The arrival of Asynchronous Transfer Mode heralds the end of telecommunications as we know it. So concludes a report from Cambridge-based telecommunications consultants Analysys Ltd. The thrust of Analysys’s findings is that Asynchronous Transfer will fundamentally shift the balance of power away from the telecommunications operators and their suppliers and towards end-users and the vendors of customer premises equipment. According to the report, ATM: Vendor and Operator Strategies, this shift will be a result of the way the technology is implemented: Asynchronous Transfer will begin as a myriad of island implementations followed by interconnection, which will result in a high proportion of the added value being captured on the users’ side of the network termination point. Further, says Analysys, the emerging marketplace will be one in which neither established practice nor past experience will guarantee success to any of the players – whether from the telecommunications, networking or information sectors. The players with the most to lose from Asynchronous Transfer Mode are the telecommunications operators, adds Analysys. Asynchronous Transfer threatens to reduce their dominant role in the telecommunications value chain to that of a commodity bit-carrier, a mere distributor of cells. But if the operators do not provide Asynchronous Transfer Mode, then large users and resellers will simply buy capacity and exploit the advantages of low-cost, high-capacity transmission themselves, predicts the report. Therefore, operators will effectively be forced into implementing Asynchronous Transfer Mode services to head off such incursions into their domain.
Turn upside down
Nevertheless, Asynchronous Transfer Mode can benefit the operators, says Analysys. It will enable them to deliver new high-bandwidth services profitably, and support a wide variety of services on a common infrastructure, bringing economies of scale, scope and integration. But these benefits will come from the revenue side – from provision of advanced services – and not from cost savings. Traditional telecommunications equipment manufacturers will face many of the same challenges, the report continues. The arrival of competitors from the local network, wide area network and customer premises network sectors, arriving from markets where life-cycles are measured in months rather than decades, and which expect to bypass traditional mechanisms like the International Telecommunications Union, by establishing standards quickly through bodies like the ATM Forum, will turn upside down the traditional pricing structures and routes to market. If the equipment manufacturers fail to find new routes to market by establishing more direct and varied links with their client base, they will be unable to gather the market intelligence and customer feedback on which the success of future product generations will depend, the report finds. The biggest beneficiaries of Asynchronous Transfer will be large corporate telecommunications users, who are set to gain enormous benefits from the arrival of the technology, says Analysys. Asynchronous Transfer Mode promises to deliver universal interconnection for all services (speech, point-to-multipoint data, point-to-point data, video and multimedia) and a way of sharing overall network capacity cost-effectively between different services. Asynchronous Transfer also simplifies the management and configuration of networks by abolishing the distinction between local area and wide area networks. In addition, Asynchronous Transfer Mode presents telecommunications users with a new set of choices. They will have the opportunity to re-draw the boundary between themselves and their telecommunications operator, and to capture more functionality within their own local networks or enterprise networks. Moreover, they will have a wider choice of suppliers for customer premises equipment, access and interface equipment than they have been used to up to now. In short, concludes the report, they will be the main beneficiaries of this major shift
in the balance of power in the public telecommunications world.
