Research paper Penetration of services on future networks: Exploring market players opinions

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1 Research paper Penetration of services on future networks: Exploring market players opinions Received: (in revised form): 9th August, 2010 Jon Iden* is Associate Professor of Information Management at the Department of Strategy and Management, Norwegian School of Economics and Business Administration (NHH). Iden has a PhD (1995) and an MSc (1990) in information science from the University of Bergen, Norway. His main areas of interest are the evolution of next generation networks, business process management and IT service management. He has published two books, presented his research at various international conferences, published papers in journals such as Information Systems Management and Enterprise Modelling and Information Systems Architecture. Iden has wide industry experience. Leif B. Methlie is Professor of Information Management at the Department of Strategy and Management, NHH. His recent research covers strategic challenges to enterprises due to internet-based network infrastructures, including business models and new service developments. Methlie has been the Rector of NHH in two periods ( ) and has had a multitude of tasks in international professional organisations, been editor of a number of conference proceedings, presented papers at various international conferences, published three international books and published papers in journals such as Journal of Information Technology, Information and Management and Journal of Electronic Commerce Research. *Norwegian School of Economics and Business Administration, Department of Strategy and Management[ed1] jon.iden@nhh.no Abstract As telecommunications networks are being transformed into next generation networks the communication and media landscapes are being reshaped, and a wider range of network services is emerging. Technological development, deregulation and competition are introducing many more service suppliers than in the past, but little is known about the future market penetration of services. By deploying a Delphi study using two panels of experts from the Scandinavian region market analysts and service providers this paper develops a comprehensive list of 66 services organised into ten groups that are expected to be offered on future next generation networks. This research finds that the two expert panels perceive the future penetration of services differently, which leads to the conclusion that today there is great uncertainty about what the future network market will look like. Among the identified services, the market analysts agreed that web-based computing will be the most important service, while the service providers ranked mobile broadband as the most important. KEYWORDS: method telecommunications, next generation networks (NGNs), network services, Delphi PRINCIPAL MANAGEMENT IMPLICATIONS[ED2]. The emergence of the new infrastructures that future networks (next generation networks, NGNs) will bring will reshape telecommunications as well as the media landscape.. Deregulation is expected to introduce many more suppliers than in the past, and NGNs represent a real opportunity for service providers to rapidly create, deploy and deliver multiple services that will attract new customers, hold on to existing ones and increase market share.. Service creation is fundamental to the promises of the NGN, but there is still # Henry Stewart Publications (2010) Vol. 3, Journal of Telecommunications Management 1

2 Iden and Methlie significant uncertainty as to what the service market of the NGN will look like in the future.. To the authors knowledge there are no research-based studies of future services on the NGN and the purpose of this study is to apply a rigorous method to reduce the uncertainty about the penetration of future services mediated by the NGN.. The results from this study are relevant for management in various firms network operators, service developers and providers, investors, standards bodies and regulatory authorities and may be used to understand the technical, market and business requirements for the successful adoption of services provided by future networks. INTRODUCTION As we move from a telecommunications world characterised by single-service networks towards an information service world characterised by multiservice, heterogeneous networks, it is expected that the converging technology will drive all information services towards common distributed layered networks conceptually denoted as the next generation network (NGN). The NGN will utilise a wide range of current and future heterogeneous access networks, and provide end users with seamless services across these distributed networks. 1,2 The key principle of the NGN is a layered network architecture, with a decoupling of services and networks allowing them to be offered separately. These technological developments will increase the complexity of service innovations, and service providers will have to align their business models with these innovations. Thus, new and future services must be identified before new business models can be designed. This paper explores the future market penetration of services to be offered on NGNs in order for service providers to design new business models. Research and innovation of services on heterogeneous access networks are scarce, and focus on seamless services across existing network infrastructures, such as GPRS, UMTS and Wi-Fi[ed3]. As the number of access networks is expected to increase with new wireless networks (eg Wi-Max and DVB- H4), and convergence of fixed and wireless access networks will continue, the services provided by these networks will become more complex. Furthermore, an increase is expected in the number of ad hoc networks (eg shortrange wireless P2P networks and DSRC [ed5]networks) and sensor networks (eg environmental monitoring networks). A major driver for this change is the roll out of broadband access and the host of new services demanding internet access. Other pressures arise from deregulation and competition. 