CEO Sees Edge for Mobile

Wireless operators are more tuned in than their fixed brethren to the service creation model that will spell cashflow for operators in the future.

That's the view of Bert Whyte, CEO of Network Equipment Technologies Inc. (net.com) (NYSE: NWK), a company that bills itself as a "service creation solutions provider."

(Ed note: And you thought net.com made IP/ATM switches? Well, in the mobile world, "service creation" is a generic term that refers to additional... er, services that carriers provide above and beyond simple voice calls and data transfer. It generally means that carriers offer additional security and QOS features, such as VPN tunneling and firewalls, to corporate customers that are prepared to pay for the privilege.)

Anyway, back to Bert:

It is the mobile sector that is innovating, he says, and this stems from the network architecture that wireless operators have had to deploy by default. "Their networks are more open because the network operations and service layers are divorced. The architecture separates the data plane from the control plane, as that was the only way to build networks that could allow roaming and give the operators the ability to identify where a subscriber is when they connect to the network," says Whyte. "Incumbent fixed networks are proprietary and don't have that separation."

Whyte says that unless the fixed operators adopt the wireless network architecture model for their broadband services, they are dead in the water, as their cash cow voice revenues get eroded by price pressures and the loss of customers to their wireless competitors.

"The only power the fixed operators have going forward is the level of high-speed connectivity that cannot be easily replicated by the wide-area wireless operators. The fixed operators need to be able to add services to their broadband networks, because if they don't, they may not have a business in 15 years' time." The young users of today in progressive countries such as Finland have only mobile voice accounts and have never signed up for fixed voice connections. That pattern will be replicated around the world, as fixed voice cannot compete with the "call anyone from anywhere" model that the mobile operators offer. "There is no middle ground for the fixed operators. They must adopt the wireless model or fall apart slowly. But if they can replicate it, then the possibility for the delivery of very rich services is tremendous." — Ray Le Maistre, European Editor, Unstrung
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