From the Ascend Thread - Article in favor of ATM
To: djane (47052 )
From: djane
Sunday, May 17 1998 7:03PM ET
Reply # of 47133
5/15/98 America's Network article. ATM is the carrier's silver bullet
[Nice article for ASND/NN]
americasnetwork.com.
Hard to beat. ATM is the carrier's silver bullet.
Robert Rosenberg, May 15, 1998
Data communications will vastly exceed the voice
market in terms of bit bandwidth on the public switched
telephone network (PSTN). Most carriers will be forced to
use asynchronous transfer mode (ATM)-based networks to
handle the complexity of mixing of data and voice sources
and merging them onto a protocol that can be expanded to
higher speeds. ATM gives carriers the ability to handle the
flood without having to revamp their entire network in the interim, and ATM is
the only protocol that has these characteristics. Gigabit Ethernet and frame
relay are not ready to deal with the total traffic growth.
The explosion in ATM traffic is not going
to come from corporations or individuals
ordering ATM service directly. Growth
will come from the carriers themselves.
Crossover of voice and data traffic on the
PSTN and the continuing extraordinary
rise in data traffic has been confirmed for
between 1999 and 2000. Overall growth
in demand for data communication will
come from numerous sources including
Web-based information downloading,
e-mail and file transfer. But with the
advent of higher speed access technologies, services such as streaming audio,
streaming video, audio conferencing and video conferencing will represent
substantial demand for Internet services. This will force carriers to adopt ATM,
as it gives them a way to readily merge their existing frame relay traffic, systems
network architecture traffic and Internet traffic onto a single network that also
carries their voice traffic.
What does such a migration mean for the voice network infrastructure? We
believe it is rapidly approaching obsolescence. Within three years, it will be
more cost-effective to start converting voice traffic to ATM than to continue
maintaining separate networks. Since ATM has the added capability to only
send cells when speech is taking place, this will further reduce the total voice
demand on the network, leading to the elimination of the separate long-haul
voice network during the next decade.
Our analysis flies in the face of the conventional view that the existing networks
will continue to be used and ATM will handle the growth. However, ATM
networks will be vastly cheaper to operate than equivalent circuit-switched
networks. Newer long-haul carriers with high-capacity fiber and dense
wavelength division multiplexing (DWDM) gear can handle voice traffic at
dramatically less cost than toll carriers which have to recoup investments in
digital voice switches. The best example is Qwest Communications (Denver),
which is building a nationwide network and has no substantial investment in toll
switches. Look for the toll carriers to start writing off their network
infrastructure (particularly toll switches and transmission crossconnects) within
two years to stay competitive.
With this growing ubiquity of ATM networks comes the opportunity for
carriers to sell ATM services to corporate clients and lower level carriers such
as Internet service providers (ISPs). This could cause the market for frame
relay to reach its peak within two years. By the time this occurs, this added
traffic will be a small part of the total demand on the ATM networks. Hence,
carriers should be able to handle any rapid increases in demand, and yet offer
these services at very competitive rates. The cost of bandwidth will drop
precipitously over the next few years as competitive carriers' carriers light up
their new fiber networks.
The advantages of ATM networks are hard to beat. The big issue is that all
future networks, be they ATM or other formats, will have dramatically lower
cost structures. Much confusion about the future of networks is fomented by
those who want to retain the status quo. But old network approaches are
obsolete, and assumptions about investments are likely to be short-lived.
Governments will have to find new ways to accomplish their social engineering
objectives because the ubiquity of new services will not support artificial pricing
structures like the present telephone tariffs.
Traditional pricing approaches will wither, but what will replace them is
unclear.
Robert Rosenberg is president of The Insight Research
Corp. (Parsippany, N.J.), which provides comparative
market research and competitive analysis. Information on
Insight's recent work in OSSs can be found at
www.insight-corp.com.
May 15, 1998 table of contents
Copyright 1998 Advanstar Communications. Please send any technical comments or
questions to the America's Network webmaster.
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