3 Technological research conducted to fulfil the vision of NGNs has been intense, and is expected to continue growing. 4 In addition, an emerging body of literature is investigating the economic, political, regulatory and consumer aspects. The role of the regulatory bodies, for example, has been widely studied. 5 9 Cawley and Preston (2007) have addressed current and future uses of broadband, 10 and Slot (2007) has studied the changing role of the user in digital television. 11 The emergence of the new infrastructures that NGNs will bring will reshape telecommunications as well as the media landscape. Deregulation is expected to introduce many more suppliers than in the past, and the NGN represents a real opportunity for service providers to rapidly create, deploy and deliver multiple services that will attract new customers and enable them to hold on to existing ones. These services and applications will have different characteristics and traverse unique sets of functions, databases and servers through the network. 12 Service creation is fundamental to the promises of the NGN, but there is still significant uncertainty as to what the service market of the NGN will look like in the future. To the authors knowledge there are no research-based studies of future services on the NGN. The purpose of this study is to apply a rigorous method to reduce the uncertainty about the penetration of 2 Journal of Telecommunications Management Vol. 3, # Henry Stewart Publications (2010)

3 Penetration of services on future networks future services mediated by the NGN. More precisely, the authors research questions are as follows:. What services will be offered on future NGNs?. What services will be most important with respect to market penetration? To approach these questions, a ranking-type Delphi method 13 was chosen as the research method. Twenty-four experts from the Scandinavian region, grouped into two panels ƒ service providers and markets analysts ƒ participated in this study. This paper gives the reader a reasonably good feel for what the future market of NGNs may bring. The paper proceeds as follows. First, based on a literature review, it presents and discusses basic concepts. Next, the paper discusses the research methodology used, followed by a presentation and discussion of services identified, as well as the results from the selection and ranking processes. The paper concludes by discussing the results, possible explanations and limitations, and suggests implications for practice and future research. CONCEPTUAL BASIS In this section, a conceptual definition is given of the two terms next generation networks (NGNs) and service to gain empirical meaning of the market penetration of services in future networks. The NGN The past advances of telecommunications have brought several autonomous networks, each with unique services. The dominant business model has been that almost all services on a network were created and provided by a single operator, vertically organised, in a proprietary manner. 14 Several major networks based on this approach exist today: switched telephone networks, mobile telephone networks, the internet and television broadcasting networks. There has been a strong push by service providers, network equipment vendors and industry consortia towards open distributed networks that can be utilised by all types of service providers and for a broad range of services. In addition, growing telecommunications privatisation has encouraged competition, new services, new business models and lower prices. 15 At present, there is a migration from these separate network architectures to collaborative networks based on common distributed layered network architectures. A generic term used to denote these future networks is the NGN. The NGN is a conceptualisation of emerging technological and market developments. The vision behind the NGN is to move from a vertical approach, where access, control and services are closely tied, to a horizontal approach, where each network layer provides reusable elements to other layers. 16 The key cornerstone of the NGN is the decoupling of services and networks, allowing them to be offered separately. NGNs are commonly built around internet protocols (TCP/IP[ed6]), and sometimes the term all IP is used for NGNs. NGNs enable ubiquitous, real-time, multimedia communications. Other characteristics are packet-based transfer, end-toend quality of service, open interfaces and the provision of improved end-user mobility. 17 The International Telecommunication Union (ITU-T) defines an NGN as: A packet-based network able to provide telecommunication services and able to make use of multiple broadband, QoS-enabled transport technologies and in which service-related functions are independent from underlying transport-related technologies. It enables unfettered access for users to networks and to competing service providers and/or services of their choice. It supports generalized mobility which will allow consistent and ubiquitous provision of services to users. 18 As broadband access is becoming widely available, more attention is being devoted to content, and new network development is being driven by a range of different services, such as VoIP, IPTV, VoD[ed7] and smart # Henry Stewart Publications (2010) Vol. 3, Journal of Telecommunications Management 3

