Supercomm experts look for silver lining

ATLANTA– This year’s Supercomm attendance is expected to drop by as much as 30 per cent, but telecom executives haven’t abandoned all hope for the industry’s future.

Mixed emotions surfaced during a panel discussion on Wednesday entitled “Advancing to the New Network: Winning Solutions.”

Panelists still felt the pains of the downtrodden telco economy, but were buoyed by the range of new applications and potential new revenue streams.

BellSouth chief technology officer William Smith, who moderated the panel, was a voice of conditional optimism: The industry can thrive if it proactively makes the changes that technological advances are leading it to. These advances are well documented, he says. They include transitions from electrical to optical, narrow band to broadband, single frequency carriage to wavelength and dense wavelength division multiplexing and from circuit to packet switching. The value inherent in these new approaches, he says, can be unlocked by an integrated operational support systems.

The goal and trend, he says, is use multiprotocol label switching (MPLS)–a set of standards aimed at providing increased control over the packets traveling on an IP network–to provide this management. This will allow greater overlap and, hopefully, greater efficiency between the separate wireless, broadband and data networks most carriers must now support.

Susan Spradley, the president of carrier voice over Internet protocol (VoIP) for Nortel Networks, based in Brampton, Ont., is an optimist about the future of the carrier networking business. She says that today overall market conditions in Canada are not materially different than those in the United States.

Subtle differences in markets should be paid attention to, she says. For instance, service offerings in Montreal should be in both French and English.

A key question–at least in the United States–is regulatory. “A lot depends on how we get the rules written, and the resulting deployment of capital,” Smith says.

Clearly, Michael Frendo, the vice president of voice technology for Cisco Systems Inc., emphasized the network’s potential. He noted that the business on the enterprise side had leveled off and was even rising. The reason, he said, was that the new nature of the network tends to transfer spending from the public network to the corporate enterprise. For instance, deployment of voice gateways enables voice over Internet protocol (VoIP) to be used by many companies on their intranets to connect branch offices. This is money that formerly accrues to service providers.

This transition is also apparent in the growth of IP virtual private networks (IP VPNs). The upside is that IP VPNs can do what private line connections can do–and in addition support a wide new array of applications that are not as easily coordinated in traditional telephone network scenarios.

Frendo looks ahead to advanced services such as consolidated pagers/voice mail boxes, advanced distance learning and video conferencing. “The infrastructure to do that is key…It’s hard to provide these things on separate networks.”

The technology just keeps coming. This, according to Peter Knook, Microsoft Corp.’s vice president for network service providers, means that service providers and enterprises must be willing to adjust quickly. “Agility,” he says, “becomes the key factor for success in the future.”

To Knook, the key new technology is extensible markup language (XML), an emerging Web creation tool that enables packetized materials to be categorized, interrelated and aggregated in ways far deeper than the tools available in HTML. XML, he says, will drive change. It will enable, for instance, computers to carry out complex interactions with each other without human intervention.

Three elements of the Internet have become apparent, says Sean Maloney, an executive vice-president for Intel Corp.

The first is that the technology underlying the increasing power of the Internet and other computer-driven networks will continue to evolve. Indeed, the technology may be accelerating. Generations of microprocessor technology are measured in the spacing between components on a chip. Historically, Intel could only see two generations out. Now, he says, the company has clearly identified what the next four generations of chip technology will look like.

Maloney’s second point is that changes to the Internet will be evolutionary, not revolutionary. This is true simply because networks tend to stabilize as the number of users increases–and usage of the Internet continues to rise at a blistering pace.

Finally, Maloney says, it is clear that increasingly innovation and traffic will happen outside the United States. Indeed, he says, Asia passed the U.S. as the predominant user of the Internet six months ago.

The paradox that service providers and enterprises will have to confront is that demands will increase–but that the new technologies will cause revenues to shrink on a comparative basis. The result is draconian but necessary–companies must learn to do more for less. George Nolen, president and CEO of Siemens Information and Communications Networks for the U.S., said that revenue per megabyte of information trafficked will shrink by 90 per cent of today’s figure by 2004. The key, then, is efficiency. Siemens has realized this, he says: In some cases, it has helped service providers cut network elements by 80 per cent, operating expenses by 70 per cent, increased revenue per user by 20 per cent and network utilization by 15 per cent.

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