In a little over five years, more than 50% of the world’s communications will move over the Internet, as even traditional telephone companies like AT&T offer consumer Internet telephone services, according to a panel of leading communications and PC company officials gathered at PC Expo in New York last week.
A sea change is happening, from today’s circuit-switched network — on which the PSTN (public switched telephone network) is based — to the IP (Internet protocol) based, global packet-switched network. Leading this change will be a range of computer, traditional telephone and new Internet companies, according to the panel.
Sitting on the panel, called “How the PC Will Transform Telecommunications”, were: Tom Evslin, vice-president of AT&T’s WorldNet services; Frank Gill, executive vice-president of Intel; Allen Lutz, senior vice-president of Compaq; and Elon Ganor, chief executive officer of Internet telecommunications company VocalTec.
As the computer industry moves to tap the Internet as a means of carrying voice, the traditional phone companies “will not hide their heads in the sand,” says AT&T’s Evslin.
“We’re moving to the point where voice is just another form of data,” he says. “As quickly as the transition happens from circuit-switched network to the packet-switched network we’ll be ready to handle that,” Esvlin says.
Leading companies in the PC arena will also be pushing the changeover to Internet communications, according to the PC officials on the panel.
“Telephony will be a standard on the PC in a few years,” says Intel’s Gill. Intel has put resources into Internet communications, because it is betting that that is the way to expand the boundaries of the PC market, he says.
Intel believes that Internet communications can expand the PC industry so that IT-related companies can grow without necessarily gaining tremendous market share.
Already the numbers of PC users making voice calls over the Internet numbers in the millions, according to VocalTec’s Ganor. But it will be new services, such as electronic commerce applications and video applications, which move beyond what phones can do, that will help push up the numbers of users tapping PCs and the Internet for their telecommunications needs, said panelists.
“The [PC] business model which is taking over is a model of alliances, of speed, of open [technology] rather than proprietary technology, of lower gross margins, of pricing for market share, and that’s different from the regulated world,” says Lutz.
Athough the IP network may carry more data, video and voice traffic than the PSTN in five to 10 years, PCs using the Internet will not completely replace telephones using the circuit switched network, panelists agree.
“The added-value services will probably be based on IP,” said VocelTec’s Ganor. “But the traditional systems is excellent and we cannot forget that ... I don’t see the death of the PSTN.”