4 Iden and Methlie home services. 19 Future networks will include many more vendors than in the past. Hence, more issues regarding software and hardware interoperability and consistency will arise. 20 Mikoczy and Kotuliak (2009) present a number of challenges for future networks such as scalability (new protocols), technical and application mobility, reliability, security and privacy, and management of end-to-end quality of service (QoS). 21 The NGN s service market will be quite different from what exists today. The migration to NGN will take years and, during this transition, applications and services will continue to originate and terminate on the existing separate networks that will interface with future networks. 22 In this paper the authors talk about the NGN as a conceptualisation of a new integrated network, but in practice, there will be a multitude of NGN implementations within and across nations with different attributes, characteristics and qualities. Services on NGNs To discuss and forecast future network services, the notion of service must be clarified. The term is used in a variety of ways, and a wide range of definitions exists. According to Cook et al. (1999), no single definition of service is capable of encompassing the full diversity of the fact. 23 Services represent a large range of highly heterogeneous nonmanufacturing activities. In the words of Dowden et al. (2000): anything a service provider can sell that is not equipment is a service. 24 However, services have some distinguishing characteristics: they are intangible, simultaneously produced and consumed, and often customized to a client s needs. 25 In the authors context, the perspective of Grönroos (1990) is constructive as he characterises a service as an activity or a series of activities that are provided as solutions for customer problems. 26 When identifying future services provided by NGNs, they must be anchored in specific problems or needs that users are facing. An additional perspective that is relevant for this research on future NGN services is presented by Kocan et al. (2002). 27 They define service as a network capability or capabilities made available to end users, providers of the service, or other network elements. In their expression, a service can be a capability provided by one network element and then used by other elements to produce an end-user service. Their broad definition includes network capabilities that may never be seen by an end user. Services will exist at all layers of the network. Some groups of services reside in a particular layer of the network, while other services span two or more layers. It is thus essential to create defined interfaces and use open standard APIs[ed8] and protocols between layers to allow services to be utilised by other layers. 28 One of the first efforts to identify the services to be expected on NGNs was made by the ITU. 29 Here, 16 service groups are listed: voice telephony, data services, multimedia services, virtual private networks, public network computing, unified messaging, information brokering, electronic commerce, call centre services, interactive gaming, distributed virtual reality and home managers. According to Ofcom, examples of new services that NGNs might include are: reliable high definition video, two-way video communications, simultaneous usage of broadband services by different householders, social inclusion for disabled people through new ways of communicating and new ways to access public service content and information, including health and education information. 30 And, the real-time and non real-time communication services, content services, and transaction services are the three types of services that force NGNs. 31 An important aspect of services on future networks is the availability of platforms for delivering such services, and the establishment of platforms goes hand-in-hand with the development of network standards. 32 This study, however, is addressing services and not the platforms developed for providing services. Overall, the literature surveys presented 4 Journal of Telecommunications Management Vol. 3, # Henry Stewart Publications (2010)

5 Penetration of services on future networks above show evidence more of the technological possibilities and examples of services. It has not been possible to find classificatory systems or conceptual frameworks for NGN services. RESEARCH METHODOLOGY The aim of this study is to explore the future penetration of services mediated by the NGN. This complex domain requires knowledge from people who understand the technological, economic, social and political issues of media and telecommunications. In this case a Delphi study seemed most appropriate. The Delphi method is a widely employed and accepted group decision method of establishing forecasts of future issues in which pure model-based statistical methods are not practical or possible, human judgmental input is necessary and experts are geographically dispersed. 33,34 The method is not necessarily used to elicit a single answer to a problem. 35,36 Four key features characterise the Delphi method and distinguish it from other group interaction methods: anonymity, multiple iterations, controlled feedback and the statistical aggregation of group response. 37 The main disadvantages of a Delphi study are seen as the length of the process, researchers influence on the responses due to particular question formulation, and difficulty in assessing and fully utilising the expertise of the experts because they never meet. 38 For more information about the Delphi method the reader is referred elsewhere To ensure a reliable and validated data collection process, the opinion of a panel of experts was elicited through iterative controlled feedback. Therefore, a ranking-type Delphi research method 44 was chosen for this study in order to identify, select and rank the penetration of future network services. Composition of the panels Delphi is a group decision method used to investigate questions of high uncertainty and speculation. 45 It is critically dependent on the quality of knowledge captured. Therefore, a Delphi study requires highly qualified experts with thorough understanding and knowledge of the topic in question. The most experienced and knowledgeable persons regarding NGN services would be expected to be found among people serving the market with advanced telecommunications and media services (service providers) and professionals following these markets as either researchers or consultants (market analysts). In order to be able to poll any difference in opinion between these two categories of market players, two panels were established. The first was called the service provider panel, and the second was called the market analyst panel. A Delphi study does not depend on a statistical sample that attempts to be representative of any population. 