The way we view telecom today will be thrown out the window tomorrow. As the competitive landscape for service providers gets smaller, the window for innovation at the customer level is widening.
Research
New Jersey has become a hotbed of telecom activity, both on the innovation side, where concepts for faster, more reliable Internet access are developed, and on the provider side, where telcos are working steadfastly to give consumers what they want tomorrow today, putting concepts into practice.
In fact, some R&D budgets are topping the billion dollar mark for many companies. Lucent Technologies, Murray Hill, earmarks roughly 12 percent of its revenue for R&D annually, which translates into about $292 million for this year. Already in 2005, Verizon Wireless has invested $138 million in network enhancements in the New York Metro area. In 2004, the company invested a total of $475 million in its New York Metro network. Its nationwide budget for research was set at more than $5 billion in 2004.
Roseland-based Cingular Wireless, which has become the largest wireless service provider in the nation, thanks to its acquisition of AT&T Wireless, puts its budget in the "billion dollar range" for investing in new cell sites and upgraded technologies nationally, says Cingular Spokesperson Ellen Webner.
Telcordia Technologies, Piscataway, plans to invest a significant amount of money and perform R&D for its government and commercial customers. in these cases, it will help customers create either new knowledge or new products, says Andrew Drobot, senior vice president, applied research at Telcordia.
The Art of the Deal
When it comes to deal-making, telecom is making headlines. Verizon will apparently gain the bigger foothold in the long distance carrier market that it has been hying to get for some time now. At press-time, MCI accepted an $8.5 billion offer from Verizon to acquire the company.
However, this was not without the drama of an 11-week bidding battle between Verizon and Qwest Communications.
Qwest made an offer, Verizon made an offer. just when it looked like MCI was ready to talk strategy with Verizon, Qwest came back to outbid Verizon by offering a higher price tag. When the interviews for this article were initially conducted, Verizon executives did not want to speculate on the outcome, but they were very optimistic for a win.
According to Verizon New Jersey President Dennis Bone, Verizon would like to acquire MCI to further its small footing in the long distance market and gain access to MCI's national and international Internet backbone. Outside analysts' reports noted that while Qwest's offer was very lucrative, Verizon could be the better choice, as it is a strong household name, has more money in the bank (about $4 billion in cash, analysts say) than Qwest, is less likely to go bankrupt and customers will more likely appreciate becoming a Verizon customer over Qwest, which is significantly smaller than Verizon.
Other deals of note for New Jersey, include the $16 billion acquisition of AT&T by San Antonio-based SBC Communications. At press-time, SBC has not made an official announcement on what will happen to AT&T locations in New Jersey, but facilities such as its Global Network Operating Center in Bedminster are key reasons why SBC wanted to acquire the company, according to an AT&T spokespeson.
Verizon, however, is moving into AT&T's former Basking Ridge headquarters. The move brings with it more than $127 million in new state income taxes.
Earlier this year, Telcordia Technologies was acquired by private equity firms Providence Equity Partners and Warburg Pincus.
The Next Big Thing
"There is action in the wireless/mobility space. As cell phones are becoming more capable, people will want to get the world on their phones," says Lucent's Jeff Jaffe, president of Bell Labs research and advanced technologies. As a testament, the wireless market has seen healthy growth and has not been affected by the telecom slump of recent years.
"We added more customers than anybody else and lost the least," says Verizon Wireless spokesperson David Samberg. On the wireless side, providers are focusing on a number of solutions with hi-speed wireless access coming in at number one. Verizon Wireless has introduced new Evolution Data Optimized (EVDO) technology in the New York/New Jersey area. EVDO provides broadband access speeds at up to 2Mbps over wireless networks for use in both laptops and handheld devices. in just three months since the launch of V-CAST, Verizon Wireless broadband multimedia service, and a little more than six months since the company launched BroadbandAccess laptop and PDA connectivity for business users, customer demand is the driving the expansion of wireless broadband service across the New York/New Jersey Metro area.
"We just launched EVDO and V-Cast. Now we'll see what developers are going to do with it," says Samberg, hinting that future applications could include using cell phones as MP3 digital music players. Users would be able to download their favorite songs.
Sprint which plans to merge with Nextel, is already offering a wide variety of phones that allow users to: listen to stereoquality music; take, share and print quality photos; and view the latest video content from nationally recognized brands in the news and entertainment industry at up to 15 frames per second, explains Jim Robinson, Sprint public affairs manager. The service has continued to grow, Robinson says, with Sprint now offering 17 channels of video content on demand. Later this year, Sprint is expected to launch EVDO.
