Four "killer applications" will drive the demand for broadband services: always-on connectivity, multimedia transmissions, services for small and medium-size businesses and voice communications, according to panelists at the IDC European Telecoms Forum here on Monday.
In terms of multimedia, demand will be great for high-speed music downloads in particular. In voice communications, voice over IP (Internet protocol) using DSL (digital subscriber line) will grow as the technology becomes readily available, panelists said.
Executives from International Data Corp., Nortel Networks Corp., Alcatel SA, Siemens AG and Inktomi Corp. participated in the panel discussion.
One panelist, Mark Winther, group vice president of telecommunications research at International Data Corp., had a clear view of which applications he definitely does not believe in. He attended a meeting recently where participants discussed putting a camera inside a football so that the audience could see the game from the football's point of view.
"I thought, if that's what we are doing here, let's all go home. These are not the applications we need. We need the simple things we do today, only better and faster," he said. For example, people want to be able to download their e-mail messages faster, he added.
Furthermore, panelists agreed that there is little money to be found in the broadband business these days. Yet the outlook is very good for some companies, as long as they have a solid business model.
"Unavailability of capital is the issue," said Peter Newcombe, president of the unified network solutions group at Nortel.
"Demand out there has not stopped," he said. "We are still looking at phenomenal growth in pure traffic. The general mood out there is bullish. But now we have gone back to basics. You need a sound business model, otherwise you won't get any capital."
Willem Verbiest, vice president of DSL access at the carrier Internetworking division at Alcatel, agreed. "There is deep trouble out there, but there is absolutely no slowdown in DSL installments from our point of view. There is a lot of confusion, but DSL is growing very fast and in Europe it has only started."
Also on the panel was Ulrich Schoen, president of the access solutions information and communications networks group at Siemens AG. He offered an explanation as to why DSL demand is so high.
"The enterprises must go through cost cutting right now, which drives them towards electronic business. What we see now is a bubble deflating, things must go at a more reasonable rate," he said.
Eric A. Brewer, chief scientist and co-founder of Inktomi Corp. had another recipe for surviving the tough times.
"Companies have to have the courage to invest. There is nothing fundamentally wrong with the demand now. Now that the market is slow, now is the time to invest," he said.
IDC is a subsidiary of International Data Group Inc., the parent company of the IDG News Service.
The European Telecom Forum continues through Tuesday here in Rome.
IDC, in Framingham, Massachusetts, can be reached at +1-508-872-8200, or via the Web at http://www.idc.com/.