46 What is important in a Delphi study is to recruit sufficiently qualified experts who have a deep understanding of advanced telecommunications and media services. The following main criteria were used to establish the panels:. The service provider panel was recruited from experienced, high-level managers in Norwegian telecommunications companies and regulation authorities. The companies ranged from large incumbent operators to smaller broadband service providers.. The market analyst panel was recruited from well-known analysts, researchers and consultants in Denmark, Norway and Sweden. An invitation letter was sent to a group of people knowledgeable in the field of tele-/ media services. The letter explained the research area of interest, the purpose of the research and the research method to be used. Twenty-four experts agreed to participate, 13 service providers and 11 market analysts. The problem of non-response was exceptionally low, as only one expert left during the study. Data collection and analysis method Data collection and analysis were based on the method provided by Schmidt (1997) 47 and Schmidt et al. (2001), 48 and were divided into three distinct phases. # Henry Stewart Publications (2010) Vol. 3, Journal of Telecommunications Management 5

6 Iden and Methlie Phase 1: Brainstorming Identifying services A welcome letter was sent to each expert by e- mail, in which they were asked to identify a minimum of six services that they expected would be offered in NGNs within the next five to ten years. A plain document template was attached for the experts to fill in. The two researchers worked independently to bring together the responses from the panelists. The two independently constructed lists were then jointly compared and reconciled by the researchers. Duplicates were removed, reducing the total number of items proposed to a compiled list of 65 services. The compiled list was circulated to all panelists for corrections, additions and validation. Three new services were proposed, which, after consolidation, resulted in a final list of 66 services. Phase 2: Reduction Preparing for ranking In the second phase, the experts were divided into two panels, 13 service providers and 11 market analysts, allowing each panel independently to pare down the number of services. The purpose was to narrow the list to a manageable number (a target of about 20 items has been suggested by Schmidt (1997) 49 ) so that they, in the next phase, could be meaningfully ranked. Each panellist received a randomised list of services and was requested to select at least ten services that they expected would be most important to be offered on future networks on a five to ten-year scale. One of the experts in the market analyst panel left the study during this phase, reducing this panel to ten participants. To narrow the list for ranking, services that were chosen as important by more than 30 per cent of the panelists were retained. Through this procedure, the panels effectively reduced the initial list of 66 items to a manageable size that reflected the opinion of importance within each panel. The market analysts reduced their list to 17 services and the service providers reduced their list to 21 services. Phase 3: Ranking The ranking of the selected services was done in the third phase. Here, panels ranked the services in order of priority, that is, the topranked services would be considered the most important. The panelists were asked to select and rank ten services from the list given to the panels. The reason for focusing on a limited number of items is that the reliability of ranking decreases with decreasing rank. 50 The ten selected services were then ranked from 1 to 10, where 1 was of highest importance and 10 was of lowest importance. Three ranking rounds were conducted. Basically, the number of ranking rounds should be determined by each panel reaching an acceptable level of consensus. To measure the degree of consensus among the panelists, Kendall s coefficient of concordance (W) was used. Using Kendall s W, one can measure the relative strength of the consensus, make a realistic determination of whether any consensus has been reached and whether the consensus is increasing as the panelists receive information about the mean rank of each service as data are collected from the panelists round by round. Since the panelists ranked ten out of 21 services in one panel and ten out of 17 in the other, each panellist left some of the items unranked. To calculate Kendall s W, a formula proposed by Schmidt (1997) 51 was used. The ranking process was stopped after three rounds although only weak agreement among the panelists in both panels was obtained. Only marginal improvements in W were reached by round three. To minimise bias ranking for the first round, the services to be ranked were provided in a different random order for each expert. Subsequently, the services were listed in the order of their adjusted mean value, that is, the mean value of a service was adjusted for the number of respondents selecting this service. For two services with equal mean values, the service with the highest number of respondents would be ranked the higher of the two in terms of importance. For each service, the mean value was adjusted for the number of panelists selecting the service for ranking. As consensus increased through the iterations, services that 6 Journal of Telecommunications Management Vol. 3, # Henry Stewart Publications (2010)

