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To: llwk7051@aol.com who wrote (4589)	12/27/1999 11:28:00 PM
From: quartersawyer	Respond to of 13582

From: Ruffian Friday, Dec 17, 1999 10:02 PM ET Reply # of 4590 Firms Tout Business Case For IP Networks By Peggy Albright A cost-benefit analysis that justifies a transition to next-generation networks has provided a feast for thought. Vodafone AirTouch plc and Nortel Networks together released a business case for an Internet protocol core network that they say carves a path for deployment sooner than later. If correct, this position could spur the industry to transition systems from circuit-switched to packet-based architectures. And that is precisely the objective proponents had for releasing the study at the CDMA Americas Congress in San Francisco, according to Craig Farrill, chief technology officer at Vodafone AirTouch. The study comes at a time when infrastructure providers and carriers are waiting to complete testing on the first step toward third-generation services. Second-generation networks are still relatively new, interim steps to 3G are costly, the effectiveness of standards has yet to be determined and the rapidly evolving nature of the technology has so far inhibited would-be pioneers from committing to an early buildout. The study evaluated the costs and benefits of transitioning a specific but unidentified Vodafone AirTouch network in the United States to an IP core architecture. The secret market has a half-million customers. The key financial indicator used in the study was how much it costs to send data through a network. Landline systems, Farrill says, can transmit a megabit for a penny, while it currently costs 37 cents on cellular or PCS systems. “What we're after is comparability with landline,” Farrill says. “If we can get the premium for mobility to be very small, we'll migrate minutes off landline at a huge rate.” Using demand projections provided by Analysys, Farrill justifies the need. The firm projects that global telecom voice usage per month will rise steadily through 2005. But around 2003, multimedia usage will begin increasing and at a drastically fast rate, practically doubling voice usage by 2005. Such change in usage will coincide with--and help force--a shift in the wireless business paradigm, from one of declining voice revenues to one of increasing overall net revenues beginning in 2003. The shift finds the increasing net revenues created by information services traffic. This will occur in CDMA as customers are increasingly using 2.5-generation technologies. In the single AirTouch market under examination, Nortel reduced operator costs to 5 cents a megabit by installing an IP network and Internet-style operations and maintenance functions. Adding 3G air interface technologies reduced these costs to 4 cents by 2004. Farrill says, “It encourages us in terms of accelerating our transition to an IP core network.”