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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Raj who wrote (51709)	8/6/1998 12:39:00 PM
From: bucky89	Read Replies (1) \| Respond to of 61433

However, here's the million $ issue: The most recent research that I came across points to a growth in data traffic between 200% to 400% a year and accelerating...implying an exponential growth function in the near term. Extrapolate what happens when you get an order magnitude increase in traffic due to xDSL and cable modems at the edges. Contrast that to the cognoscenti suggesting a 8 to 10% growth in voice traffic. If you were QWEST, Level3 or anybody wanting to capitalize on this "real" growth in data (i.e IP) traffic, what kind of a backbone would you build. The prudent decision will be applying the 80 20 or 90 10 or 99.99 Limit->0 rule. The business decision would be to build an infrastructure that optimizes the flow of the majority IP traffic. Yes, this is a well-understood trend, that voice will represent an increasingly smaller share of overall networking traffic. But that doesn't mean you can ignore voice. Voice is probably the most important type of traffic. Quality expectations for voice service are much higher than for data, and people will pay much more for quality reliable voice service. If your data-optimized network cannot prioritize voice traffic and give it the quality that customers are accustomed to, I doubt you will get the most profitable corporate customers. They will stay with AT&T, MCI, and Sprint. As of today, IP cannot give voice the quality and reliability it needs. ATM can. That may change in the future, and QWEST is betting on that. But until IP QoS becomes a scalable reality, ATM is the only usable answer as far as integrating voice and data. One more thing about QWEST--in order to fund their network buildout, they're having to sell an awful lot of bandwidth to competitors as well. I don't think QWEST will have a competitive advantage, because they are selling that advantage (gobs of bandwidth) to their competitors. I think in the end they will become a big carrier with gobs and gobs of bandwidth, but no customers. bucky89