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LONDON, UK, 21 February 2008

Service orientation, rather than next-generation access (NGA), is the key to renewal in fixed telecoms, according to a new report by Analysys, the global advisers on telecoms, IT and media ( Smart and timely investment in the core will deliver better returns than banking on success in high-bandwidth TV services.

The report, Next-Generation Network Architecture: what and when?, argues that the revenue uplift from higher-speed access will not be enough to reverse the gradual decline in wireline revenue for the typical European incumbent. (To request a copy of the report summary contact

“The scale of the TV market simply isn’t great enough to compensate for the accelerating declines in legacy services,” argues Stephen Sale, co-author of the report.

“Telcos do not have a big enough differentiator in TV; even the most optimistic ARPU (Average Revenue Per User) projections for triple play will not boost a typical incumbent’s top line by more than about 3%, and an NGA strategy without rapid core transformation does not begin to address the long-term problem of rationalising a legacy of multiple network overlays.”

The report contends that the network rationalisation in core and IT-transformation projects can deliver real cash cost savings, as long as operators execute transformation plans efficiently. As more fixed and mobile operators externalise their cost bases, this cost advantage should enable fast-moving NGN (Next-Generation Network) operators to exercise more control over the core transmission market.

The opportunities to deliver novel business services on the back of the new service functionality are greater than in the consumer multimedia space, the report’s authors assert. Within a five-to-ten year timeframe, the report argues, an operator focusing its investment in core and service-delivery architecture could expect both higher revenue and higher margins than one investing mainly in access.

“Investment in fibre may look radical, but it’s fundamentally quite conservative because it’s essentially a defence of fixed broadband, rather than a growth strategy, and because it still locates a telco’s main assets in physical networks rather than service delivery capability,” says Rupert Wood, co-author of the report. “But it won’t be enough to create an enabling platform that offers faster time to market – the revenue streams are too undefined. What operators urgently need is a clear roadmap of their own retail managed services portfolio.”

This report examines the relative merits of the three main approaches to NGN investment:

- a move to a full NGN core
- investment in next-generation access (NGA) with a core overlay
- a strategy of rolling out NGA and NGN at the same time

The report identifies critical dependencies and assesses the ability of each strategy to attain the desired outcomes of cost saving and revenue enablement, given different market and regulatory environments.

The report is available to purchase online at, priced at GBP2250 (approximately EUR3000) plus VAT. For more information, telephone Analysys on +44 (0)1223 460600 or email

For further information contact Gina Ghensi or telephone +44 (0)1223 460600.

About Analysys (

Analysys provides strategy and management consultancy, information services and start-up support throughout the telecommunications, IT and media sector. Its grasp of market dynamics, coupled with creativity, rigour and renowned objectivity, enables Analysys to consistently exceed the high levels of quality and innovation that its clients expect. The company has over 160 staff worldwide, and, as part of the Analysys Mason Group, has offices in Cambridge, Dublin, Edinburgh, London, Madrid, Manchester, Milan, Paris, Singapore and Washington DC.

Media contact:

Gina Ghensi
Tel: +44 (0)1223 460600
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