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Well-Connected Locations

From VoIP to Wi-Fi and WiMAX, the latest telecom technologies are positioning communities to attract and retain industry.

Apr/May 07
There's no question that telecom's hot - in fact, some even say it's overheating.

The Telecommunication Industry Association's (TIA) 2007 Market Review and Forecast shows that broadband demand is driving the fastest telecom growth since 2000. Last year the U.S. telecommunications market grew by 9.3 percent to $923 billion in revenue, with carriers scrambling to invest in new fiberoptic lines, Internet protocol (IP) technology, and wireless infrastructure to provide high-speed voice, data, and video services.

"Consumers are thirsty for broadband and carriers are rushing to meet the demand," says TIA President Grant Seiffert. "Technologies like voice-over-Internet protocol (VoIP) and broadband video, as well as new mobile data services, are sparking new growth in the telecommunications industry. As a result, carriers are offering more competitive all-in-one bundled packages and consumers are seeing lower prices and more services."

According to TMT Trends 2007, published by Deloitte Consulting's Technology, Media, and Telecommunications (TMT) Group, the Internet could actually be approaching its capacity - a situation caused by skyrocketing demand, record growth of data and video transmission, and lack of investment in new infrastructure. Deloitte Consulting warns that bottlenecks may start appearing in key sections of the Internet - especially the connections between continents:

"With broadband connectivity," note the authors, "individual service providers (ISPs) are struggling to keep up with demand. The rapid rise in consumer bandwidth consumption may threaten their ability to deliver a consistent quality of service. North American ISPs may experience such high levels of traffic that all services - from search to streaming video - could slow down noticeably."


The major trend driving the business communications market is increased demand for VoIP and wireless voice and data transmission. Voice-over-Internet protocol, or VoIP, is broadband-based phone technology that TIA predicts will comprise 34 percent of all U.S. residential landlines by 2010. More businesses are also switching to VoIP - by 2009 VoIP will be more abundant than traditional enterprise systems.

The reason VoIP (also called IP telephony or IP technology) is so popular is that it "essentially turns voice into a software application that can reside on any IP network," says Dan Littmann, a principal in Deloitte Consulting's Technology, Media, and Telecommunications Group. "Features and functionality such as unified mailboxes, the ability to check voice mail on the Internet, and self-provisioning of new lines can be added at a fraction of the time and expense, compared to legacy systems."

VoIP allows the sound of your voice entering the telephone to be turned into a digital stream of ones and zeros, which is then reassembled back "into voice" when it's received at the other end. "A business can integrate its phones and its computers with VoIP," says Gia McNutt, CEO of SOS, a California-based consulting firm that specializes in voice and data solutions. "A variety of applications can all be run on a single system. All that's needed to start is an IP-based telephone and high-speed Internet access."

According to McNutt, 75 percent of large companies in the United States have already switched to VoIP. In addition, InfoNetics Research predicts that 50 percent of smaller organizations will be using VoIP by 2010. "If you already have an up-to-date data network, it may cost very little to upgrade to VoIP," adds McNutt. "Even if you don't, upgrading can pay for itself in a matter of months through costs saving alone."

VoIP applications, as innovative as they are, just don't grab attention the way wireless does. Wireless is sizzling, fueled by our insatiable demand for immediate information (and our willingness to pay for it). TIA estimates that by 2010, 87 percent of all Internet connections will be over broadband technology. A report by ON World suggests the North American market for municipal wireless broadband could reach $10 billion by 2011.

"Wireless networks allow businesses to access their people and information regardless of location and device, such as laptop, mobile phone, or PDA," says Littmann. "Wireless data is gaining adoption as wireless carriers roll out 3G (third-generation) networks and companies are increasingly working to enable a mobile work force. Coverage and bandwidth limitations will exist for the short term, but not enough to dissuade companies from subsidizing their employees' use of 3G networks."

Wireless providers are competing to win lucrative contracts to put together citywide wireless networks, including Wi-Fi and WiMAX. San Francisco is working with Google and EarthLink to cover the city in wireless. Philadelphia, Chicago, Atlanta, and Houston all have large-scale wireless initiatives planned or under way. Corpus Christi just completed an 18.5-square-mile mesh network for its 293,000 residents, which took three years to build.

After passing legislation in 2006 that deregulated telecommunications, Indiana is seeing a big jump in telecommunications investment. For example, AT&T is constructing a $4.6 million broadband technical support center in Indianapolis to support its expansion of broadband into more rural parts of the state. Suffolk and Nassau counties in New York are contemplating the viability of county-wide wireless networks - if successful, these will be among the largest wireless networks in the country and cost hundreds of millions of dollars to complete.

"The latest strategy for cities to attract new businesses is called Muni-WiFi," says Littmann. "Many cities are attempting to deploy Wi-Fi mesh networks across their entire city limits, effectively creating a broadband hot spot over the entire city. Despite some of the hype, these networks are not likely to provide the bandwidth and reliability necessary to create an attractive business offer. The in-building coverage will be limited and capacity and performance constraints will limit the utility of Muni-WiFi networks for most major business applications."

This is causing some cities to look to newer technologies such as WiMAX to achieve better service. WiMAX (World Interoperability for Microwave Access) is expected to enable true broadband speeds over wireless networks at an affordable cost.

"WiMAX is the technology of choice for the future of mobile applications because of its promise to deliver very high bandwidth over distance wirelessly," says Joe Franell, director of information technology for the City of Ashland in Oregon. To date, WiMAX is the only wireless standard that can deliver the broadband speeds needed to make citywide connectivity a reality for both fixed and mobile applications.

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