Data Communications:Unleashing the Beast
The competitive local exchange carriers (CLECs) have a $105
billion--and growing--local market opportunity. That's growing largely
due to rapid increases in demand for second lines in residential markets
and high-speed data lines in the business market.
Of course, that's mainly driven by the popularity of the Internet and
intranets. According to Strategic Networks Consulting, Internet protocol
(IP) traffic will consume more than 90 percent of global bandwidth by
2003. Of the 80 billion minutes of U.S. network traffic in 2001, a half will
be IP, frame relay or asynchronous transfer mode (ATM), Boston-based
research firm The Yankee Group forecasts. Meanwhile, Cimi Corp.
opines that in the next century 80 percent of carrier revenue will be data,
yet data only will comprise 40 percent of network traffic.
In the pages that follow, X-CHANGE examines how the
telecommunications industry is positioned to realize that growth is a result
of the data communications boom.
Of course, the collapsing of communications equipment makes the move
to offer data services easier than ever. Vendors now offer multiservice
switches and other equipment that supports both voice and data, IP over
synchronous optical network (SONET) interfaces, routers and other
devices that support voice over IP (VoIP) in addition to bursty data, and
integrated access devices that allow voice and data applications to share
T1 connections.
A new breed of CLECs calling themselves "data-centric CLECs" or
"DLECs" has been born. That typically means CLECs--like Covad
Communications Co., NorthPoint Communications Inc. and Rhythms
NetConnections Inc.--that tie their own digital subscriber line (DSL)
equipment to leased copper pair from the incumbent LECs (ILECs) to
provide customers with high-speed access to the Internet or corporate
networks (see "The Slow, Steady Pace Of DSL"). Meanwhile, many
carriers are offering a variety of higher-speed links via frame relay, ATM
and virtual private network (VPN) connections. And many CLECs and
other telecommunications companies have purchased Internet service
providers (ISPs) to offer Internet access, web hosting and more (see
"Searching for Value").
At the same time, the incumbent telcos are stepping up their data
communications services activities, and cable companies are pushing
high-speed cable modem services to new markets (see "Leader of the
Pack").
With everyone moving into one another's lines of business--and more
carriers coming to market--there's a greater need than ever to differentiate
while controlling costs.
Today carriers with private IP networks ensure packet delivery by
over-provisioning bandwidth on those networks, which is the expensive
way to do it. Carriers need to deliver new revenue-generating services
while at the same time constraining their costs, so they can reap the profits
of these new services.
That's already starting to happen as a result of integrated access and
VPNs. And vendors are beginning to deliver a variety of equipment
designed to deliver personalized network services as customers and their
applications demand it (see "Chasing An Opportunity"). |
