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Technology Stocks : ATM vs. Gigabit -- Ignore unavailable to you. Want to Upgrade?

To: George Dawson who wrote (55)	5/19/1998 11:30:00 AM
From: Kenneth E. Phillipps	Read Replies (1) \| Respond to of 63

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. \| Previous \| Next \| Respond \| View 2 replies to this message Quotes - 100-Day Chart - News - Profile - Earnings - Discussion - Communications View SubjectMarks Bookmark this Subject Ascend (NASDAQ: ASND) Time: 11:04AM Last Trade 45 11/16 Change + 1 7/16 (+3.25%) Bid 45 5/8 Ask 45 11/16 Volume 01,759,9000 Prev.Close 44 1/4 Open 44 3/4 Day Range 44 11/16 - 45 7/8 Last Tick 0Up0 Avg.Volume 06,487,5000 Discussion \| People \| MetaCrawler Subject Titles Only Full-Text Messages with Links Send questions and feedback to webmistress@techstocks.com To link to this reply, use the following Location: Terms of Use