ETLI)66 ET5066 Project Management in Telecommunication Services

Equipment vs network services

For a given technology, the market dynamics for network equipment anf for network services
exhibit a clear pattern whereby the former may be considered a leading indicator of the
latter.
The peak of the service revenues lags the peak of equipment sales by anywhere from 4 to 10
years.
MarketPenetration

Ti me

Evolution of the membership in the ATM Forum and the sales of ATM equipment and services in the
USA

1614e ul ATMF MernDership

6000 900
55D0 74 '*""'Total U, Servic Revenue (TIA) 800
5000
Equipment Sales SM (TIA)
4500 700
608 - 1 1 1
6 0 0
4000
3500 03
455 500
3000 418
2500 400
2000 300
1500 207
200
1000 -

500 66 77 85 100

0
4'
j El II 0
;s;

Standardization for Telecommunication Services

Public telecommunications services require specific agreements among the parties involved
(equipment manufacturers, network operators, service providers, and end-users).
The diminishing role of goverments in mandating the rules for telecommunications means that
these agreements will be based on voluntary standards-that is, on the business strategies of the
various firms that form the industry.
External Standards
A telecommunication service company has interests in external standards, some of these
reasons are as follows:
o Reduce the uncertainties concerning the compatibility of equipment from different
manufacturers
o Establish a framework for bilateral and multilateral negotiations among carriers. The
emergence of virtual network operators that buy capacity from network providers
highlights the need for such standards.
c Ensure continuity of the equipment supply.

ST: Telecommunication Engineering Research Group Page 25