PTC round up

Sun, sea and submarine cables

The Pacific Telecommunications Council conference, which took place in Honolulu on 16-19 January 2011, brought together service providers and carriers from around the world. While a number of key conversations took place in the Tapa Bar and the atmosphere was relaxed and informal, delegates found they had plenty of material to discuss. A series of expert speakers and conference sessions also provided food for thought, and initiated debates which were continued throughout the event.

Perhaps some of the most stimulating information was presented early in the conference by Stephan Beckert, VP of strategy at TeleGeography. He stated that – in terms of wholesale revenue – while wholesale traffic into the top 10 destinations in 2009 grew by 6 billion minutes, the total revenue generated by this traffic fell by $600 million. Even more interesting perhaps were the statistics he presented on Skype. In 2010, Beckert estimated that Skype added a total of 45 billion international Skype-to-Skype minutes, which amounted to more than double the international minutes added by all the international carriers combined.

A later interview with Vincent Paquet, senior product manager at Google USA, shed some light on plans for web-based voice application Google Voice, which is currently in negotiations with a number of countries outside the US to take its service overseas. While Paquet sees Google Voice as a silo breaker, linking the silos which currently exist between mobile, office and home phones, he does not see it as competition for service providers. "If anything," he said, "it’s additional traffic for mobile operators, because I’m going to use my cellphone to make calls I wouldn’t normally use my cellphone for. We definitely work with a lot of operators on termination; so if you’re in the business of terminating traffic around the world, it’s certainly something we’re happy to discuss."

The keynote panel on the future of the internet also raised some curious facts. Robert Pepper, VP of global technology policy at Cisco, predicted that in five years time 5 billion people will be on some form of broadband, while there will be 1 trillion IP-enabled devices.

In particular, the impact of what Pepper called ‘ambient video’ was staggering. Ambient video is people using webcams to monitors things while they are away, a classic example being streamed security video. PuppyCam is a famous example, and Cisco calculates this site alone accounted for 310 terabytes of internet traffic per month in 2008.

Pepper presented the information compiled in the Cisco Visual Networking Index, in which anonymous information obtained from global network providers is used to forecast traffic projections for the next five years. In 2014, ambient video is predicted to account for 16% of all video traffic across the networks; while only a few years ago, ambient video did not exist. This "serendipitous use" of the internet, as Pepper referred to the evolution of new, often unanticipated online trends, is what makes the needs of the telecoms industry so difficult to predict.

Other issues also dominated the conference. As Diarmid Massey, VP of carrier services, global markets, at Cable & Wireless Worldwide said: "Last year, we talked about mobility and ‘the cloud’; this year, the industry has come back with a better understanding of it. We understand that capacity is key, but that collaboration and an open mind to new business models can help us achieve this. There were certainly many more in-depth conversations on corporate symbiosis this year, as we see more structure around new collaboration models."

Another positive spin on the problems facing the telecoms industry was put forward by Marc Halbfinger, CEO at PCCW Global, who addressed the hot topic of variable pricing. He refuted the idea that telecoms capacity is a commodity, because "commodities go up and down," while telecoms end-pricing only goes down. Halbfinger believes the problem is that capacity is sold at a fixed value; carriers have no way to differentiate services to recoup the extra costs involved in escalating bandwidth requirements and the globalisation of network infrastructure. He believes the challenge is for carriers to create variable value while maintaining a fixed cost. Will Hughs, CEO of Telstra International, responding to his comments, cited low-latency routes as a positive example that variable pricing can, and is, beginning to work.

While these problems are sufficient to tax many of the best and brightest in payroll, it is at least encouraging to debate them in such a beautiful setting. As Massey commented, "Our industry has always been a very serious one. What we like about PTC is the chance to have conversations with our peers in a much more relaxed environment."

If this week has determined anything, it is that there are very few issues in telecoms which are not made better before a relaxing sunset.