Convergence, surely, must be the most oft-used word in the CEO’s lexicon of industry terms. Ample proof of this was to be found today at the CEO roundtable discussion at the ITU Telecom World 2006 event.
“Everything will be converged into the mobile industry,” said Ki-Tae Lee, president of Samsung Electronics’ Tele - communications Business. “All networks, such as Wibro, WiMax and 3G, will be integrated onto the mobile phone.”
Lee says that Samsung is working on producing a quad-band phone capable of delivering a multitude of services. Samsung sees Mobile WiMax as particularly promising. “We’ve already demonstrated 100Mbps for 4G [mobile WiMax],” said Lee.
Sanjiv Ahuja, CEO of Orange UK, added: “The technological barriers between fixed and mobile have been removed,” he said. “There is now convergence.”
The CEO of Motorola, Edward Zander, said: “We’re focusing on seamless services between the mobile [network] and the home/enterprise [fixed networks] to give convergence.”
Patricia Russo, CEO of Alcatel-Lucent, gave a definition of convergence. “When I say convergence, I am talking about the service layer not the technological layer. There will still be the need to have mobile and fixed networks.”
Perhaps the most innovative use of service convergence is by Japan’s NTT DoCoMo. Running alongside its traffic-based services – voice and data – it has a strategy which it dubs ‘life assistant’. “Customers can replace their wallets with the mobile phone as it has everything they need,” said Masao Nakamura, President and CEO of NTT DoCoMo. “It can be used as a credit card, e-ticket and even for employee authentication.”
However, Nakamura admitted there was no easy way of knowing which of the converged services the customer would want in advance. “The marketing people must play a big role to help in this. We do, however, launch services even though we don’t know for sure if the customer wants them,”
Aside from recognising the trend of convergence, the CEO panellists agreed that bridging the digital divide was a main challenge for the telecom industry but one that mobile and wireless technologies could meet. “It took 21 years for mobile to get its first one billion customers, three years for the next billion and it looks like over the next year and a half we’ll get to three billion,” said Zander.
Orange’s Ahuja hinted that it’s in the interest of governments in emerging markets to promote mobile usage. “You get the strongest GDP growth in places where mobile penetration is the highest,” he said.
But Carl-Henric Svanberg, CEO of Ericsson, said there was still a lot of work to be done in bringing network costs down in emerging markets. “Of the cost to install a base station, only 15 per cent is the kit itself. The rest is site procurement and getting power to the base station. We need to work at getting these other costs down.”
Motorola’s Zander also warned that customers in emerging markets are not just looking for any handset so long as it’s cheap. “People in India want an iconic device with features that they want, just as people do in developed markets.”