7 Penetration of services on future networks were not ranked by any of the panelists were treated as missing cases and deleted from the list. Finally, to measure to what extent two panels agreed on their rankings, Kendall s rank correlation coefficient (T) was calculated. RESULTS The NGN service list The first objective of this research was to identify the services that would be offered on the NGNs in a time span of five to ten years. Since NGNs are still in an early phase of development, and since there is a lot of uncertainty about what the market situation of NGNs will look like, such a solid list of services may be of great value. See the Appendix for a complete list of services identified. Since no already authorised grouping or categorisation scheme for network services had been found in the literature, the authors used a bottom-up approach where the individual services were analysed and then grouped by theme. Ten groups were formed, of which three were business-oriented (1, 2 and 3), six were household-oriented (5, 6, 7, 8, 9 and 10) and one group (4) concerned both areas. The groups, however, were not mutually exclusive. Services in the household-oriented groups may also be relevant for business, and vice versa. In the following, the ten groups and a noncomplete selection of services for each group are presented.. Work support services, including web-based computing, meta-information management and services for collaboration and meetings.. Logistics services, including services for quality control and tracking of goods.. Quality of service, including secure and prioritised communication, and online reporting of quality and service.. Communication services, including unified communication, mobile broadband, VoIP, open operator-neutral fibre networks and fixed-mobile telephony convergence.. Machine-to-machine services, including remote control of home functions and properties, intelligent buyer agents and remote meter readings.. Consumer services, including e-commerce and online banking, near field communication and home care services for elderly people via mobile devices.. Location and context-based services, including information about individuals presence and activities, and position and contextdependent services.. Social computing services, including life log, net-based socialisation and adventures in the virtual world.. Multimedia and entertainment services, including triple and multi-play, online gaming, family media centre and entertainment machines with sense and feel attributes.. TV and video services, including TV on mobile, TV on the internet, interactive TV, remote control of set-up box, highdefinition TV, real-time distribution of events and channel independent access to content. To illustrate the spread of the 66 services among the ten groups, Figure 1 has been provided. By analysing the complete list of 66 services, it was found that 12 services were more business-oriented, and 45 services were more household-oriented. Nine services have been defined as communication services and concern both businesses and households. As may be expected, the list contains a blended mix of services: services that are well established in today s legacy networks, services that are in an early phase of development and services that are futuristic. Those already established represent, as anticipated, the largest number, for instance online banking services. In the multimedia and entertainment services group, it was found, on the other hand, that a number of services were technically achievable, but the market penetration for various reasons was low, such as multi-play and family media centre. In the work support services # Henry Stewart Publications (2010) Vol. 3, Journal of Telecommunications Management 7

8 Iden and Methlie Figure 1: The spread of the 66 services among the ten groups[ed9] group, proposals such as web-based computing and meta-information management were still under conceptual and technological development, and may sound futuristic to many. As far as the authors interpret the suggestions from the panelists, no services are entirely new. The largest number of services relate to what have been termed consumer services. In this group are 14 services, which include: online ordering and payment for groceries and goods, online banking services, online formfilling for public services etc, which are services that are already available to most households, especially in industrialised countries, and are labelled e-commerce and e- government. The second largest number of services relate to TV and video services, with ten identified services. Many of these relate to innovations in television, such as real-time distribution of events in high-definition threedimension and hologram on TV. A third major group, with nine services, is communication services with services such as unified communication, Voice over IP and mobile broadband. Many of the services here have a technical flavour. Ranking of NGN services Tables 1 and 2 present the selections and the rankings round by round by each panel. As Tables 1 and 2 demonstrate, the majority of services selected by one panel for ranking were not selected by the other. For example, the service providers ranked mobile broadband and channel-independent access to content as their top two services, but these services were not selected by the market analysts. Conversely, the market analysts ranked webbased computing as their most important 8 Journal of Telecommunications Management Vol. 3, # Henry Stewart Publications (2010)

