General Marketplace
Background
Global telecoms and datacoms markets have undergone dramatic changes in the last decade fuelled by an increase in market liberalisation, and significant advances in technology. These factors have been a catalyst for the fierce competitive environment that exists today for the provision of cost efficient, value-add infrastructure and services.
Competition in the operator arena has generally been good news for residential and enterprise end users who have benefited from improved services and cost reductions. Enterprise organisations have also consistently maintained investment in new technology for their internal infrastructure as they seek to improve operating efficiency and productivity while gaining an advantage over their competitors.
Recent Market Position
Several years of rapid growth in the Telecoms Media and Technology (TMT) sector was spectacularly checked at the start of 2001 with a downturn that saw a drastic reduction in company values and which also witnessed many small and some high profile companies bankrupt or under pressure to stay solvent.
2001 and 2002 was a period of downsizing and consolidation for many companies particularly equipment suppliers who were adversely affected by the global reduction in equipment sales.
As many analysts and industry players have predicted, 2003 has so far seen many markets showing signs that they are stabilising. Companies understand the criticality of maintaining competitive advantage and are cautiously increasing spending with a targeted investment approach.
The Changing Business Model
The traditional communications model of ten years ago has changed substantially and many new opportunities and challenges now exist. Incumbent operators are being forced to control costs and find new ways of delivering value while new entrants are emerging and establishing themselves in new commercial market conditions.
An emerging model has opened up previously well protected service markets. New entrant operators and enterprises take advantage of international and domestic wholesale arbitrage, non telecom players have broken into telecom markets, bandwidth providers have moved up the service value chain, enterprises utilise internal data networks for voice & video traffic, ISPs and cable operators exploit broadband access, and 3G mobile operators have become multimedia communication and content providers.
Today’s business decision-makers are now faced with compelling opportunities and potentially costly pitfalls as they continuously review their business strategies and plans.
The Changing Network Model
Central to this changing communications model is a revolutionary advancement in the way traditional telephony is carried when in the mid 1990s multimedia traffic, voice/video/data/fax, began to be transmitted over a single ‘converged’ multipurpose network.
Operators, enterprises and residential end users are now embracing this converged network model as the business and technological advantages of combining various types of communication over a common infrastructure become increasingly realised.
Whilst traditional network models shall certainly exist for the foreseeable future, it is this ‘converged’ model that predominates as the stimulant for the telecoms and datacoms markets today.
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