ITU Telecom World 2003

October 14, 2003
Standards need to converge to achieve interoperability

GENEVA -- The past four years shook the communications industry to its core. Overcapacity, high wireless spectrum prices, sluggish demand for data services and fierce competition among technologies and companies to sell the same services eroded profit margins and forced many smaller players to shut down.

According to Sean Maloney, executive vice president, IntelHowever, the industry is turning the corner and will rebound on wireless broadband. The chip industry has weathered many such downturns only to see demand surge again on new services customers are prepared to pay for.

He said: "I'm an old chip guy. Boy, we are used to ups and downs. But these things always end. I have great optimism, and the growth engine will be wireless broadband."

These observations were shared by industry heavyweights Sunday at the "Industry Roundtable: Reconnect" session, a Forum discussion organised by ITU at its TELECOM WORLD 2003 event in Geneva.

Above all, speakers, who included Sizwe Nxasana, CEO, Telkom South Africa; T-Mobile Board Member Nikesh Arora and Dr. Keiji Tachikawa, CEO of NTT DoCoMo noted an exponential rise in global mobile subscribers and great strides in data services since 1999, plus aggressive infrastructure build-out in many developing countries.

However, the challenges in supplying products and services that customers really want and sorting out interoperability between competing standards and services remain, panelists said.

Arora said: "There's a crying need on the part of the consumer for simplicity, reliability and ease of use. There's been lots of discussion about technology and features, but little talk about what the consumer really wants."

Tachikawa spoke to the overwhelming need for interoperability between technologies and products. "We need to involve all parties concerned to standardise technologies, and to improve coverage indoor and underground. We need to get onto the 3G ramp," he said.

Among high-speed technologies, Maloney singled out WiMAX, a "grown up version of Wi-Fi," for its longer reach and ability to sustain high transmission speeds. Wi-Fi itself has been around since the early 1980s, but plummeting manufacturing costs and its standardisation are driving fierce demand, he said.

He pointed out: Today, every seven seconds, a Wi-Fi access point is sold. Wi-Fi is growing at a rate previously never known on its low single dollar manufacturing cost now that standards have been hammered out. This is thoroughly, thoroughly good news and will bring a wave of innovation in new markets."

Maloney highlighted the construction and law enforcement industries as two sectors that are helping to drive Wi-Fi demand. Its fast set up time and low start-up costs makes such industries more efficient, saves them money and enables services previously impossible, like quick culprit apprehension, through on-the-road fingerprint scans, license plate identification and snap-and-send photos from digital cameras, etc.

Maloney added: "Data going to a person will change the way the industry works. Wireless broadband will help connect lower-income countries, as well. Daknet, for example, supplies mobile voice over IP calls and data services to a village in India at preset times via a roving Wi-Fi bus. Huge amounts of the world population live far from a central switch. Broadband wireless will connect the rest of the world."

Sizwe Nxasana said: "In Africa, we are just connecting, but we are leapfrogging and avoiding other countries' mistakes." He highlighted the SAT-3/WASC/SAFE undersea cable for connectivity to Europe and Asia as a recent achievement, underscoring deregulation, partnerships with US and Asian operators and shareholders increasingly eyeing Africa as a wise investment as key success factors. All of Africa has some Internet connectivity, too, he said, up from only a handful of countries in 1995.

He added :"Africa is the fastest-growing telecom market in the world. We are moving forward rapidly in the face of industry downturn. Africa is connecting and poised to grow."

"But challenges remain. WiMAX will be disruptive to other technologies and governments should work to release one GHz of spectrum to enable Wi-Fi, Maloney said. Standards need to converge to achieve true interoperability," Dr. Keiji Tachikawa said.

Overall, panelists were upbeat. Arora noted the shift of consumer spending from fixed to mobile services, with mobile making up nearly half of all telecom revenue today, versus only 5 percent in 1991. "There are more handsets than television sets today," he added.

Maloney refuted the so-called equipment glut across the industry. "There's not too much capacity at the edge. The industry is realigning itself to where the demand is, and it's the last mile," he added.