9 Penetration of services on future networks Table 1: Ranking results, round by round: Market analysts Services Adjusted mean ranks Rank Label Group Round 1 Round 2 Round 3 1 Web-based computing Multimedia cross-platform meeting systems Collaboration tools based on social networking and Web Secure communication over open networks Field mobile computing Real-time tracking of goods Mobile video and game platforms for business services Family media centre Remote control of home functions and properties Meta-information management Environmental surveillance over the internet Remote meter readings Electronic paper Prioritised communication in open networks Intelligent buyer agent Online reporting of service quality Online reporting of security management mc* Kendall s W *mc: missing case (not ranked by any panellist)[ed10] Table 2: Ranking results, round by round: Service providers Services Adjusted mean ranks Rank Label Group Round 1 Round 2 Round 3 1 Mobile broadband Channel-independent access to content Internet on handheld devices Open operator-neutral fibre networks Secure communication over open networks Voice over IP Interactive TV with personal video recorder (PVR) Real-time tracking of goods Online ordering and payment for groceries and goods TV on the internet, web TV Remote control of home functions and properties Remote meter readings Online banking services Near field communication services I. Ticketing and payment from mobile devices User-generated content Near field communication services II. Advertising and information services to mobile devices Multimedia cross-platform meeting systems Global broadcasters Field mobile computing Position-based services Family media centre mc* Kendall s W *mc: missing case (not ranked by any panellist[ed11]) # Henry Stewart Publications (2010) Vol. 3, Journal of Telecommunications Management 9

10 Iden and Methlie service, a service that was not included in the providers selection, and multimedia crossplatform meeting systems as their second most important, a service that was ranked low by the service providers. This supports the authors initial supposition that the two panels evaluated the penetration of future network services differently. By studying the 17 services ranked by the market analysts, it can be seen that these experts have primarily selected and prioritised services that are business-oriented: work support services, quality of service and logistics. As a matter of fact, of the ten highest ranked services, nine services are in these three groups, and six of them belong to the work support services group. In addition, the market analysts also believed that machine-to-machine services were important, although they were not highly ranked. The more technically-oriented services found under communication services and the more personal and private applications such as consumer services and TV and video services were not paid any attention by the market analysts. Of the 41 services associated primarily with households, market analysts selected only two services: electronic paper and family media centre. A similar analysis of the services ranked by the service providers shows a very different pattern. Of the six highest ranked services, four services were in the communication service group. Most of the ranked services, however, are household-oriented services: consumer services, multimedia and entertainment services, and machine-to-machine services. Only four of the 21 services ranked by this panel were business-oriented services, and these were generally of low ranks. Interestingly, services within the social computing services and location and context-based services groups were not ranked by either panel. By analysing the two lists (Tables 1 and 2), it is found that only seven services are common to both lists. In Table 3, these seven services are summarised in ranked order. This ranking is based on merging the two panels rankings of these services. Thus, there are seven services judged by the 23 panelists. The ranking is based on the adjusted mean rank, similar to the ranking of each panel above. Market players agreement The primary purpose of the Delphi method is to obtain the most reliable consensus of opinion of a group of experts. What is the level of agreement within each group (intra-panel agreement), and what is the agreement across the two groups (inter-panel agreement)? To understand to what extent the experts agreed on the relative importance of the various services, the experts rankings within each panel were compared statistically using Kendall s coefficient of concordance (W). Using W, one can measure whether consensus has been reached, whether consensus is increasing, and the relative strength of consensus. 52 As can be seen from Tables 1 and 2, the adjusted mean ranks decrease for the higher-ranked services and increase for the lower-ranked services, indicating that the level of agreement increases round by round. However, the final levels of agreement for both panels are weak according to the scale given by Schmidt (1997), 53 with W = for the market analyst panel and W = for the service provider panel. The Table 3: The ranking results for the seven services Ranking Services Group Analysts rank Providers rank 1 Secure communication over open networks Multimedia cross-platform meeting systems Real-time tracking of goods Field mobile computing Remote control of home functions and properties Family media centre Remote meter readings Journal of Telecommunications Management Vol. 3, # Henry Stewart Publications (2010)

11 Penetration of services on future networks difference in the value of W indicates a somewhat stronger agreement among the service providers than among the market analysts. The degree of concordance using Kendall s W coefficient for the merged panel of seven common services was calculated as 0.300, which again indicates weak agreement among all the panelists viewed as a single group. How about the agreement between the two panels? To evaluate the degree of similarity between the provider panel and the analyst panel in ranking the seven common services, Kendall s rank correlation coefficient (T) was used. The rank correlation coefficient for the two panels was calculated to be T = 0.143, indicating that the two panels weakly agree on their ranking of these seven services. This is confirmed by visually inspecting how the two panels ranked the seven services (Table 3). Only two of the seven common services were ranked among the top ten services by the service providers (rank 5 and 8), while six of the seven services were ranked among the top ten by the market analysts. Another interesting feature observed is that these seven services are distributed almost evenly in five of the ten service groups: 1: work support services (2), 5: machine-tomachine services (2), 3: quality of service (1), 2: logistics (1) and 9: multimedia and entertainment services (1). Interestingly, the