Stato e Futuro del settore Stato e Futuro del settore ICT in ItaliaICT in Italia

Roma, 13 dicembre 2005Roma, 13 dicembre 2005

Claudio Carrelli

L’innovazione nelle tecnologie di comunicazione elettronica

2. From cable versus 2. From cable versus radio to Fix vs Mobileradio to Fix vs Mobile

Source: Western mail

1899:the “pressure” of the 1899:the “pressure” of the PressPress

• ““New York Herald”New York Herald” and “Evening Telegram”“Evening Telegram” newspapers sponsored the wireless transmission experiment to enhance the reporting of the America’s cup event

• The success obtained, with apparatus installed on a ship following the race, gained Marconi world wide publicity

A new technologyA new technology(not so simple)(not so simple)

• In 1901, at the time of the first Transatlantic transmission, using that technology, only about 50 contemporary conversations, could be established on the surface of the earth.

0

5

10

15

20

25

30

35

1900 1925 1950 1975 2000

100

1 Million

100 Million

10 Billion

1 Trillion

1

Cooper’s lawNumber of contemporary wireless calls

10000

What happened to What happened to radio?radio?

• Traditional industry: point to point radio relays

• Strong competition between radio and cable– Focus on perfection, look for infinite quality

• ...The raise of fibre and ...radio confined to Academia research

The “wireless challenge”The “wireless challenge”• Deployment of mobile telephony• The success of GSM• GPRS and EDGE developments• UMTS, HSDPA,.. 4G,..• IEEE Computer Society (Project 802)

A complete family of new standards, spanning from personal networks to full mobility on metropolitan area networks

Wireless Communications Wireless Communications evolutionevolution

MobileFiMobileFi802.20802.20

10 kbit/s10 kbit/s 100 kbit/s100 kbit/s 1 Mbit/s1 Mbit/s 10 Mbit/s10 Mbit/s 100 Mbit/s100 Mbit/s 1 Gbit/s1 Gbit/s

UltraWideBandUltraWideBand802.15.3802.15.3BluetoothBluetooth

802.15.1802.15.1ZigBeeZigBee

802.15.4802.15.4

1 kbit/s1 kbit/s

CABLECABLEREPLACEMENTREPLACEMENT

HOME, OFFICEHOME, OFFICE

PUBLIC ACCESSPUBLIC ACCESS

CITY,CITY,SUBURBSSUBURBS

COUNTRY,COUNTRY,REGIONREGION

WIDEWIDE

Ran

ge

Ran

ge

Bit RateBit Rate

PANPAN

WLANWLAN

WMANWMAN

UMTSUMTSEDGEEDGEGPRSGPRSGSMGSM HSDPAHSDPAWAWANN

Wi-FiWi-Fi802.11b802.11b

802.11a/g/n802.11a/g/n

WiMAXWiMAX802.16a/e802.16a/e

LIMIT

ED

LIMIT

ED

FULL

FULL

Mob

ilityM

ob

ility

Where is mobile going?Where is mobile going?

• Europe is “cashing” on GSM

• Asia is “leading” the market

• USA is “challenging” the sector

A controversial issueA controversial issue((is there a fixed mobile competition?)is there a fixed mobile competition?)

•More Bandwidth on fixed•More Traffic on fixed

•More services on mobile•More VAS revenues on mobile

How to cope with such situation?How to cope with such situation?

• ....but..

A provocative viewA provocative view

• The future backbone will be more and more in the fixed network,…..

• …but the growing wireless access will more and more satisfy the need for mobility

What future: fix or mobile?What future: fix or mobile?

Claude Shannon 1916-2001

WN

PWC

02 1log

C = Capacity [kbit/s]P = Signal PowerW = BandwidthN0 = Noise

Integrate, but do not Integrate, but do not confuse fix and confuse fix and

mobilemobile

How can you paint a How can you paint a landscape?landscape?

““Wireless is the fast food of Wireless is the fast food of content, content,

……. is not good to apply the . is not good to apply the standards of a six course standards of a six course

menu”menu”

3. The digital revolution3. The digital revolution

Is “digital” the best Is “digital” the best solution?solution?

• PCM introduction since end of sixties • 64 kbit/s requires 16 kHz for a single

channel• ~4 times the bandwidth for a corresponding

3 kHz analog voice channel

• “Digital” requires more bandwidth!

• The issue: the cost of bandwidth

What solutions to What solutions to overcome the problem?overcome the problem?

• Technology development basically on three directions:

• Increase “transmission capacity” (bandwidth)

• Upgrade “line coding” or modulation techniques (increase bit/Hz efficiency)

• Enhance “source coding”: reduce redundancy of the source signal

What are the present What are the present limits?limits?

• Optical fibre capacity

(current experiments up to 10 Tbit/s, theoretical limit close to ~100 Tbit/s)

• Radio links (from 2 up to 256 QAM)

• Source coding: MPEG 4: allows to pack up to 50 TV channels within the same bandwidth used for an analogue one

We live in a digital We live in a digital worldworld

• All type of information, no matter if voice, data, text, music, video, image, or other, may be reduced to a “handful of bits”

• And these bits can be:

– Stored, or

– Processed, or

– Transmitted

The big competition in The big competition in the ICT gamethe ICT game

• Storage capacity• Processing power• Transmission capacity • Is it cheaper a stored bit, a processed bit or

a travelling bit?• And how will each of these costs decrease

with time?

Three “decreasing costs” for a bitThree “decreasing costs” for a bit

Processing TransmittingStoring

Who is running faster?Who is running faster?

