home *** CD-ROM | disk | FTP | other *** search
-
- -------------------------------------------------------------------------------
- Extracted from -:- Scientific American (May 1987, Volume 256, Number 5.),
-
- Orginally presented on Tequila Willy's Great Subterranean Carnival (Phreak/Hack
- ONLY system): -=*&@( 209/526-3194 )@&*=-
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
-
- TELCOM '87 PREVIEW - PART 1
-
- A Report by Andrew Hargrave
-
- The 1983 TELECOM exhibition in Geneva signalled major advances in the
- technologies and structues of world telecommunications. The initials ISDN
- (Integrated Services Digital Network) made their first appearance,
- foreshadowing a convergence and integration of computers and
- telecommunications on a scale never before imagined. Since then there has
- been rapid progress in planning -- and to a certain degree implementing --
- ISDN which will eventually produce a global netowrk of voice, data, text and
- vision transmission available to both business and private users.
-
- TELCOM '87, bo be held in Geneva in October this year, will, in the words of
- Mr. Richard E. Butler, Secretary General of the organizers ITU (International
- Teelecommunications Union) "enable us to assess the results of all the work
- carried out in connection with the ISDN concept...and also demonstrate the
- benefits of telecommunications to the user."
-
- Mr. Butler stressed the need for standardization, with special emphasis on
- compatibility between products developed by the industires of the various
- countries. "Provided they comply with the standards established by the ITU,
- and in particular by the CCITT (International Telegraph and Telephone
- Consultative Committee), these industries will be able to supply products
- designed for interactive operations. This is what we hope to show at the
- exhibiton."
-
- Alongside the exhibiton, the World Telecommunicatons Forum will address some
- major issues, such as "whither telecommunications?"; its economic impact;
- relations between respective suppliers of computer services and of
- telecommunications equipment; the effect on the user; its role in improving
- production and speeding industrial research. "These are all fundamental
- questions which call for discussion," said Mr. Butler.
-
- They are also the main themes of this report -- the first of a twopart survey
- on international communications.
-
- TELECOMMUNICATIONS IN A FLUX
-
- Until relatively recently -- the late 1960s -- global telecommunications had
- presented a tidy pattern. National post/telecommunications administrations
- were ordering , maintaing and renewing autonomous networks normally from their
- national suppliers. They gradually provided, it is true, services additional
- to the voice-telephone, mail and telegraph, such as telex and facsimile
- transmission and, of course, televison and radio for news, entertainment,
- sports, etc. Service was fragmented too: the transmission and exchange of
- informaton -- of text, graphics and vision via the public network -- had not
- yet arrived.
-
- There were, of course, companies selling public electromechanical systems
- (Strowger, cross-bar) and later electronic analog systems, beyond their
- national frontiers. For L.M. Ericsson of Sweden, for instance, the national
- base was too small to sustain and expand the company, ITT, of the US, sought
- to bypass the AT&T monopoly in the national telecommunications service -- in
- both telephony and switching equipment -- by exporting their equipment through
- major subsidiaries such as CGCT in France, SEL in West Germany and others in
- the UK, Italy, Belgium, Spain and elsewhere.
-
- Among the most spectacular events of recent years has been the merging of
- Alcatel (telecommunications subsidaiary of the CGE group) of France and the
- telecommunications division of the US concern ITT in January this year. THe
- new company, Alcatel NV, is registered in the Netherlands but is headquarted
- in Brussels. The merger (in which Alcatel has a majority holding) has created
- the world's largest public switching and second-largest telecommunications
- company (after AT&T).
-
- AT&T itself set up four years ago a jointly owned company -APT- with Philips,
- of the Netherlands, Europe's top electrical and electronics concern alongside
- Siemens, of West Germany.
-
- North America (mainly the US) is, as Table II indicates, the largest single
- market in the world for public exchanges: hence the intense intrest shown by
- leading European suppliers, especially since the deregulation of local
- telephony and the breakup of the AT&T monopoly.
-
- The declining value of sales in Europe, at any rate, is largely due to the
- price advantage of digital hardware compared with its analog predecessor. (In
- the US, there are now virtually no analog replacements).
-
- The greater openness and diversity of the US public switching market had
- enabled Northern Telecom, of Canada, with its most up-do-date systems to
- challenge successfully AT&T on its home ground.
-
- Altogether, about a dozen major suppliers vie for the world's digital public
- switching contracts -- far too many, according to most experts. In addition
- to AT&T and APT, Alcatel-ITT, Siemens, Ericsson, Northern Telecom and GTE, the
- UK manufactures GEC and Plessy, so far unable to obtain contracts ouside the
- home country for their joint product System X, are apparently poised to enter
- the export market. Plessey has bought its way into the huge US market by
- acquiring Stromberg-Carlson, manufacturer of small and medium-sized public
- exchanges. Italtel, telecommunications subsidiary of the Italian state-owned
- information technology group STET, is also a recent entry on the global scene
- with its up-rated UT series, as is Telenokia, of Finland. Nor can the
- powerful Japanese trio, NEC (already active in the US), Hitachi and Fujitsu,
- be expected to stay out of Europe while digitalizing the home
- telecommunications network.
-
- Views differ whether the speedy advance and turmoil in the world's
- communications industry is mainly technology or user driven: a matter of
- varying attitudes by individual PTTs, business and private subscribers in the
- various countries -- the advanced industrial countries in the main.
-
- There is no doubt, however, about the concept which symbolizes progress in
- telecommunications technology in the remaining years of this century and
- beyond. It is ISDN.
