Telco business shift spurred by IP growth: Ovum

Telecommunications providers are expected to reinvent themselves as operators of packet-switched communications networks by 2005, says an Ovum report released yesterday.

Growth in Internet Protocol (IP) services is expected to fuel the transition, which will see data networks become a "key concern" for telcos and circuit-switched networks lose ground.

Susan Sweet, senior consultant at Ovum and lead author on the report, said: "As IP becomes the basis for wide-area corporate communication, the pressure from corporate customers will grow on telcos to adopt IP in their backbone."

According to Sweet, as packet-switching becomes suitable for transmitting real-time traffic types such as voice and video, telcos will be able to operate networks based on infrastructure and protocols capable of carrying services including basic e-mail, voice, fax, data and videoconferencing.

According to Ovum, applications including integrated voice, data and multimedia, unified messaging, Web-enabled call centres and e-commerce as well as the Internet will drive rapid growth in the IP market, which is estimated will be worth $60 billion by 2005.

The findings are outlined in Part 2 of Ovum's report: IP: The impact on telco services and revenues.

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