Market Guide to FWA—continued

Convergence and deregulation
The emergence of the Internet and the development of new digital communications technologies have helped to trigger a very rapid and fundamental shift in both economic and social development.

This 'digital' revolution promises to have far-reaching consequences. As long as the Internet continues to be the focus of huge capital investment and speculation, its optimism and uncertainty will be reflected in the world's financial markets, with many of the new '.com' companies spectacularly rising and falling in share value. Encouragingly, many of the more forward thinking traditional industries have also begun to develop focused web sites, portals, and e-commerce businesses with specific corporate goals and customer targets.

In parallel with these significant economic shifts, the world of communications has also been turned on its head through deregulation, increased competition, and the attraction of new business opportunities. Both incumbent telecommunications companies and new service providers have placed bets on the promise of e-commerce, m-commerce, and the new opportunities made possible by interactive and multi-media services. Mergers, acquisitions, and partnerships with application and content providers are also prevalent in today's market, and are a vital part of the realignment and integration of the old and new economies.

This frantic activity continues in spite of the fact that suitable infrastructures are not yet widely available to carry these media-rich services, and network providers are still at the earliest of stages of deployment. An unmetered, always-on, broadband infrastructure has yet to be made available on a wide scale and its construction represents one of the most critical elements in the development of the digital economy. At the broadest level, convergence concerns those industries that are involved in the creation, distribution and processing of electronic information. Digital technologies are changing the way electronic services are delivered, and the boundaries between service operations and the means of delivery are blurring. The technological distinctions between text, audio and video are also being eroded with the IP platform becoming the common protocol.

Convergence between once separate industries and technologies are providing companies throughout the supply chain with new market and technological opportunities, and of course additional competitive threats. These changes have encouraged many new entrants into the market and enabled existing players to cross over into other sectors.

In the news
A number of high profile mergers have also occurred over the past year that typifies the convergence and realignment currently underway in the industry.

In January 2000, AOL, Time Warner and EMI came together to form an end-to-end entity that covers the key areas of content creation, distribution and access - providing multimedia, broadband content and applications. AOL's Plus service, launched in April 2000 will be an important platform for the delivery of many of the group's content.

In June 2000 Vivendi, Seagram, and Canal+ merged to form Vivendi Universal. This new group has significant global interests that span content creation, distribution and access. With the world's largest wireless footprint and satellite, telephony Internet, subscription television and publishing interests, the new group is well positioned.

The widespread deregulation of national telecommunications markets has also had a tremendous driving influence on the level of market activity, competition and product development in the sector. Whilst not all countries have as yet fully unbundled their local loops, there is now greater competition between equipment vendors and service providers in the industry.

Growth in backbone traffic

The growth in data traffic over the past few years has been phenomenal, with traffic volumes doubling every 12 to 18 months on some networks. Both AT&T and Sprint's backbone networks have experienced huge growth, AT&T's tripling over the past two years, and Sprint's doubling over the past eighteen months.

Worldwide investment programs to upgrade the speed and capacity of the backbone infrastructure have been ongoing for some years. City-to-city fiber links of 34Mbps are currently being upgraded to 155Mbps, with over 10Gbps expected to be the norm in less than five years' time.

Twelve million miles of 10Gbps infrastructure is already in place, with hundreds of kilometers being added every day. These huge investments are largely a consequence of the worldwide uptake of the Internet by both business and the consumer market.

Growth in Internet use
Internet usage is also growing rapidly, and is forecast to reach over 670m users by 2005—up from 270m users in 1999. Western Europe will grow particularly strongly, as will the Asia-Pacific region and 'rest of world' areas.

 

Global Growth of Internet Traffic

Technologies driving this uptake include the increased usage of dial up modems, broadband access, mobile data and Internet ready consumer devices and appliances. This will occur in both business and consumer markets, and include human to machine and machine to machine applications.

The emergency of broadband access
The access market is currently in a period of transition, with new broadband access technologies rapidly coming to market. DSL (primarily ADSL), cable modems, digital satellite and broadband wireless access (BWA) technologies are now being developed and deployed, and represent the beginning of a mass transition to broadband access.

The report highlights three main factors that we believe will serve to continually widen the appeal of broadband access:

• Increased use of rich media content
• The Emergence of the TV and non-PC Portals
• Low cost or free broadband access

These factors, along with many others, will fuel both the demand for greater deployment, higher bandwidth and the development of new media rich applications, content and services—creating an interrelated cycle of broadband demand and supply.

—End  

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	[Dec. 15, 2000]	Fixed-Wireless: A Method For Broadband Internet Access
	[Dec. 1, 2000]	How to Start a Wireless ISP