Dire predictions
A competitive carrier's future view
By WAYNE WALLEY, Editor-in-Chief
Fables--like the one about Chicken Little, who was convinced the sky was
falling--come to mind whenever upstarts make bold predictions about the future, or
lack of one, for telecommunications industry giants.
With the advent of deregulation worldwide, monopoly carriers are under attack and
will no doubt lose market share in an environment of open competition. But William
Schrader, president and CEO of U.S.-based PSINet, isn't just saying the sky is falling
for these players--he says there will be no sky, no "telephone" companies, whatsoever
in five years. They will be called Internet service providers or whatever term is used in
the future, he says.
Such a statement sounds self-serving. PSINet is the largest independent commercial
Internet service provider worldwide. As a facilities-based data communications carrier
focused on the international business marketplace, PSINet has 400 points of presence
extending to 11 countries. PSINet began focusing on this area in 1989, long before
pundits were predicting the inevitability of data traffic surpassing voice.
Today, every carrier worldwide is taking data and Internet protocol telephony
seriously. "There's nobody in telecommunications who can afford to be outside the
Internet, so they must offer ISP-type services," Schrader says.
Schrader sees a change in attitude in the former dominant carriers, such as AT&T, BT,
Deutsche Telekom, France Telecom and NTT. They are not going to miss out on the
next great opportunity in telecommunications, he says.
"Phone companies missed the understanding of what cellular phones were; it took new
phone companies to get into that. Telephone companies missed the Internet," he
maintains. "Telephone companies are not missing voice over IP. They are on top of
this, so what you're going to see is the fastest possible change ever in the voice
industry."
He forecasts the end of usage-based billing, replaced completely by flat-rate pricing,
and a time when voice services will be "free add-ons" as part of data communications
deals. Switches for circuit-switched networks, he says, are "toast," dead.
"Companies like Lucent and Nortel and Ericsson will produce add-ons to existing
switches that extend the lifetime slightly," he says. "But in the end, those switches are
gone. Not a single switch working today will be alive in five years any place on earth.
There's no secondary market for that stuff." Jobs, particularly those to track calls and
audit trails, will be gone, he adds.
Schrader admits he might be wrong about his predictions--that is, all this could happen
even faster, say in three years. What would Chicken Little do? |
