[CAnet - news] Decline in telco revenue blamed on customer owned networks

[The highly respected "Roger's Report" focusing on communications policy,
regulation and legislation recently did an in depth analysis of the current
problems plaguing the telecom industry in their February 18th edition. It
was written by Dr Faroq Hussain, an internationally renown telecommunication
expert.

The report describes how the all the large traditional voice telephony
carriers expected to offset the loss of declining revenues in their core
voice business with the anticipated growth in data revenues, especially in
the much vaunted enterprise market. But the growth in the data market has
been flat to declining since 2000.  Amongst the explanations for this is
that the large enterprise accounts have been attracted to become
"asset-based" network business models where they purchase and operate their
own infrastructure. The asset-based model is also taking hold in local,
municipal government and large institutions.

The report mentions that US government is also looking to models that allow
it to own and operate its own infrastructure such as the US military GIG-BE
project.

For more information on the Rogers Report please contact
[email protected]. Dr Hussain can be reached by e-mail at
[email protected]

One of the drivers for customer owned networks is the development of new
genuinely neutral carrier hotels.  In a recent report in ITworld "The hub
and better buildings for data"
http://www.itworld.com/nl/network_mgmt/09092004/ the article describes the
new "Hub" - a new carrier neutral facility in New York City for enterprise
customers to locate their critical systems and servers as well to
interconnect to the service provider of their choice.

"Built in 1934 as an AT&T office building and switching center, The Hub
includes many touches unfortunately not included in modern buildings. First,
there are four entry points for wires and cables, providing redundancy again
and again. Second, two power grids (entering at different points) supply the
needed juice. Third, building management set aside one floor (the 24th) for
the Hub Room, for fiber patch panels including overhead raceways, racks and
cabinets, and 24 hour monitored security."

Facilities like the Hub are attractive to other building owners as they can
offer their tenants dark fiber connections to the carrier neutral facility
which provides their tenants with better security, reliability and cheaper
telecom fees. 

The Museum of Natural History, for example, has purchased several strands of
dark fiber to carrier neutral facilities including the Hub and lights the
fiber with 8 channel CWDM.  This has dramatically reduced their overall
telecom and Internet costs, while at the same time significantly increasing
their bandwidth and provides them with greater reliability and security.

The ongoing consolidation in the telecom marketplace will likely further
drive enterprise customers to acquire their own fiber networks and
interconnect to service providers of their choice, or to each other, at
carrier neutral facilities like the Hub and similar facilities around the
world--BSA]





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