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The Crystal Ball - Peter Heywood

August 21, 2003

6 Min Read
The Crystal Ball

I'm hopping off on holiday in a couple of days, and while I regenerate my vital humours in the Arcadian resplendence of Tuscany, I'm hoping you'll lend a hand in a Light Reading project aimed at regenerating some vitality and sense of purpose in the telecom industry.

This Crystal Ball project, as I have dubbed it, aims to explore the fundamental issues likely to shape the telecom industry over the long term – and it's something I can't do on my own (Nostradamus I ain't!). I need your help, and I think I've found a way of getting it.

My idea is to extend an experiment I tried with the Who Makes What: Equipment 2003 report, in which I invited readers to send in comments to help me refine and extend that article. With the Crystal Ball project, I'm taking this a stage further and asking you to put forward ideas and submit articles for possible inclusion in another report that will grow over time as the discussion widens and deepens.

This column is step number one. I'm going to get the vitreous spheroid rolling by suggesting some Big Issues. You're welcome to suggest other ideas and submit articles. I'll tell you how to do this at the end of this article.

This is not an invitation for you to snow me under with company propaganda or other drivel. I want you to enter into the spirit of this project and send me genuinely thought-provoking stuff about the long-term future of telecom, particularly if you are an industry leader. I'm going to be very picky about what I publish.

I think this is an opportune moment for such a project for a couple of reasons.

First, my sense is that the telecom industry is in a flat spin and needs some help in figuring out the way forward. It's become obvious that things can't carry on as they have in the past. The money from telephony is drying up fast. At the same time, nothing has really emerged that promises to replace telephony revenues. The industry is (a) in crisis and (b) just drifting. Nobody knows what to do, and folk are so focused on surviving the immediate future that they're not paying attention to where we're all heading (which may be off the edge of a cliff).

Second, I think it's worth reminding ourselves that the telecom industry is exciting. I still believe we are building infrastructure that will result in fundamental changes to the world economy. I'm also fed up with listening to folk being gloomy about the future of telecom. DSL deployments are roaring ahead right now. Enterprise bandwidth requirements are growing at 50 percent a year. P2P traffic is exploding. This isn't an industry in decline; it's an industry in transition – hence the need for an examination of the way forward.

Here's the sort of questions I want to try and address in this project:

1. What Is Telecom For?

  • If it's so vital to general economic health, is it safe to leave it in the hands of companies whose main interest is to maximize returns to shareholders?

  • 2. Is Competition Always Good?

    • Should passive infrastructure – the basic ducts, fiber, copper in the ground – be state owned, as highways often are? Providing this at cost, or perhaps courtesy of taxpayers, might encourage healthier competition among providers of active infrastructure.

      • Do we need a totally new direction on telecom regulation? Should we be aiming for ubiquity, low cost, and lots of innovation, rather than maximizing competition?

      3. What's Happening to the Service Provider Market?

      • Will it stratify into a few huge passive infrastructure providers, lots of active infrastructure providers, and a plethora of application providers?

        • What types of companies will emerge as the big players in each of these segments?

          • What is the long-term prognosis for incumbent carriers?

          4. Where Will Future Revenues Come From?

          • Can we expect the average user to spend more on telecom – and, if so, what will he or she spend less on?

            • What's the most promising market segment?

              • Aren't telecom services inherently low-value commodities? Isn't the whole point of IP that it can shift zillions of bytes around for a few pennies?

              5. Is There a Telecom Moore's Law?

              • What sort of improvement in performance and reduction in price can the typical telecom user expect by the end of the decade?

                • What will drive this change – technology, competition, something else?

                6. What Technologies Will Have the Biggest Impact?

                • DSL everywhere? Wireless everywhere? Fiber everywhere?

                  • Are we really going to end up with all services running over a converged packet backbone?

                    • Convergence of fixed and mobile telephony?

                      • All-optical networks?

                      7. Which Technologies Won't Survive the Decade?

                      • Will Sonet/SDH succumb to Ethernet in the long run?

                        • Will ATM survive, will MPLS die?

                          • Will satellites crash and burn?

                            • Will enterprises still be using Frame Relay?

                            8. What Sociological Changes Will Affect Telecom Use?

                            • Changes in the way we work?

                              • Security issues?

                                • Congestion on roads?

                                  • Globalization of trade?

                                    • Outsourcing to the Asia/Pacific?

                                    9. Whither Killer Applications?

                                    • Is the whole notion of killer apps a reflection of an old-fashioned telecom mindset?

                                      • Won't packet networks allow the proliferation of an endless number of applications tailored to individual requirements?

                                        • Is peer-to-peer networking the biggest thing to happen to the Internet since the invention of the World Wide Web?

                                        10. Where's the Telecom Equipment Market Heading?

                                        • Will the incumbents end up as systems integrators, as most of the mainframe vendors did?

                                          • Will Chinese vendors end up top Shar-Peis?

                                          11. Can Automation Save Carriers?

                                          • Are they about to go through a supply-chain and quality control revolution similar to the one the European and American car industries went through 20 years ago, when threatened by the Japanese?

                                          • 12. How Will the Use of Computers Influence the Evolution of the Internet?

                                            • Is Grid Computing the next big thing?

                                              • Is P2P the next big thing?

                                              13. Are Telecom and TV Converging?

                                              • Will triple-play ideas work this time around?

                                                • If voice and data convergence has proved difficult, what real chance is there of telecom and TV convergence?

                                                  • What would be the impact of telecom and TV convergence?

                                                  14. Is It Time for a New Cast of Characters?

                                                  • Are the leaders of the telecom industry too set in their ways?

                                                    • Are there lessons to be learned from other industries that have gone through big upheavals?

                                                    I've got plenty of other ideas, but that's more than enough for now.

                                                    So, over to you. If you would like to suggest other themes, I'd prefer you to post them on the message board so that other folk can see them immediately. But if this is a problem for you, please email them to me at [email protected] with a subject line of Crystal Ball. If you want to suggest an author, submit material, or ask questions, please use the same email address and subject line. Remember: I'm going on holiday, so I won't be responding until after I return on September 8.

                                                    Ciao, ragazzi!

                                                    — Peter "Swami" Heywood, Founding Editor, Light Reading

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