Telecoms Future Remains Bright Despite Potential Threats to Network Integrity

Despite perturbations in global financial markets, worldwide telecommunication industry revenues are predicted to continue growing at a healthy eight percent over the next five years, according to a new market analysis study from INSIGHT Research Corporation. Telecommunications revenue, including narrowband and broadband landline, wireless and cellular services, as well as Internet communications are expected to grow from $2.1 trillion in 2008 to more than $3 trillion by 2013 even as margins on traditional voice-related products continue contracting and the industry responds by shifting to an Internet Protocol (IP) communications fabric.

According to INSIGHT's report, with voice revenues shrinking faster than their ability to cut costs, landline phone and cellular companies are turning to IP communications technology to reduce their cost of operations. IP facilitates convergence, making it easier for incumbents to replace multiple networks with one network on which everything travels as interleaved streams of IP packets. The study also notes that the shift to IP will engender greater competition, which will lead to lower subscribers' fees; however, the downside is that telecommunications networks may be subject to attacks not seen in traditional phone networks.

"The industry has no choice but to shift to IP communications since it is the only sure way to lower operational costs and to quicken the cycle time required to roll out new services," says INSIGHT president Robert Rosenberg. "IP will create greater competition, which will lower prices for consumers and businesses. However, the centralized control that was a hallmark of the old phone networks will be gone, and IP networks have already come under attack by cyber criminals and far more powerful organizations that targeted opposition government web sites, so the shift to IP comes with a downside potential as well," Rosenberg concluded.

Posted to the site on 22nd October 2008