When Will Convergent Networks Become A Reality?tele.com Magazine Groundbreaking Global Study on Convergence Finds A 53 % Increase in Funding with Little Progress Made Since 1999PRNewswire A landmark study released today by CMP Media's tele.com, an in-depth, forward-thinking magazine providing today's service providers with the intelligent context needed to compete successfully, reports that despite the current economic conditions, communications companies worldwide remain committed to a multi-billion dollar strategy to create a true all-encompassing network infrastructure. This network will help unlock the potential of bleeding-edge technologies to benefit all customers from individual residents to multi-national corporations. The global research study entitled, "Convergence Reality 2001: Business and Technology Opportunities," tele.com's second research study on this topic, revealed that all of the fundamental drivers of convergence are cemented in place and service providers remain more committed than ever to making convergence a reality. The study shows that service providers on average are setting aside 53 percent more in funding in 2001 than when the study was first conducted in 1999 to finance the creation of a single, ubiquitous network supporting voice, data and video services. If realized, this multi-billion dollar convergence initiative will unleash the power of data-centric or IP-based networks to provide low-cost and feature-rich communications services. "It's important to highlight that these studies were conducted in two very different economic environments," said John Salak, editor in chief of tele.com. "At the height of the booming Internet economy in 1999, service providers believed in the potential and reality of convergent networks. Two years later, the economic picture is less promising, but there is a tremendous jump in the allocation of funds for the migration to and development of convergence. This is a key indicator that although the move toward convergence may not be an easy and even road, the goal of total network convergence is not only a top priority, but a driving force in service provider plans." Many 2001 respondents report that it may take 5 to 8 years to realize the goal of achieving a five nines (99.999 percent) service availability and reliability standard which is currently seen in traditional, although more costly, phone service. The fact that respondents from 1999 and 2001 predicted almost identical timelines for convergence availability and reliability illustrates that progress toward true convergence has advanced little. "Convergence is unstoppable and will become a reality, regardless of the timing," explains Jeremiah Caron, tele.com's Publisher. "The flat growth uncovered in the convergence study reveals that there is tremendous potential for equipment manufacturers to deliver the core state-of-the-art technologies required by service providers to make network convergence a reality." The study's key findings include: Network Availability: In 2001, 25 percent of respondents believed that a converged network would be able to deliver 99.999 percent availability -- the standard currently used in today's voice or telephone networks -- in the next two years, and 34 percent believed that this standard would be achieved in five to eight years. The numbers remained nearly unchanged from 1999 with 21 percent claiming network availability in the next two years and 30 percent claiming network availability in the next five to eight years. This indicates that little progress has been made toward network convergence. Network Reliability: In 2001, 24 percent of respondents believed that a converged network would be able to deliver 99.999 percent reliability -- the standard currently used in today's voice or telephone networks -- in the next two years, and 31 percent believed that this standard would be achieved in five to eight years. These numbers remained nearly identical to the 1999 findings with 21 percent claiming network reliability in the next two years and 30 percent claiming network reliability in the next five to eight years. Once again, this indicates that the timeline has been pushed forward and the industry is not making much progress toward convergence. Financial Resources: Convergence funding has increased 53 percent since 1999, with the mean amount of funding per provider increasing to $245 million in 2001 from $160 million in 1999. Given that almost 20 percent of respondents in 2001 have $1 billion or more set aside to spend on convergence initiatives, it can be concluded that the move toward total convergence will be a multi-billion dollar initiative. Furthermore, 81 percent of funding in 2001 is being derived from internal sources or existing revenue streams, a healthy indicator for the future of convergence and its inevitable existence. Convergence Leaders: Convergence is a strategic concern as indicated by the 2001 study results which show that 78 percent of executive management is now making the key implementation decisions. This statistic, coupled with a ten percent drop from 69 to 59 percent in the number of network engineering management persons responsible for handling the same responsibilities, clearly reinforces the idea that adoption of convergence is strategic and inevitable. The fact that tele.com study respondents were upper-level management makes the data even more statistically relevant. Technology Driver: 70 percent of respondents rated voice over IP as the most important technology driving convergence. The study was conducted via telephone by CIC research among 513 tele.com subscribers in North America, Latin America, Europe, the Middle East and Africa. This number of respondents indicates very high statistical confidence in the data. The study results will be unveiled today in a forum co-sponsored by tele.com, Ericsson, Microsoft, Cisco Systems and Acterna at SUPERCOMM 2001, the premier annual communications and information technology exhibition and conference held at the Georgia World Conference Center. About tele.com magazine: tele.com provides executive-level service providers with the intelligent context they need to compete successfully in today's rapidly evolving communications industry. tele.com, whose in-depth and forward-thinking analysis of communications trends, technology, and issues from a global perspective empowers executive-level service providers to make smart, strategic decisions. http://www.teledotcom.com/ is the magazine's Web site. About CMP Media: CMP Media Inc. (http://www.cmpnet.com/) is a leading high-tech media company providing essential information and marketing services to the entire technology spectrum-the builders, sellers, and users of technology worldwide. Capitalizing on its editorial strength, CMP is uniquely positioned to offer marketers comprehensive, integrated media solutions tailored to meet their individual needs. Its diverse products and services include newspapers, magazines, Internet products, research, direct marketing services, education and training, trade shows and conferences, custom publishing, testing and consulting. CONTACT: Kimberly Cameron of tele.com, 212-592-8234, kcameron@cmp.com, or
Kimberly Hofman of PepperCom for tele.com, 212-931-6134,
khofman@peppercom.com
SOURCE: CMP Media Inc. Contact: Kimberly Cameron of tele.com, 212-592-8234, kcameron@cmp.com, Website: http://www.teledotcom.com/ |