|
Author: Dan Bieler
KPN has entered a contract with Lucent concerning the network integration and project management of its all-IP next-generation network (NGN). The NGN project covers its operations in the Netherlands.
Comment: KPN has become one of the leading incumbents in terms of NGN rollouts. Its all-IP NGN will be based on IP Multimedia Subsystem (IMS), and forms the basis of KPN's triple-play and multimedia activities. KPN has earmarked €1bn-1.5bn in capex for the NGN project.
But in addition to establishing the platform for new and emerging applications, its NGN is also important as a means to drive down operating costs. A good proxy of its network expenditure would be its wholesale operating cost less POLOs, depreciation and SG&A. From 2010, KPN expects to save several hundred millions of Euros per annum based on this definition.
KPN should benefit from earlier opex savings than other incumbents due to its early mover position. However, a number of issues remain unresolved and could limit the potential benefit of the migration towards an NGN. A key obstacle for the successful migration towards NGNs remains the issue of IP interconnect and net neutrality, i.e. the discussion of who gets paid by whom, how much, when and what for.
The migration towards IP-based services is breaking down old classifications, making old payment structures less workable. For example, it is still not clear from a regulatory perspective whether a VoIP call is a voice call, an IP data exchange or a “free service” that is offered as part of chargeable line access. Thus it is important for the regulatory discussion to move towards providing a more reliable regulatory framework in order to secure additional investment in the NGN rollout.
Being at the forefront of the NGN migration should allow KPN to actively shape the discussion - in contrast to more reactive players that have been hesitant to embrace the NGN discussion earlier.
|
