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Technology Stocks : Lucent Technologies (LU)

LU 2.370

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3:59 PM EST

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To: jach who wrote (4981)	11/17/1998 1:47:00 PM
From: The Phoenix	Read Replies (1) of 21876

<once all voice traffic is translated into packets,> that'll be a long time from now! but why would one want to convert all voice traffic to packets? and what's the benefits? This is a basic question and if you don't understand this then you should do a bit more research. (sorry to be blunt) Packet based environments provide better bandwidth utilization and better flexibility. SP's will be able to support more users using less bandwidth than traditional circuit switched environs. Furthermore, these same SP's will have to build packet based networks anyway in order to support tomorrows "internet economy". So, in order to reduce operations costs these SP's will drive to support all their traffic on one network - the data network. Data traffic already is far greater than voice traffic and by 2000 voice traffic is expected to use less than 10% of all bandwidth. There are some key points in this area that are fundamentals or basics: 1. Carrier voice quality requires certain bandwidth no matter we're dealing with packet or circuit mode. Not true. Look at today voice compression algorithms. Even AT&T is using compression. Furthermore, as I said before, if you're using a packet based environment bandwidth is only used when voice packets are acutally traversing the network as opposed to cicuit switched where bandwidth is used for the duration of a call. 2. One of the key advantages is the ability to use empty voice slots for data as not all voice circuits are busy all the time. 5Es can provide tremendous flexibility in doing this because it's the focal point that can decide which path to give the traffic to, circuit or packet; and if there are empty voice slots, data traffic such as frame relay, PPP and then even the 19$ Internet traffic may get more bandwidth. See that as a freeway (the backbone links) that is being fed by VIP lane (voice) and all other lanes (metered). When VIP traffic is thin or not there, the metered traffic can go at a faster rate. 5E's are on their way out. LAN based PBX's are the future. 5E's can free up cicuits when a voice call is not active but they can not do this on a packet by packet basis. So, if I call you and am not talking (put the phone down for a moment)..or even between words...I'm still using the circuit and bandwidth in a circuit switched network. With a packet based network spaces between words are used for other traffic. This improves network utilization by more than two-fold. Finally, it should be pointed out that the "new world" networks will be packet based - even LU realized this. LU will need to carve out a low cost approach to deliver end to end multiservice IP networks. ALthought Packetstar is an interesting product LU's current strategy of attempting to maintain legacy 5E's will fail due to high cost's associate with supporting these ancient platforms. Carriers are looking to move to packet based environments - period. LU's NEED to maintain their circuit switched revenue stream will slow them down making it difficult for them to compete effectively long-term. OG

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