By acquiring AT&T Wireless, Cingular and AT&T customers, "now have access to hundreds of new cell sites because we use the same technology," explains Cingular Spokeswoman Ellen Webner. Similar to Verizon Wireless, Cingular has introduced EDGE for super-fast wireless Internet access and other 3G (third generation) services like streaming media and audio at speeds up to 130Kbps to about 200 million people.
Bringing it Home
Hi-speed access is also a top priority on the wired side of telecom. Making it all possible for both New Jersey business and residents is the fiber-to-the-premise (FTTP) application.
Verizon has already wired much of the state with fiber optic cable and plans to offer New Jerseyans bundled voice, data and Internet services like a cable company.
"This is a significant, major force that is reshaping our industry," says Verizon's Bone. "To make sure our domestic telecom business is a growth business, we had to make some decisions and developed an all-fiber network. We have the systems and the culture to make this a great tool in the customer's hands."
While Telcordia also supports FTTP applications, the company is focusing on a new service platform for converged networks, which it calls ONSP - Open New Services Platform.
"This should make some of the futuristic services that Telcordia has thought about for years, actually possible. Moreover, it should induce large service providers to offer much more tailored offerings, which appeal to either small or large groups, that have very specific needs in a sustainable way," says Drobot.
The third advance Telcordia is working on includes ways to improve the way software is written.
"The innovations here should allow big service providers to roll out new offerings faster and more reliably," he says.
AT&T executives provided that, "SBC and AT&T together will offer new technology, high-quality services and value to compete for consumers as competition from other telecommunications companies and Voice over IP (VoIP), cable and wireless providers continues to increase."
In addition, by combining networks and resources, the new company will be able to bring to market new consumer services more quickly and in a more cost-effective manner than either company could on a stand-alone basis, the company said in a statement.
One of the areas where Bell Labs is playing a strong role is in the emergence of "blended lifestyle services." Enabled by a new standards-based network architecture called IMS (IP Multimedia Subsystems), carriers are now deploying networks that provide business, residential and wireless customers access to converged voice, video and data services.
"It will be easier to deliver virtually any service to any user through intelligent handsets and networks - all enabled by Bell Labs innovations that differentiate Lucent's approach to IMS," says Lucent's Jaffe.
In this network, voice and in particular Voice-over Internet Protocol (VoIP), becomes just one component of a blended services offering.
"While we think that some people will move over to VoIP because of cost, the real excitement is that carriers can now offer voice as part of a larger suite of advanced multi-media services, enabled by IP, convergence and IMS," Jaffe adds.
Of course, as voice and other services move to IP, security becomes very important. For example, Jaffe says Bell Labs is developing ways to prevent the VoIP version of SPAM, called SPIT (Spam Over Internet Telephony).
A benefit of converged IP communications are these new services. For example, in the active phone book service business customers could integrate their office e-mail phone book with their phone. All of the services, features and personalization that exist in the office environment will exist at home and on the road.
Lucent's innovations also span to nanotechnology, 4G (fourth generation) wireless applications and advanced optical networking.
"Optical networks were originally built to support voice on a circuit architecture. And data (IP) was added only as an overlay technology. However, 99 percent of today's traffic is now IP driven traffic. In order to have efficient transmission of packets over these optical networks you need a convergence of data and optical networking," Jaffe explains.
Here the overlay packet network is managed in the optical network and the convergence of the two yields efficiencies.
An Eye Toward Tomorrow
Is the past behind us? Is the industry finally recovering from the telecom slump that threw it for a loop two years ago?
Telcordia's Drobot notes, "The telecom industry is turning around slowly, and is faced with many challenges, but as a whole seems to be on an upswing."
Adding to that sentiment, executives say the recently completed mergers and those yet-to-be completed will be a boon to the industry, providing needed consolidation.
"The merger of SBC and AT&T is an important next step in the evolution of the communications industry and will bring needed consolidation to an industry that has been challenged by dramatic changes. Together, SBC and AT&T will be better positioned for success and leadership within a rapidly changing industry, setting the standard for transition from legacy technologies to advanced, next-generation IP networks and services," company executives states.
Only the future can reveal what will occur.
No comments:
Post a Comment