' networks, mobile flat rate adoptions, the driver for the success of Mobile TV applications, and the role that vendors, particularly Cisco Systems, will have to play to differentiate themselves in the market.

Mr. Calhoun is also participating in the IEC Communications Forums at NXTcomm session, "The Next-Generation Mobile Internet - Network Convergence of Internet and Mobile Communications Networks." View the IEC Communications Forums Web site for information on all of the forum's educational programming.

Dunphy: How is the transformation of mobile communications to include more high-speed mobile data and video services impacting service providers' network and network design requirements? Do you foresee a need for L3 intelligence at the cell site and for meshed access networks in the mobile network, and if so, why, how soon, and what kind of evolution in services offered by mobile operators will cost-justify it?

Calhoun: We are already seeing a transition from legacy networks towards IP, but the evolution will differ across radio technologies. There are many motivations (for) providing Layer 3 (IP) all the way to the cell site, and an obvious one is to be able to leverage standardized troubleshooting and management technologies, which are used for the rest of the service providers' network. Another popular reason for using IP down to the cell site is to leverage compression technologies to increase the amount of bandwidth available over the link, which is necessary to support multimedia-rich mobile applications. Finally, the all-IP architecture does provide significant cost savings for the service provider by reducing the number of elements in the network.

In terms of meshed access, we are already seeing this today in Wi-Fi and in licensed spectrum cell sites as an alternative to traditional fixed lines to the cell sites. This is of particular importance in emerging countries where terrestrial assets may not exist, but there can also be a cost-saving of transitioning from a fixed to wireless backhaul.

Dunphy: There have been trends toward flat-rate pricing for fixed-line broadband access and subsidization of mobile devices. Is flat-rate pricing supportable for mobile data without restrictions on downloads? How do you expect utilization patterns for mobile data might change as applications and content designed for it mature, and what impact might this have on the way in which mobile data services are offered?

Calhoun: Flat-rate pricing is already a reality in the U.S., but clearly it is not globally. Apple is doing a very good job at demanding that the service providers require a flat fee for data access. Unlike SMS, which is priced on a per-transaction basis, they recognize that the typical user is unable to easily track the amount of bandwidth a given site may download (e.g., YouTube). Flat-rate pricing is necessary as the Internet transitions to Web 2.0 applications. Combined with predictable pricing for services, this will eliminate the monthly surprise factor and will encourage users to consider their mobile as being their primary device.

Obviously, these media-rich applications are putting stress on available spectrum in the licensed band, so we are now seeing more service providers looking to offload users in hot spots onto unlicensed spectrum (e.g., Wi-Fi). To make this more successful, however, mobile devices need to support multiple air interfaces and provide a simpler connection management user experience.

Dunphy: What will make mobile video downloads and mobile TV a success, and how will it be successfully commercialized given the price sensitivity subscribers typically have demonstrated to date? What innovations have you seen or do you think will be required to make these services a success?

Calhoun: The challenge with these media-rich applications is the stress they place on the available spectrum. Networks that are primarily designed for voice services will be challenged to deliver mobile TV-like services to a large user population. These Web 2.0 applications can be very bandwidth-intensive and therefore put a tax on networks or wireless technologies not designed with these applications in mind. Some of these providers are looking at alternative wireless technologies to help increase their spectrum (e.g., Wi-Fi), or new deployment models of existing technologies (e.g., femtocells). Obviously, for Wi-Fi to become attractive to these service providers, it necessitates an increase in dual-mode mobile devices available on the market, which we are now experiencing.

Dunphy: Bandwidth has always tended toward commoditization over time, and in recent years network infrastructure has been increasingly commoditized and software has played an increasingly greater role in the value that vendors bring to the table. How do you see these trends continuing or changing in the future, and do they provide opportunities for a vendor such as Cisco to differentiate themselves in the market?

Calhoun: Bandwidth has in fact always tended to commoditize over time, and clearly the value is in the applications and data available to the end users. However, what we've experienced is that applications can leverage information made available from the network to significantly increase the user experience, and in some cases, dramatically alter how applications behave. For instance, being able to take advantage of location information, both indoor and outdoor, requires the collaboration of the network.

Cisco's enterprise mobile architecture shifted towards service enablement a couple of years ago, and we are now delivering services tightly coupled with the infrastructure. Further, we have a large number of third-party application vendors that are building on top of these APIs to provide a richer experience. This service layer is also a key component of Cisco's service provider offering, ensuring that our customers can deliver rich applications and services to their customers.