Wireless Cities 2006

1

• Wireless Cities 2006
• Oulu, 8.6.2006
• Horizontalization of Telecommunications
• Dr. Arto Karila
• Karila A. E. Ltd.
• arto.karila_at_karila.com

2
ICT and Economics

• ICT is seen as the single most important means to
  increase productivity, especially in developed
  countries
• Deployment of ICT has increased productivity by
  820, especially when renewing processes and
  deploying information networks (ETLA 2003, OECD
  2003)
• With mobile solutions 40 increases in
  productivity have been reached (ETLA 2004)
• Deploying ICT without renewing the processes can
  even lead into decreased productivity
• In Finnish hospitals, productivity has decreased
  11.5 p.a. in the 2000s and in health centers
  8 from 1998 to 2002, despite ICT investments
  (National health project)
• There are great unutilized opportunities in
  services, especially in the public sector (see
  next slide)
• We need solutions that enable people to live at
  home in a decent, active and safe way as long as
  possible

3
Untapped Opportunities in Services

• Source Professor Olli Martikainen, ETLA, 2005

Other services
Education
Public administration
Business services
Financial and insurance services
Telecommunications and post
Transport and support activities
Hotels and restaurants
Wholesale and retail trade
Annual average Total Factor Productivity Growth
() in 1976-2003 and its Components in Finland
Construction
Energy and water supply
Other industry
Manufacture of transport equipment
Manufacture of electronic equipment
Manufacture of machinery
Manufacture of pulp and paper products
Manufacture of food products
-4,00
-2,00
0,00
2,00
4,00
6,00
8,00
Other
Growth in quality of production
Growth in quality of labor
Growth in quality of software
Growth in quality of equipment
4
Convergence
5
Horizontalization of Telecom
6
From Vertical to Horizontal Architecture

• Telecommunication has traditionally been
  vertical, with each application in its own
  network
• The internet has from the beginning been
  horizontal in nature, with transfer of data
  independent of applications
• The converged infrastructure and horizontal
  architecture bring with them greatly improved
  economies of scale
• New services can be profitable almost
  immediately, running on existing terminals in
  existing network
• This development leads into increasing
  innovativeness and competition in services
• A big challenge is insuring the quality of the
  total service when service and network operators
  are different
• Operators are becoming bit pipes, which they
  resist
• There are attempts to reverse this
  horizontalization
• 3G and DVB are inherently broken concepts of the
  past

7
Applications and the Cost of Transfer
8
Internet in the Mobile World

• The introduction of internet technology and
  business models into telecom and mobile world
• In the future, mobility will be just a property
  of internet
• There will be mobility between widely different
  networks
• It is important to have metrics for choosing the
  right network as well as mechanisms for roaming
  btw them
• Moores law is bringing several network
  interfaces into small and inexpensive portable
  devices
• Fuel-cell technology will enhance their use time
• 4G means mobile services that seamlessly operate
  in a variety of networks (e.g. WLAN, 2.5G, 3G)
• We also need wireless IP networks with large
  coverage
• Such systems are already available but both
  operators and the leading vendors are reluctant
  to deploy them

9
The Relevance of Wireline Networks

• With the exception of Iridium, all large networks
  are based on a wireline backbone
• In optical fibers we can inexpensively run speeds
  of 10 and soon 100 Gbps
• The potential capacity of one fiber is at least
  100 Tbps and there can be hundreds of fibers in a
  single cable
• Wireline networks will remain significant also in
  the future and form a basis for ubiquitous
  wireless access
• We need open fiber networks extending to every
  house
• The customers should decide what they are used
  for
• The fiber network should be designed to be
  redundant (that is, consist of rings) for
  reliability
• The owner of the fiber network should not compete
  in communication services

10
Open Access
11
Threats

• The telecom competition introduced recently is
  moving back towards an monopolies through
  consolidation
• Operators are trying to cement their vertical
  structures and even introduce them in the
  internet
• For example, there are attempts to filter VoIP
  and charge twice for some popular services
• The key question is, who should decide on the
  services, QoS and other issues operators or
  customers
• The development is dominated by the US and they
  have little intention to let other meddle in
  these affairs
• The very existence of the open internet is
  threatened
• Sir Tim Berners-Lee recently pointed out, that
  the US plans to implement a two-tier internet
  will lead the net into a dark period and that
  we should resist all attempts to fragment the
  internet into different services

12
What Should Be Done in Finland

• The fiber network should be extended all the way
  to houses as an open and operator-independent
  part of public infrastructure (like roads, power,
  water, sewers)
• Other cities should open their WLAN
  infrastructures like Oulu and Lahti already have
  done
• Also the obstacles to opening privately operated
  WLANs should be removed
• Finland no longer is a leader in the deployment
  of ICT
• The recent bundling of 3G phones to subscriptions
  will not help
• As soon as inexpensive, reliable and fast
  wireless communications are brought to everybody,
  the customers will develop their own services,
  which we can only try to imagine now