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The ongoing acceptance and expansion of residential triple-play services presents both opportunities and challenges to equipment providers and carriers alike. Most carriers in virtually every region of the globe have indicated their intentions to roll out some form of triple-play services that incorporate data, voice and video into a single connection common service package over the next couple of years (if they have not done so already). Naturally, this presents the opportunity for most equipment vendors to take advantage of new carrier spending initiatives (e.g., IPTV integration) or further expand well established relationships to take on more strategic importance, such as functioning as the lead integrator of triple-play network migrations and buildouts rather than as a voice-only or data-only equipment provider. Equipment vendors must prove, however, that they are up to the task of meeting the challenges that carriers face in deploying and scaling triple-play services. These include adopting new operational models and overcoming technical barriers.

In terms of operational models, carriers obviously need to adopt practices that are attuned to the flexible service and support of integrated yet distinct services. For most carriers, deploying triple-play services requires learning new technologies, training and retraining of personnel, implementing new billing processes and developing higher levels of organizational integration--to name a few--while also meeting CapEx and OpEx expectations.

What this means for equipment providers is that carriers will now require some of their key employees to possess the skill sets to simultaneously troubleshoot triple play-related equipment in the areas of data, voice and video applications as well as mobile and wireless applications. This approach is distinct from traditional approaches in which one set of personnel focus primarily on data applications, another set on voice applications and so on.

In terms of extending unified management and domain control to distinct triple-play network elements, the evolution and standardization of policy networking technologies, including policy servers, takes on greater importance. The CableLabs PCMM Policy Server testing regime, which defines QOS and accounting methods in a standardized fashion, is a good example of how carriers now view the increased strategic importance of robust policy management platforms.

In the case of telcos, technical challenges include easing migration from TDM- and ATM-centric network architectures toward IP-centric network architectures in the first mile and second mile portions of the network; evolution from centralized network models toward more distributed network models; transition from PPP to DHCP or hybrid PPP/DHCP subscriber management models and video networking integration.

Such technical considerations will compel telcos to adopt new CPE gear types such as set-top box capable CPE and video networking technology such as middleware, encoders and VoD servers. They will take on recently developed first mile DSL gear such as IP DSLAMs and broadband loop carriers, deploy rapidly evolving second mile gear such as multi-service routers and Ethernet switch aggregators to replace ATM-based multi-service switching gear and implement new MPLS-based core technology.

On the technical and business case side, the amount of bandwidth per subscriber required for a successful long-term triple-play service is still in dispute. Telcos, for example, still must contend with the concern that ADSL2+ may not prove competitive in the long term in relation to cable operator offerings (e.g., can 20Mb/s downstream support multiple HDTV channels without requiring more expensive upgrades?). FTTH is an attractive alternative but remains a niche as more than 90% of residential last mile technology is copper based, thus requiring continued reliance on DSL.

These technical considerations indicate telcos, at least in North America, face more challenging upgrades and thus will be hard-pressed to catch up with cable operators as they continue to make strides in landline VoIP services. For one thing, VoIP is less onerous to integrate into a video/data-capable network than video is into a voice/data network.

In addition, some advanced cable networks already offer up to 500 channels, PVR/DVR capabilities, VoD, etc., which telcos will be hard-pressed to emulate.

In effect most telcos face a treadmill effect in trying to counter cable network upgrades--every time the telcos believe they have caught up with the cable operators, the cable operators unveil their latest advance or upgrade to keep ahead. This one-upmanship is possible because cable networks were purpose-built for high-bandwidth video applications while telco networks were purpose-built for narrowband voice applications, which makes it more challenging for telcos to counter cable operators.

Cable operators cannot afford to rest on their laurels, however, and are looking to adopt industry initiatives in areas such as DOCSIS 3.0 and PacketCable Multimedia testing. They also trail telcos in offering wireless services and applications.

Overall, while triple play services are already available from carriers, such as independent telcos and international carriers, the real mainstream threshold will be crossed when major telcos (e.g., the former Bell companies) and cable operators extend triple-play services to at least a million of their customers. This could happen by 2007.

Ron Westfall is principal analyst covering broadband infrastructure for Current Analysis.