Contributing Industry Expert		Contributing Analyst
	Roberto Saracco Head, Future Center and Technical Communications Telecom Italia		Lorenza Brescia Principal Analyst, Managing Partner Telecom Strategy Partners

Brescia: Which are the potentially disruptive technological innovations that will affect the evolution of telecommunications in the next 10 years?

Saracco: Technology will continue enabling more effective communications on two aspects: pervasiveness and bandwidth. However the biggest drive to telecommunications evolution will be brought forward by the increased and varied usage of connectivity that can be clustered under the labels "always on," "everything connected," "everything becomes a service."

Pervasiveness will be fostered by the deployment of fibers that in turn will provide an economically sustainable radio coverage through smaller and smaller cells. This will be complemented by new radio technologies supporting micro and picocells, where the real challenge to the operators and devices manufacturers alike will be to ensure seamless handover from one cell type to another. The space will be covered both horizontally (as it is today with the cellular network) and vertically through a variety of wireless networks starting from personal-area networks up to satellite coverage of very large areas.

Bandwidth will keep increasing both in the large pipes and at the termination points, exceeding 100 Mbps both downstream and upstream, through fixed and wireless connectivity. New cooperative architectures will allow this kind of bandwidth also in a mobile environment, with terminal devices playing a significant role in ensuring the fruition and perception of high bandwidth. Similarly, a crucial role will be played by applications whose mashing ups and distribution will take advantage and provide high bandwidth perception to the end user.

Always on will be taken for granted both by users and by application providers. This will create a host of new applications changing the way of life.

Everything will be connected; any object and any service will be a network element and part of the Web. That will enable new biz relationship, a completely new concept of customer care, and a variety of biz. Mash-ups will occur both at the level of information, application, and actors. This will likely be the most significant change perceived by people in the next decade, bigger than the one brought forward by the Web. At the same time the number of network and applications users will skyrocket from the billions of people to the thousands of billions of objects. That will require significant re-engineering of biz process and the creation of new biz models.

As any object is potentially becoming a network element and always-on connectivity is a given, new services can be created on any object and the value of an object will progressively shift from its substance to the services wrapped on it.

Brescia: How do you see the role of the telecommunications service provider change over the next five years, and what challenge do you see being presented by potential new players such as Google or Microsoft?

Saracco: Telcos will have to grow from their network and customer base to become applications and biz enabler beyond pure communications. The pervasiveness of the network brings in a host of information that can be used to generate high value understanding of the world. This understanding is based on the millions of people and objects connected to the network, to the information and to the applications. Google and to a lesser extent Microsoft are big players exactly because they are in the business of connecting people to applications and information. Telcos can add to this equation with the knowledge of network connectivity (that includes location and multichannel connectivity). Playing in this arena requires adding new biz models and providing service and enablers to an ecosystem of loosely coupled biz, enterprises, and communities. It is probably one of the big challenges, and opportunities, awaiting telcos in the next decade.

Additionally, what differentiates a telco from Google and the likes is the concept of "client." For a telco, by far, the client and the end user are one and the same, whilst Google is the intermediator between its clients and its users. Telcos are committed to help their customers to grow in their capacity to use new services.

Brescia: The trend has been toward flat-rate pricing for fixed-line services and for subsidization of mobile devices. Do you foresee flat-rate services in the future for mobile data, and how will the opportunities and requirements for monetizing services change in the future?

Saracco: As market segments and services mature, the shift towards all you can eat, flat rate, is inevitable, independently of the type of access and network infrastructure. However, new services and new features will emerge, and they will be provided on a pay per use as some services today. Certain types of connectivity will also be provided on a pay per use but not necessarily the one paying is the one requesting the connectivity. Indirect biz models will take the upper hand on all those services where the all you can eat is applied and also for some others. The market structure will continue to grow in complexity and the classic "you ask for it, you pay for it" will be complemented by many other models. As many more products will be sold as services, we will see embedded connectivity whose cost is hidden to the end user. Connectivity cost may become part of the insurance premium, of the medical pills, of the gym fee, and so on, as today the cost of Internet connectivity has become part of the room rate in many hotels.

Operators will have to learn to play in this much more complex environment.

Brescia: It seems that the trend has been for network infrastructure to become increasingly commoditized, particularly in terms of hardware. What will provide meaningful differentiation among service providers for Telecom Italia?

Saracco: Telecom Italia is committed to evolve its network infrastructure to take full advantage of new technologies, like optical fiber, optical/electronics converters in appliances, wireless in micro cells. At the same time Telecom Italia is investing to provide the platforms allowing third parties to exploit that vastly more performant infrastructure. Service providers will be able to deliver a host of services in an open environment where any service can piggyback on any other. Telecom Italia will provide the essential, and biz-inducive, applications to embed security, information neutrality, location, community clustering, profiling into any third-party service.

Additionally third parties may use management, configuration, billing, resource reservation facilities provided by Telecom Italia.

Telcos will need to move from a concept of increased bandwidth to the one of "appropriate" bandwidth: a guaranteed bandwidth specific for any given service that can be negotiated by the user to satisfy his requirements at that particular time.

Brescia: What advantages has Telecom Italia been most able to exploit due to having both fixed and mobile services, from a network perspective and from a marketing perspective?

Saracco: The wireline and wireless market share a significant number of resources and a unified management coupled with a single investment policy can significantly decrease cost, both in terms of CAPEX and OPEX.

From the point of view of services it is clear that the end users would like a complete network and access transparency. But they also would like to have this transparency across any infrastructure independently of the specific ownership. So in this area any advantage deriving from the ownership of a wireless and wireline infrastructure is not sufficient to meet the expectation of the end user. Telecom Italia, along with all other operators, has to go beyond its ownership to set up an open and transparent network and service delivery. The evolution in its Open Access Network and its commitment to Open Platform is an important step in this direction.

The terminal is becoming more and more important in the users' decisions and perception of services. Telecoms need to work to make services really independent of the terminal, and new technologies can enable this goal. Femtocells, as an example, may enable integrated services on a mobile terminal at the cost of a landline connection.

Contributing Industry Expert
Roberto Saracco, Head, Future Center and Technical Communications, Telecom Italia

Dr. Saracco is leading the area responsible for future trends and scientific communications at Telecom Italia. He is a senior member of the IEEE and vice president for the Sister Societies Relation. Dr. Saracco has been involved in many standardization efforts and is leading a group of foresight centers in the European Community Project FISTERA to identify technology trajectories in the next 15 years. Dr. Saracco graduated in computer science and has a degree in mathematics and a doctorate in elementary particle physics.

Contributing Analyst
Lorenza Brescia, Principal Analyst, Managing Partner, Telecom Strategy Partners

Ms. Brescia provides research and consulting to vendors and operators, is the prime contact regarding converged transport solutions and Ethernet services, and contributes to competitive analysis of systems and vendors. She has 12 years of experience in telecom, working in market strategy, product marketing, and research and development. Most recently, Ms. Brescia was director of Corporate Strategy at Alcatel-Lucent. She has strong expertise in Ethernet services and vertical markets, and on profiling the technical and economic issues and requirements of the different vertical sectors.