first four services are business-oriented, while the last three are household-oriented. DISCUSSION AND IMPLICATIONS As anticipated, the two panels perceive the penetration of future network services differently, and it is thus difficult to determine which services will be most important. From the list of services generated in the brainstorming phase by all experts (see the Appendix), the two panels selected and ranked services (Tables 1 and 2) from very different service groups. While the service provider representatives chose their services from more household-oriented groups like machine-tomachine services and multimedia and entertainment services, the market analysts selected services primarily from the businessoriented groups. The difference between the two panels can be seen easily in Table 3. Here, only two services are ranked among the ten highest by the providers, while six of these services are among the ten services ranked the highest by the market analysts. It looks like the service providers believe that householdoriented services will have the highest penetration, while the market analysts have more faith in business-oriented services. The statistical analysis of the degree of similarity (Kendall s T) of the ranks given by the two panels of the seven common services confirms rather low correspondence between the two panels. It should also be noted that the consensus among the panelists within both panels is weak (Kendall s W). Several factors may explain these variations. First, the NGN is a broad term describing some key architectural evolutions in the telecommunications core and access networks that will be deployed in the future. There is no universally agreed definition of the NGN, and its evolutionary features make it open for existing services, emerging services and more future services. Furthermore, service is likewise a fuzzy term, and may be understood differently. In this research, services have been allowed to reside on all network layers, for some to span several layers and it is understood that some services are consumed by other services, thus making them invisible to the end user. Although the experts were initially provided with a description of an NGN, the experts identification, selection and ranking of services offered on NGNs were affected by their interpretations of the two terms. Secondly, the study was asking about events occurring in the future, within a time span of five to ten years. Inspecting the total list of selected services, many of these are services existing in use today. The minds of the panelists will be influenced by their daily working contexts, educational backgrounds and work experiences. It seems that service providers tend to prioritise services closely # Henry Stewart Publications (2010) Vol. 3, Journal of Telecommunications Management 11

12 Iden and Methlie related to their current business operations and thus give higher ranking to known services. Conversely, the market analysts are more focused on future applications. Furthermore, as the analysts earn their income by giving advice to companies this may explain their focus on business-oriented services. Also, it is not inconceivable that the service providers may have a shorter time horizon than the market analysts. These contextual factors may influence their choice of services and ranking, and explain variations between the two panels. Thirdly, the time span imposes great uncertainty on the panelists in both panels. Future services on NGNs in this perspective depend on many unknown variables, such as future sociological and economic factors, as well as new technological developments, applications and business models not easily and equally known by the panelists. This may explain both intra-panel and inter-panel variations. In summary, NGNs and services are fuzzy concepts, the panelists have various working contexts, and the domain is complex in terms of rapid technological developments. These factors may explain the variations found. On the other hand, the experts are among those who will bring the future NGN with its infrastructure and services to the market. The variations in background and interpretations have enriched these results by widening the scope of services under consideration. Implications for practice The results from this study are relevant for many network operators, service developers and providers, investors, standards bodies and regulatory authorities and may be used to understand the market and business requirements for successful adoption of services provided by future networks. Since a business model is service-specific, a prerequisite of designing business models for NGNs is that the services are known. This study reveals information about services to be offered on NGNs. The list of 66 services identified by panelists provides a reference. In addition, the different profiles of the two panels, market analysts versus service providers, and their different selection and ranking of services should be thought-provoking. Are the service providers too narrow-minded in terms of scope and time horizon? Perhaps the two ranking lists can be seen along the time dimension where the service provider list represents near-term services, while the market analyst list represents longer-term services. It is also worth noting the two highest-ranked services by the market analysts and the service providers, respectively, vis-a -vis: web-based computing and mobile broadband, two services that will change the working environment of end users in companies and households when fully deployed. Regulatory agencies will have to address the new challenges of competition, privacy and security in the service provider markets. Finally, web-based computing constitutes a new computing paradigm and will have effects on the education of information system specialists and application developers. Implications for research The panelists used in this Delphi study were experienced persons recognised as experts in the domain. There are two limitations regarding the sampling of experts: their geographic location and their age. To gain more general knowledge about future services in NGNs, a similar study should be carried out in other parts of the world. Furthermore, there are age variations with respect to mastering the new computer facilities. Therefore, it would be interesting to carry out a similar study with a panel of youths to see what services younger people see on the NGN. For the business models of NGN services, providers will have to develop new platforms serving applications that are driven not just by the characteristics of the service itself, but also by network effects that are either user or service-complement-driven. 