That’s how fast change is occurring in the telecommunications industry. After food, water, and shelter, communication is arguably the fourth most important universal need. Hence, it’s no surprise that consumer demand for new services is high—and no stretch to say that trend will continue, no matter what economic blips occur.

A confluence of this increasing global demand and a technological shift toward open, off-the-shelf architectures is quickly transforming the sector, resulting in new opportunities for telcos and, of course, new challenges.

Bridging two worlds

One of the biggest challenges for telecommunications companies today is keeping one foot firmly planted in the “old world” while preparing for the new. Fixed-mobile convergence—the seamless integration of fixed-line and mobile telephone services, often accompanied by image, music, and video download options—is one way telcos are attempting to bridge the two worlds.

“Fixed-mobile convergence is an attempt by the wired-line carriers to hold on to customers in an era that’s increasingly dominated by wireless communica-tions,” says Robert Rosenberg, president of Insight Research, a telecommunications market research firm based in Boonton, New Jersey.

Line losses—when customers discontinue their fixed-line service in favor of a wireless plan—are increasingly diminishing the bottom line for telcos. On the flip side, intense competition in the wireless world is driving down prices, squeezing margins there as well. Even as the lines blur between wired and wireless carriers, both face a familiar challenge: how to cut costs and offer new services.

The widely-used Internet Protocol, or IP, offers a compelling way to do both. “Voiceover IP (VoIP) provides a much cheaper way to assemble and maintain a network, whether you’re on the wired or the wireless side,” says Rosenberg. “It’s very clear now that telco networks are increasingly IP-based, especially in the backbone, and that the endpoints themselves will increasingly be IP.”

New services, new risks

The migration to IP-based “next generation networks”—or NGNs—is not happening overnight. However, it is being accelerated by consumer demand for new services, such as file exchange and music downloading, streaming movies, and IP TV. While today these services make only minimal contributions to the bottom line for most telcos, they present a tremendous revenue opportunity for the future.

But along with new product opportunities and infrastructure cost savings comes increased risk. “IP-based networks are more easily compromised because there are more people out there who are familiar with the technology,” Rosenberg says. “The potential for security breaches or denial-of-service attacks—as well as the level of sophistication of the attacks—increases dramatically.”

To deal with these threats, telecommunications companies must first determine their potential impact on the business, and then decide what defense and remediation tactics to employ.

Security first

A company that offers an interesting perspective is du, one of the two major telecommunications providers serving Dubai and the United Arab Emirates. Launched in late 2005, du has had both the challenge and the advantage of entering the market in the middle of the shift to an IP-based infrastructure.

Defining and building a security infrastructure that would not become quickly outdated was one of the company’s top priorities—a challenge that fell to Walid Kamal, du’s vice president of technology security and risk management. “We had the opportunity to approach security from the ground up, which is not necessarily the norm in the telecommunications industry from what I have seen,” says Kamal.

Risk management is firmly embedded in du’s governance model. “We have a very systematic, ongoing approach to network security,” explains Kamal. “We identify business risks, prioritize them, and evaluate technology solutions that can help us mitigate those risks. When we want to introduce new products, sometimes we need to freeze the technology until we can mitigate the risk. After all, if you’re introducing a new product and you don’t have solid security, you will fail.”

In addition to traditional fixed-line service, du offers VoIP, IP TV, and mobile communications services. “The change toward next-generation networks has begun,” Kamal notes. “In some ways, we are already there. Nonetheless, regardless of the underlying technology, there will always be risk involved, and the fundamental principles of risk management don’t change.”

Kamal has divided his staff into three distinct domains: security technology design, architecture, and implementation; security operations/incident investigation; and policy, compliance, and audit. The company’s Security Operations Center operates around the clock to proactively defend against network attacks. To supplement internal resources, du has added Symantec Managed Security Services and Symantec Residency Services; the latter includes an onsite Symantec Resident Resource who helps to identify and remediate threats. “We need to make sure our dynamic environment is secure not only today but over the long term,” Kamal explains.

In addition to the above, du deployed Symantec Security Information Manager as part of its Managed Security Services rollout to automate the monitoring of its security environment. Symantec Security Information Manager offers a centralized view of log file data from devices such as endpoints and firewalls, allowing du to identify critical alerts within five minutes, versus up to one week using manual log-file analysis tactics.

“The ability to identify threats quickly was another critical criterion for our assessment,” Kamal comments. “We know we have to be very proactive and should have immediate turnaround and minimum response time if any security incident occurs in our organization.”

Managing billions of endpoints

Another trend driving security requirements in the telecommunications industry is the emergence of new, mobile, intelligent endpoints that blur the lines between the computer, phone, music and video player, and Blackberry.

“I don’t even know what a computer is anymore,” says Insight Research’s Rosenberg. “And it doesn’t matter. Protecting these endpoints and the data stored on them will be a challenge. The centralized management that we had in the days of the public switched telephone network (PSTN) is gone, and now what we’re trying to do is essentially manage billions of endpoints.”

