Interconnection is a key subject in wholesale business. With the implementation of NGN, Quality of Service (QoS) and its ­maintenance and assurance beyond network boundaries will become a critical factor for success. Here the network operators can use a variety of business models which are differentiated according to their quality characteristics. The choice of an interconnection regime plays an important role here. This will affect both network operators, due to its effect on their motivation to invest, as well as national regulatory authorities and their objective of ensuring fair competition.




Next Generation Networks (NGNs) are the flavor of the month. No one is asking whether NGN will arrive, just when. The savings potential offered, along with the ability to provide new and innovative products and services, make them very attractive to network operators. The term NGN here is however somewhat misleading, as there always have been and always will be NGNs. Ten years ago it was the shift from analog to digital switching technology, today it is the development away from separate circuit and packet switched networks to a unified IP-based world. In this new world the transportation of IP packets and the supply of applications and services will be completely independent of one another.


To what extent will this have an effect on the network operators’ wholesale business? "Immeasurable!", is the answer. For example, in the area of voice telephony VoIP can be supplied and terminated without even touching a network operator. This could mean the complete loss of interconnection payments in the future. A glance at the structure of a typical PSTN network operator’s wholesale revenues reveals that nearly 50% of total turnover comes from interconnection services. Any change in interconnection revenues, let alone in the business model itself, will have grave consequences for the wholesale business. But such changes are to be expected – and are being pushed forward by intensive regulatory discussions taking place on the subject. So how can a network operator define commercially successful and technically sensible interconnection relationships in the NGN world?


Interconnection today – Interconnection tomorrow
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