54 Thus, for new services such as web-based computing on NGNs, research is needed on what the new business models will look like and what the new rules of competitive advantage will be. 12 Journal of Telecommunications Management Vol. 3, # Henry Stewart Publications (2010)

13 Penetration of services on future networks Furthermore, a number of regulatory issues arise from the technological changes in the NGN that will require research on new regulatory regimes. 55,56 CONCLUSIONS The aim of this study has been to explore the penetration of services driven by NGNs. First, a systematic procedure was used to elicit and define a list of 66 services organised into ten groups. Since the list is based on input from 24 experts engaged in telecommunications and media services, the list is comprehensive and well grounded. The list constitutes a valuable reference for the future NGN service market. Two panels, one consisting of ten market analysts and the other consisting of 13 service provider representatives, ranked services by a rigorous data collection method known as a ranking-type Delphi survey. 57 Two independent rank-order lists, one from each panel, were produced. As the two groups of panelists represent two distinctively different roles in the telecommunications market, the authors were correct when they first anticipated that their predictions would be different. Of the initial 66 services, only seven services selected were common to both panels, and they disagreed on the services ranking. It is therefore not possible, combining the views of the two panels, to nominate the future killer applications. If each list is studied separately, however, it is found that each panel has nominated one service with a mean rank far better than the others. The market analysts agree that web-based computing will be the most important service on the new network. These experts consider the new style of computing, where scalable and virtualised resources are provided over the internet, to be the most important network service for the future. The service providers, on the other hand, agree that mobile broadband will be the most important. These experts believe that this already popular technology for getting access to the internet will become the most important network service. Limitations of the study This study is based on a Delphi method with a limited number of experts. Subjects were chosen for their knowledge and experience in telecommunications and telecommunications services, and the authors do not claim that these experts constitute a representative sample. The Delphi method is one of the most popular forecasting techniques available, and has been applied in various disciplines, including technology, healthcare and marketing. 58 The method, however, is not without limitations and has been criticised for its methodological inadequacies. 59 One problem is how to measure expertise. Although the authors have been careful to establish panels with persons who have a thorough understanding and knowledge of the topic in question, there are no procedures for measuring and ranking the panellists level of expertise. Another debated question is whether group opinion is superior to individual opinion, and how to combine individual opinions. The authors found the Delphi method to be a suitable method for this study. Their purpose was to compose a rankorder list of services based on group opinion. Another methodological issue is the mode of communication between the experts and the researchers. , as applied in this study, is both a resource and a time-effective communication method, but also a narrow channel. The study was conducted within a Scandinavian context the experts resided in this region and their knowledge and perception of telecommunications, networks and services, as well as economic, political, social and regulatory factors, were based on this relation. A consequence of this is that the Scandinavian countries scored high on most indexes related to technology expenditure and penetration, for example, when it comes to households with broadband access, 60 which is likely to influence the experts perceptions and suggestions. References 1 Tachikawa, K. (2003) A perspective on the evolution of mobile communications, Communications Magazine, Vol. 41, No. 10, pp Hui, S. Y. and Yeung, K. H. (2003) Challenges in the # Henry Stewart Publications (2010) Vol. 3, Journal of Telecommunications Management 13

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(2008) Conceptual framework for services creation/development environment in telecom domain, 10th International Conference on Information Integration and Web-based Applications and Services (iiwas2008), in cooperation with ACM SIGWEB, 24 26th November, Linz, Austria, pp (quote at p. 325). 32 Barnes, S. J. (2004) The mobile commerce value chain: Analysis and future developments, International Journal of Information Management, Vol. 22, pp [ed27]. 33 Rowe, G. and Wright, G. (1999) The Delphi technique as a forecasting tool: Issues and analysis, International Journal of Forecasting, Vol. 15, pp [ed28]. 34 Story, V., Hurdley, L., Smith, G. and Saker, J. (2001) Methodological and practical implications of the Delphi technique in marketing decision-making: A re-assessment, The Marketing Review, No. 1, pp [ed29]. 35 Gupta, U. G. and Clarke, R. E. 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