I think we will go through a crisis of some sort before we find a solution to this. Meanwhile, telecommunications companies will innovate as much as they can within the parameters of the regulations.
The Innovative Telco
S+B: What kinds of innovations do you see as critical for telecom companies to experiment with?
LOMBARD: Let’s start with Quadruple Play, which is our response to convergence. During the past 15 years, we had to split up the services we delivered — between the fixed line, Internet, and the various mobile lines. It was a nightmare for customers; they pay different rates and have different contracts for each service. In France, regulation did not allow us to link these services, because that was perceived as an unfair competitive advantage.
Now we are on our way to consolidating all these services. Soon, our customers will get packages that incorporate everything in a flexible way. They will carry their Internet access from office to home to a house they’re visiting, and to pay for all their family mobile and landline calls with a single arrangement. It will be simpler and cheaper for them, and for us it will be better, because we can optimize the network. Any voice call may travel on mobile lines or conventional landlines; sometimes on Wi-Fi; and sometimes on some more advanced system that we haven’t yet established.
This in itself will solve much of our capacity problem, because in each situation people will use the most efficient system. The present situation, where people use mobile phones at home, is stupid. It uses up the wireless phone frequencies, while the fixed line remains empty. If you want to optimize, you would rather be flexible, connecting through Wi-Fi and packet switching [Internet protocols], where the quality is better.
S+B: What other innovations are significant?
LOMBARD: We introduced our own content with our sports channel. Of course, this is expensive, but we can provide a lot of new services. For example, if customers want to focus on some part of a game or to rewind, they can do it themselves. We also offer a channel broadcast in 3-D.
We have not publicized our business-to-business service, but we have targeted big corporations more aggressively than the individual consumer. Voice over IP was operational with all our big networks five years ago. Videoconferencing is in our package for corporations.
We have made many efforts in the health sector. Innovation here is complex, because there cannot be any failure in the system. Very simple systems must be used by medical people, who are not necessarily technicians. There must be a lot of R&D behind this. We have worked with a manufacturer of terminals to introduce electronic terminals near hospital beds, on which patients can watch TV, but the most important part is the data it shows about the patient: medical imaging, the health records, and so on. The medical staff don’t have to go to another part of the hospital to look at the data. It took two years to develop and stabilize this system, incorporating experience from early users.
S+B: What role will France Télécom play in providing more fundamental Internet B2B services? Will you be competing with Google and Microsoft on this?
LOMBARD: We are proposing cloud computing services, which we developed with another company on our network for the big corporations. This puts us already in competition with the companies you mentioned. Yet the sort of computing proposed by all the different players is very different. We have tried first to understand the basic needs of our big corporate customers, to create very simple services that clearly improve day-to-day operations. We are not going after sophisticated systems at the beginning because the leading customers are afraid of our expanding too quickly in this area.