To secure its endpoints and manage them from one central interface, du is in the process of consolidating its various endpoint security technologies onto Symantec Endpoint Protection 11.0 with Symantec Network Access Control. The Network Access Control option will allow du to ensure that any endpoint is compliant before allowing it to connect to the network. “This technology is under proof of concept now at du and will allow us to cut costs and reduce administrative time by standardizing on one technology for endpoint protection,” Kamal says. “This will also help us be more proactive in identifying security and risk issues as well as the needs of the business.”

Competing on uptime

While security is indeed a primary challenge in the telecommunications industry, gaining customers—and keeping them—is also paramount.

With competition fierce, especially in emerging markets, telcos are increasingly competing on availability of services. Any downtime represents lost revenue, lost customers, and a tarnished reputation.

At Swisscom IT Services, which serves Swisscom, the largest telecommunications provider in Switzerland, this is a priority for Bruno Kocher, head of enterprise storage services. “Availability of systems and data is becoming more and more critical for telecommunications companies,” says Kocher. Located in Berne, Swisscom IT Services also makes its storage and backup offerings available to other corporate customers with similar needs for high availability, such as banks and transportation companies.

To ensure high availability, Swisscom IT Services is using Veritas Storage Foundation HA, which includes Veritas Cluster Server for automated failover. The solution enables the company to make storage allocation changes on the fly, with no application downtime.

As an IT organization, Swisscom IT Services has been an innovator. The company maintains the largest blade server farm in Europe, built Switzerland’s first storage area network (SAN) earlier this decade, and was one of the first major IT providers to realize the management benefits of booting its servers from the SAN, rather than from local disks.

“We always have the latest technology, especially when it comes to protecting customer data and providing maximum availability for our customers,” Kocher says. “Because we have SLAs, if we had any sort of data loss, we would have to pay the customers for that loss. Also, aside from the financial impact, there would be damage to our reputation.”

To protect its customers’ data, Swisscom IT Services uses Veritas NetBackup to centralize backup-andrecovery operations across its Solaris and Microsoft Windows environments. “Telcos are very quickly going to have to be backing up a lot more data,” Kocher notes. “The data that Swisscom IT Services backs up for customers has increased by over 1,000 percent since 2002.”

Staying green, saving green

As data stores continue to grow and redundancy becomes more and more important, companies are challenged to deliver on the notion of “green IT” while still meeting business requirements. When a server is not critical enough to warrant a dedicated, passive standby node, Swisscom IT Services uses the N+1 clustering capabilities of Veritas Cluster Server to reduce hardware costs compared to a traditional one-to-one active-passive clustering architecture. The company is also investigating ways to improve its storage utilization and keep power costs in check.

“Storage tiering is becoming more important as companies try to reduce costs to stay competitive,” Kocher explains. “For big disks, hierarchical storage management is the future. Right now, we’re looking into how Symantec Enterprise Vault can help us reduce our storage costs through data deduplication and archiving. Companies can no longer afford to keep non-active data on tier-one storage—the pressure on margins is too great.” This is increasingly important as telcos compete with Internet content providers like Yahoo and Google for some services, he adds.

Finding new revenue streams

Amidst the frenzied competition and margin pressure, new revenue opportunities are emerging for telcos. Many are already generating revenue by offering new services such as managed security services, online backup and archiving services, and software-as-a-service (SaaS) offerings.

“Telcos will increasingly be partnering with other technology and service providers such as Symantec to come up with bundled solutions that provide a high level of security,” Rosenberg quips.

Accurate, efficient reporting across multiple systems is a must as telcos begin to offer these types of hosted services, Kocher observes. “We need to provide an accurate receipt for the customer—how much storage they are using, and how we’re charging for that,” he says. “It’s becoming less and less effective to have various reporting tools for different platforms. It must be an independent layer between all the technologies.”

Swisscom IT Services, for instance, offers a hosted online backup service for Swisscom’s small business customers. “We do chargebacks to Swisscom, and they charge the end customers,” Kocher explains. “We’re just getting started with this service.”

To provide up-to-date data for daily chargebacks, Swisscom IT Services uses Veritas Command-Central Storage. “Veritas Command-Central Storage gives us the ‘big picture’ of our storage environment,” Kocher says. “We always have the latest information on storage utilization, free disk space, and system status without having to check the individual systems.”

Kocher is currently evaluating Veritas Backup Reporter to further enhance chargeback efficiency. “At a glance, we’ll be able to see the status of each customer,” he says. “We’ll be able to improve our service-level reporting and chargeback based on backup volumes for each of our internal customers.”

Keeping pace with change

While that picture phone might not be in your kitchen yet—or in your pocket—the end result of the current turbulence in the telecommunications industry will be a richer, more satisfying user experience. Companies that are able to provide that experience securely, reliably, and at the lowest cost will win.

“Regardless of whether you’re a fixed-line carrier or a wireless company, IP completely changes the nature of the telecommunications equation, especially on the profitability side,” Rosenberg concludes. “Telcos are going to have to get leaner and much, much meaner in order to survive.”

Ken Downie is a writer at NAVAJO Company. His work has appeared in Business Finance, Internet World, and Business Credit magazines.