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DATA TRANSMISSION TO GAIN OVER VOICE COMMUNICATION JUNE 30, 1999 - DATA TRANSMISSION DUBLIN, June 30, 1999 -- Voice communications is no longer the driving force in the telecommunications industry, according to industry experts gathered at a conference here. Data transmission will soon see growth rates of 300 percent yearly, compared to only 5 percent for voice transmission, they said, and by the year 2008 international and long distance revenue will drop from 50 percent to 15 percent of the telecommunications industry total. This staggering growth rate, especially in Europe, will mean that "competition will intensify to the point that the industry will look like Dodge City with automatic weapons," said Philip Low, deputy managing director of PBI Media, organizer of the conference. Margrit Sessions, managing director of PBI Media, said demand for telecommunications capacity "will show explosive growth" beginning in 2001. And while the market is still dominated by incumbent carriers, "There is an opportunity for new players," she said. "The U.S. has 3,000 players, while Europe has about 300 serious players," Sessions noted. This combination of surging demand and increasing supply will bring an end to the domination of the European telecommunications industry by government-owned carriers. "The regime is breaking down," said Gerry Spencer of British Telecom. "Three years of revolution has overtaken one hundred years of evolution." Moreover, these new operators will take about 60 percent of the carrier market by 2005, Sessions pointed out, thereby taking the major share of industry growth. By 2005, the services market will be $400 billion yearly, -- a ten-fold increase from 1991, Sessions said. "Service providers will only survive by offering either very high quality or a broad base of services," she added. Fiber deployment, however, which would supply needed capacity, still lags in Europe, and prices are still high. And the local loop remains a hurdle. Jozef Cornu, chief operating officer of Alcatel, pointed out that "access is the biggest challenge today." One way to bypass the incumbents' monopoly is for a newcomer to build its own infrastructure. Paul Chisholm, president and CEO of COLT, noted that "the real constraint on telecoms usage in Europe was not technology but the artificial barriers created by the PTOs, with high prices and poor services." COLT built its own infrastructure, and now has 18 city networks throughout Europe. "If you crack infrastructure, you have nowhere to go but up in the capability you can deliver," Chisholm said. Meanwhile, Europe as a whole lacks the locally delivered bandwidth for advanced telecom services, according to Vincent Gallucio, senior vice president of Metromedia Fiber Network. This will soon be supplied, however, by organized and experienced entrepreneurial companies, pushing the market at a rapid pace, according to Rick Kent, vice president of PBI Media. Overall, the European telecommunications industry faces a repeat performance of what happened in the U.S., as deregulation helps to erode market share of the dominant incumbents. Jan Loeber, president of GTS Carrier Services, pointed out that new entrants in the U.S. long-distance held 10.5 percent of a $39 billion market in 1984, but by 1998 newcomers controlled 54 percent of a $95 billion market. "Europe will never be the same," Loeber said. Moreover, carriers should not delay investing in infrastructure for the new telecommunications age, he added. "The later you build, the bigger the risk." More than 800 delegates -- more than double the attendance last year -- attended the Carrier Wholesale Market Conference and Trading Floor held here June 17-19. PBI Media is a publishing and consulting firm based in Potomac, MD. The next Carrier Wholesale Market will be held in Malaga, Spain, November 10-12. For further information contact: Caroline Pocock Conference Director PBI Media cpocock@accessintel.com, Tel: +44(0) 171 440 8806, Fax: +44(0) 171 831 6573. Note to Editors: PBI Media is a subsidiary of Phillips International, a privately held company that has been providing market intelligence in the telecommunications and information technology fields for the past 20 years. Its annual revenue exceeds $340 million. |
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