A weaving of lawsA weaving of laws

• Moore’s law

• Gilder’s law

• Metcalf’s law

• Telecosm’s law

• Amdahl’s law

• Conduits and content law

• …..

What impact on What impact on network architecture?network architecture?

• A well known rule of thumb:

• Transmission is cheap: – circuit switching

• Processing is cheap: – packet switching

The Paradox of the “best The Paradox of the “best network”network”

• “Intelligent networks” have been continuously upgraded and optimized for voice services

• But…today's optimization might be .. tomorrow's bottleneck

• Should a network be “intelligent” or “stupid”?

• The best network just moves bits

• But ….. this “best” network is the “hardest” one to make money running

David Isenberg

A simple way to A simple way to communicatecommunicate

And ….a more complex oneAnd ….a more complex one

...heard at an EU Commission ...heard at an EU Commission public hearing..public hearing..

• Skype has a staff of 170 people

• Verizon has a staff of 170.000 people

• Does such comment make sense?

• What could Skype be without Verizon?

What about VoIP?What about VoIP?

The illusion of “IP free” The illusion of “IP free” visionvision

• No free lunch, no free network

• Any network has investment costs and maintenance requirements,…

• QoS, predictability, reliability, traffic planning and measurements

• Clever operators will implement clever networks

4. Future trends and 4. Future trends and opportunitiesopportunities

Big changes in telecoms Big changes in telecoms scenarioscenario

• From public monopoly, …to ….private monopoly

• From profit in long distance to profit in local access

• From point to point radio connections to full mobility

• From voice communications to multimedia and entertainment

The evolving role The evolving role of ...telcosof ...telcos

• Voltage carriers (telegraph)• Frequency carriers (telephony)• Bit carriers (digital era)• Information networking (middleware

platforms)• Ubiquitous Multimedia Entertainment

(the new convergence)• …..

Who is running the Who is running the telecom Industry?telecom Industry?

• Up to 20 years ago: “Telecomms engineers”

• 10 years ago: “Marketing experts”

• 5 years ago: “Telecomms regulators”

• Today: “Finance”

• ……

• Will “Lawyers” be the next?

• ..and then, ….is the cycle complete?

The present pictureThe present picture

• After 3 decades of stability and mandatory school (digital Tx, digital Switching, CCSS, IN, TMN, mobile..)

• The first bewilderment

The crisis due the rise of competition and internet bubble and its following bust

• ... Nevertheless, we see the light at the end of the tunnel

Let us try to avoid a Let us try to avoid a second bewildermentsecond bewilderment

Be aggressive in the new Be aggressive in the new environmentenvironment

World-wide Digital World-wide Digital MarketMarket(Bn Euro)(Bn Euro)

• Telecom Services 1122

• Telecom Equipments 253

• IT Hardware 344

• IT Software 570

• Audio visual Services 350

• Consumer Electronics 277

• Total ~3000Source: EU Commission

Defend or attack?Defend or attack?

What type of relationships?What type of relationships?A battle of giantsA battle of giants

……struggle?..struggle?..

……hand shake?...hand shake?...

……or merge?...or merge?...

……..a future result…...a future result….

From short term attitude, From short term attitude, back to vision and back to vision and

investmentsinvestments

A strategy shiftA strategy shift

• Technology already offers unforeseeable opportunities for new services

• Focus should mainly be on innovation rather than on geographical expansion

• New acquisition do not automatically guarantee new profits

• Short term profits will not guarantee future growth

The relevance of R&DThe relevance of R&D

R&D is a major driver for R&D is a major driver for valuevalue

• The relevance to develop “options”

We must crack a lot of rock to find a diamond

Look to the future!!!Look to the future!!!

• ICT technologies will enable a variety of applications for a better quality of life

• But remember: Revolutions take time,

• and their benefits are more important and enduring than:

• the latest stock price, or

• the need to meet short term earnings expectations

The potential risks of The potential risks of “wait and see”“wait and see”

• Technology is a fundamental enabler to upgrade and expand service offerings

• Mastering new technology will always offer a tremendous competitive advantage

• The more you consider technology just a commodity, the less you will invest in R&D and the more the financial analysts will downgrade your value.

The regulatory The regulatory challengechallenge

• Do we need specific regulation for each new technology?

• The transition from analog to digital (TX and switching) on the fixed network has been implemented with no regulatory impact

• The same transition, …and the following new developments on mobile networks, were not implemented without strong regulatory impact

What are the next What are the next steps?steps?

and,… to concludeand,… to conclude

TechnologyTechnologyDo Not Stop!Do Not Stop!

You are always leading!You are always leading!

MarketMarketMilk The NetworkMilk The Network

Do not wait for fibre!Do not wait for fibre!

RegulationRegulationPromote The Global MarketPromote The Global Market

Mind The Risk Of OverregulationMind The Risk Of Overregulation

Do not allow….the law of the jungleDo not allow….the law of the jungle nor build up….the jungle of the lawnor build up….the jungle of the law

Thank you for your Thank you for your attention!attention!

Si ringrazia TV BLOB per aver reso disponibili gli apparati su internet Si ringrazia TV BLOB per aver reso disponibili gli apparati su internet per il collegamento con Torino per il collegamento con Torino

Si ringrazia TV BLOB per aver reso disponibili gli apparati su internet Si ringrazia TV BLOB per aver reso disponibili gli apparati su internet per il collegamento con Torino per il collegamento con Torino

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