NGNs will increase bandwith (i.e. the ”speed” of the Internet connections) dramatically,
up to 100 megabits per second, which will enable transmission of several channels of high
definition television and services such as e-government, e-health, e-learning and so on.
Therefore, the next generation networks will be the leading driver of the future investment
in telecommunication networks. The European debate mainly concerns the deployment of
NGNs at the access (i.e. local loop) level: in this paper we will concentrate on access
NGNs.
Laying fibre up to the customer’s premises or close to it represents a serious financial
effort, mainly due to the cost of obtaining building permits and of engineering works in
urban and rural areas, which together represent from 50 to 80% of the overall capital
expenditure5. So far, the main European operators have announced preliminary plans of
investment (see Figure 3). In Italy, Telecom Italia expects to invest between 6 and 7 billion
euros in next generation networks by 2015. Such an effort will be tuned according to the
increase of demand for services based on NGNs.
Next generation networks have the potential to offer substantial economic benefits. They
can:
• lower substantially operating costs, (instead of several networks, each with its own
provisioning and maintenance procedures, a NGN carries all traffic on a single
network);
• allow operators to develop services more quickly and more cheaply because
intelligence is centralised rather than embedded in switches, (this in turn allows
them to experiment with services to find out which ones best meet end user needs);
• deliver higher functionality services, (because of their ability to integrate and
bundle services).
In other words, NGNs can both lead to cost savings in the provision of services and
enhance revenues by enabling brand new service.