By his own admission Hugh Bradlow of Australian operator Telstra is a CTO with a difference. Whereas many are distinctly hands-on, Bradlow says that he enjoys more of an exploratory role. “I’m what I would describe as an American style CTO,” he says. “[It’s] a strategic role, about emerging technology strategy. If you like, I explore the future, and then [the engineers] implement it.”

The advantage of this approach, Bradlow says, is that it enables him to engage with the larger challenges that affect network traffic, of which there are many. One of the primary issues is that, for an increasing number of people, the cellular connection is now the primary means of accessing the internet, meaning that the telco, rather than the traditional ISP, is their main gateway to the web. The fact that subscribers consider the mobile network a workable substitute for fixed broadband is a great achievement for the mobile industry. However, by the same token the increase in traffic is placing heavy burdens on the networks, and the cellular networks are not always the most efficient option.

“When you’ve got media-centric broadband traffic, it’s not bursty in the same way that web traffic is, so you can’t statistically multiplex as much traffic onto low bandwidth links as you can with web-centric traffic,” Bradlow says. “And that means that you have to start scaling up the infrastructure much more radically. That really is much more affordable to do with fixed infrastructure. So if your customers are consuming a lot of high definition video on demand, which is the way the market it moving, then mobile broadband is not a substitute for fixed broadband.”

So when mobile network data traffic is web-centric, as in browsing web pages, and checking emails, the cellular network is able to cope. But to cope with media centric traffic—video streaming—serious investment in cellular infrastructure and spectrum is required. “You’ve got two choices,” Bradlow says: “Either you end up with a very expensive solution, or you have to restrict the type of video bandwidth that users can avail themselves of.”

So as Bradlow himself puts it so succinctly, when it comes to providing access to online services, “Who pays?” Much of the data that users tend to access these days is generated by one of the global internet giants that have come to dominate the internet landscape in the past few years, such as Google, the video site it owns, YouTube, and Facebook. But what vexes many network operators is that, while they are putting in the heavy investment to enable users to access these sites, it is the large internet brands, rather than the operators that are reaping the benefits.

“I think the short answer is that the payment structures will have to change, as the current model isn’t sustainable”. Bradlow delves a little into the history of the way things are. “One of the problems is that payments in the internet world are based on peering, an antiquated system dating back to the pre-dawn of the internet time.”

In light of this, he says: “There has to be some rebalancing of how payments are being done in the internet world. How that’s going to be is still not clear. All the debates around net neutrality kind of miss the central points around the need for investment to sustain the ongoing growth of the system.”

He gives short shrift to those who hold the concept of net neutrality dear as idealists that have little grasp of the harsh realities of the situation. “This is going to be an ongoing debate, but it gets clouded by internet bigotry, by what I call quasi-religious belief that everyone is entitled to get whatever they like for nothing—which seems to me a sort of internet religion.”

One way forward is the introduction of pricing structures that will see users paying for different levels of service. “I think that one of the key issues going forward is the notion of Quality of Service and the notion that people are prepared pay for better quality of the delivery of their services,” Bradlow says.

Of course this has been debated for some years now, but Bradlow believes that the rollout of LTE networks and the flood of traffic that compatible devices will enable will bringing the issue to a head sooner rather than later. “I think it will play out fast. I think over the next decade if we continue with the current trajectory then either the networks will become much less effective, or users will have to pay a lot more. And ultimately the cost of the Googles and the Facebooks will be passed onto the end user. This may be the right answer, I can’t say for sure—but the internet companies should pay as they are deriving value from the system.”

But while Quality of Service and net neutrality issues are still to be resolved it’s clear that that writing in on the wall for uncapped data tariffs. “I think what’s happening in the developed world already is that we’re starting to see bandwidth caps being introduced, which is something we had since the beginning of the internet in Australia.”

This tallies with the views recently expressed by Ovum telco strategy analyst Nicole McCormick, who said in a report comparing LTE tariffs that operators should move away from unlimited data packages as soon as possible. “While LTE delivers video more efficiently than 3G, operators offering flat rates for LTE could quickly overstretch their LTE networks and find themselves having to invest more than expected to alleviate this congestion,” McCormick said.

However, this isn’t actually the issue that gives Bradlow the most cause for concern. His most pressing problem is the threat of carrier commoditisation and what he might do to avoid it. When carriers become mere utilities they become susceptible to price gouging and increased churn so Bradlow is looking at a number of areas, including the delivery of cloud services, unified communications and media on demand.

“There’s a definite advantage in taking cloud services from the provider of the network,” Bradlow says, adding that, for on demand video, Telstra has won the rights to show all live games for the Australian rugby leagues delivered via IP and accessible via a video-on-demand set-top box called the T-Box. Bradlow says that Telstra is also looking at way of using Near Field Communication and the concept of Connected Home, to give users some genuinely useful ways of exploiting the network.

Bradlow says that operators need to alter their mindset, to change the way they view themselves in order to maintain success. “We want to be a service provider in the true sense of the word. Our objective is to connect people to technology, which is really what service provision is about. We’re no longer [just] network operators, we’re service providers.”

Hugh Bradlow will be a speaker at the Broadband World Forum taking place at the CNIT, La Defense in Paris, France on the 27th-29th September 2011.