Despite massive capital investment in telecommunication
infrastructures across western Europe, sales of Internet Protocol
services in the region are much lower than projected and will grow
only moderately over the next two years, according to a report
published yesterday.
The report, which was published by the Frankfurt office of industry
consultancy Cap Gemini Ernst & Young and Dresdner Kleinwort
Wasserstein, the London-based market research arm of Dresdner Bank,
forecast sales of IP services to grow from $14bn (£9bn) to around
$17.5bn (£11.3bn) over the next two years. Authors of the study say
this growth is "too little" to help the financially troubled sector
get back on its feet.
Cap Gemini Ernst & Young and Dresdner Kleinwort Wasserstein
conducted interviews with 50 corporate users, 15 service providers
and 10 equipment suppliers on service, IP migration and quality of
service.
Interviews with corporate users, service providers and vendors
revealed several benefits of IP-based services. To name a
few:
- Open standards accelerate the development of new
applications
- Users can easily connect to all networks regardless of
operating system
- Packets are dispersed and assembled using resources only when
required
The reality over the past two years is that "IP's promise of
delivering better, cheaper and simpler service has not always been
fulfilled," the report said.
Of the 50 users asked about voice over IP, 30 cited shortcomings in
quality and reliability for not using it. The users believed the
benefits of VoIP are hard to justify when quality of service issues
had not been resolved.
Around 90% of the companies said security is a key barrier to
deploying IP-VPN (IP virtual private networks).
The study found that equipment costs were high and the payback
still uncertain. Corporate users said IP phones were too expensive,
with cost savings possible only when unit costs reach around £65
each.
The cost of a traditional PBX (private branch office exchange) is
lower than that of an IP PBX when its implementation costs are
included. Moreover, falling public switched telephone network
prices have eroded VoIP's price advantage.
As for simplicity, 60% of the corporate users said ease-of-use
issues remain a barrier to IP-VPN. Migration to new IP services has
often resulted in requirements to operate simultaneous systems. And
service providers have not resolved all issues related to
interoperability, billing and customer care,
Read the report at:
www.de.cgey.com/servlet/PB/show/1004820/IP-Services%20report%20Ch%200%20-%20Exec%20summary.pdf