You don’t need us to tell you that telecommunications systems and technologies pervade all areas of modern business – if you’re in management you know that.
Business devices that need telecommunications software and services include phones, mobile phones, eftpos units, fax machines, modems, pagers, radios, and wide area network connected computers. Business functions that rely on telecommunications include voice, data and video calls; cellular mobile and wireless transmissions, call management, ASP services, Virtual Private Networks (VPNs), e-business systems and internet connections. And if you find yourself wondering if there was life before email, well you’re not alone.
Analysts Asia Pacific Research Group reported in May 2001 that the broadband telecommunications market for Asia Pacific is succeeding beyond operator’s initial forecasts. Specifically, Asia Pacific’s DSL subscriber base grew over 300 percent from 1999 to 2000 and report from February this year showed that Asian mobile commerce (m-commerce) is projected to achieve US$20 billion in revenue by 2004.
Among other predictions made by APR was the continued acceleration of Short Messaging Services (SMS) and gradual rise in the number of mobile applications on the market. In the consumer market, APR found that 70 percent of Asians expect to use their handset as their primary mode for sending emails and getting news, and 61 percent expect these devices to become payment gateways.
Business benefits abound
So how can emerging telecommunications systems enhance business management in 2002? Robert Spray, managing director for vendor Nortel networks, says the key management benefits of emerging telecommunications technologies is the ability of the provider to deliver services that businesses can use ‘as provided’ – the ASP model.
“This represents move away from the current model, where the business has to maintain its own in-house skills to build solutions from components that are often sourced from multiple service providers and equipment vendors,” he says.
Spray predicts that this year technologies like IP telephony will begin to offer genuine value to businesses. “Voice over IP (VOIP) will deliver true multimedia service, linking voice services to other desktop services such as email, internet and video.”
Improvements to optic networks will lead to lower costs and more cost-effective use of bandwidth. “Optical networks enable new disaster recovery applications and managers can revisit backup and disaster recovery policies in light of these new options. And this year higher data rates from mobile network technologies will become really useful. These will drive raft of new services and managers can review their business strategies in light of the potential revenue opportunities.” Spray’s visions are encouraging. But while few analysts would argue with the premise that emerging tele-communications systems have the potential to deliver business benefit, the key word to remember is “potential”.
It’s fair to say that telecommunications providers tend to over-promise and under-deliver new technologies and systems – and the true level of business interest is often over-stated by vendors. good example of this is in the wireless space where much has been projected and little is yet known for sure.
However, while little scepticism is healthy, businesses are wise not to swing too far in that direction. There’s plenty of evidence to support the practice of keeping close watch on the telecommunications industry and to regularly evaluate the business case for adopting improved telecommunications infrastructure.
What’s on the menu
By now you might be wondering exactly which emerging telecommunications you should be watching. Legacy copper telecommunications cable is not coping with the demands of modern internet-connected and application-laden businesses. This problem, which has exploded in recent years as business communication software and devices have advanced exponentially, is driving telecommunications providers to devise new ways to move your voice, data and video signals from one place to another.
Among the emerging solutions are improvements to optical networks and IP voice and data services (those based on the internet protocol) faster Ethernet networks, and better capacity mobile and wireless network services. Satellite systems and an attempt to squeeze the last drop of productivity from tired copper lines through ADSL technologies also have role to play. However, it is widely recognised that as business solution, ADSL benefits are limited.
Chris Edmunds, technology research manager for children’s clothing retailer Pumpkin Patch, says that while the chain recently decided to install ADSL technology, ADSL is dependent on the state of the copper, and the distance to the ADSL-enabled exchange. “ADSL performance can be downgraded to the point where it’s no better than dial-up.”
Edmunds is particularly aware of the potential limits of ADSL in countries outside of New Zealand where older tele-communications networks simply cannot harness the full potential of ADSL technology. For example, in the UK (where Pumpkin Patch is expanding – see box story) its stores are only managing to achieve data transfer speeds of 9.6Kbps using the PSTN network.
And like many businesses that do their telecommunications homework, Edmunds can see an emerging niche for wireless telecommunications. “ADSL squeezes the last possible performance out of copper. After that, businesses only have two main alternatives – you have to have either fibre or other dedicated cable everywhere or install wireless solution,” he says.
The wireless window
So what exactly is wireless and how pivotal is it to the future of telecommunications? Briefly, wireless networks operate in similar way to cellular networks in that data is transmitted across network of antennae on high geographical points (called Points of Presence, or Pops). Wireless data is carried on low power radio frequencies and the signals are picked up through antennas. However, current wireless networks differ from mobile cellular networks in that the connection is not fully mobile away from defined wireless areas – such as while travelling in car.
However, the business viability of wireless goes far beyond its eventual mobile capacity. According to Edmunds the future of wireless is in the “last mile” of delivery, as well as distribution within the company premises. “We have over 25 kilometres of copper cable in our head office building. If we could replace that with fixed point wireless WAN – that’s got to be cost effective in terms of network installation and configuration flexibility.”
Thomas Salmen, network manager for wireless provider RadioNet, says wireless overcomes the problem of core and backbone networks being under-utilised while edge and distribution networks tend to be over-subscribed and congested. “It’s scalability issue – the further from the core subscriber is, the higher the cost per subscriber for the supplier. Wireless can help mitigate this, because it has far lower deployment costs than cable-based networks.”
And Nortel’s Spray says that wireless use in Wide Area Networks (WANs) will be of “huge value” to businesses. “Truly usable wireless services will be available in 2003 and high usage will emerge one to two years later.” And some analysts agree with one prediction that by 2003, fixed broadband wireless networks will service almost half of US businesses and more than third of US households.
In New Zealand, fixed wireless services are offered by both Telecom and TelstraClear, with mobile providers like Telecom and Vodafone working on improving mobile wireless technologies (more on this later). Walker Wireless and RadioNet are probably New Zealand’s largest dedicated wireless providers. Unlike the larger providers, these companies can focus on wireless and have been working to provide more secure, more r