-
-
- ISDN: NOW A REALITY
-
- "The biggest machine ever built, the international telephone network, is being
- revolutionized by the smallest machine ever devised, the microchip...", So
- says the European Commission's Information Technologies and Telecommuincations
- Task Force which claims that the new services represented by ISDN "will be
- commonplace from 1988 onwards."
-
- ISDN, as already indicated, integrates voice, data, text and vision in a
- single service. It is characterized not only by the linking of these
- functions in a single, terminal-assisted instrument panel, but by the speed of
- transmission (the Task Force suggests, teletex will be 100 times faster than
- today's telex; facsimile copiers will transmit at a rate of a page per
- second); but also by improved quality of sound; by caller identification; by
- extra security; by group conferencing in sound and vision; by access to new
- commerical services.
-
- Above all, ISDN promises to be cheaper, much cheaper than the present
- separately operated and billed services, though this depends on the pricing
- structures of PTTs as well as the prices of the ingredients: central
- computers, microprocessors, optic fiber cables, instruments, components and
- the most expensive single item in systems "architecture", software.
-
- The European Commission, in addition to calling for the adoption of common
- (CCITT, No 7) standards by PTTs of the 12 member countries, based first on 64
- Kbits/s and possibly later on 2 Mbits/s digital switching, has also set a
- timetable for the coordinated introduction of ISDN in Europe. It has hopes,
- too, of those standards being adopted by Japan and the US. The timetable
- envisages a three-stage development in the 1990s:
- --Expapansion and digitalization of existing telephone networks
- --Additional integrated services -- ISDN
- --Introduction of broadband communications to add vision to sound, text and
- data exchange facilities.
-
- As to specific target dates, the Commision has urged that by 1993, 80 percent
- of the subscribers in the European Community should have access to ISDN and,
- by the same year, 5 percent of subscriber lines -- the "critical mass" --
- should be connected to it. The whole program is estimated by the Task Force
- to cost $40 billion.
-
- BATTLE OF THE SYSTEMS:
-
- The flagship of telecommunication vendors competing in an over-supplied
- international market are the digital switching systems. The more modular
- (capable of up-rating), flexible, reliable and economical they are -- or claim
- to be -- the greater their chances of acceptance, at least theoretically. For
- there are other criteria, perhaps more decisive: the main one is politics,
- the preferences of the governments or the telecommunications administrations
- concerned, fortified or pushed by local pressures. That is why all the
- contenders for the purchase of CGCT, France's ailing denationalized second
- digital switching supplier, have armed themselves with a French partner: APT
- with SAT, Siemens with Jeumont-Schneider, Ericsson with Matra. CGCT is
- manufacturing the E10-B, France's Alcatel-designed system. Whoever wins
- possession of CGCT -- and it was, at the time of writing, going to be stictly
- on technical merit -- would introduce a seond switch into the French network:
- APT's 5ESS PRX, Siemens's EWSD, Ericsson's AXE. Or it could even be Northern
- Telecom's DMS 100, as the Canadian supplier was also invited to tender.
-
- Although CGCT provides only about 16 percent of French switching, an outside
- sytem, rival to France's own in what has hitherto been a purely national
- market, will give a powerful psychological and publicity boost to the
- successful contender; and so has Ericsson's break-through in the UK, adding
- AXE to the home-grown System X in the digital network.
-
- Only in Italy among the major European countries have competing systems
- managed to secure a substantial market share alongside the home suppliers
- through subsidiaries: FACE (System 12) and FATME (AXE). Even part of Italy's
- so-called "national-system" was supplied by an outsider -- GTE of the US --
- though more than half the requirements were met by Italtel, which is rapidly
- uprating its own UT system to provide exchanges with capacities of up to
- 100,000 (later 200,000) lines. Under Italy's digitalization program, however,
- suppliers will eventually be limited to two: UT and System 12 (now supplied
- by the Alcatel group) or AXE.
-
- The size of the US market (About 40 percent of the world's public switching
- sales), has ensured a head-start for AT&T, with 31 million lines installed or
- on order (29 million in the US). Alcatel's ITT's 39 million lines (installed
- or on order) are divided between E10 and System 12 while Ericsson's almost 17
- million AXE lines have been sold to 66 countires -- the largest geographical
- spread in the world of any single system.
-
- Table IV gives a fair indication of how the competing major systems have fared
- in terms of installed lines.
-
- TRANSMISSION: THE FIBER OPTIC ROUTE
-
- Although the next generation of satellites will be able to carry a great deal
- more traffic, escalating demand -- especially for Europewide and later global
- DBS (Direct Broadcasting Satellites) -- planned existing and emerging networks
- -- foreshadows increading strain on the land and undersea cable systems. The
- significance of fiber optic development in this eontext alone cannont be
- underestimated.
-
- The speed of replacing copper by optic fiber is, of course, a question of
- national investment priorites and consequently varies from country to country.
- All the US, Japanese and European PTTs as weel as the major public switching
- suppliers are involved, some of the latter on their own, others in association
- with optic fiber specialists. Siemens, for instance, has a joint operation
- with Corning Glass, of the US -- Siecor -- to supply optic fiber for the West
- German and other networks. Italtel, state-owned, is negotiating with
- Flat-owned Telettra speciallizing in transmission for a merger which would
- raise the new group's Italian market share in transmission equipemtn to well
- over 50 percent.
-
- THE SHAPE OF NEW GENERATIONS OF COME
-
- Overcapacity in both public and private switching systems is stressed by all
- the major players; but there is also the technological aspect to global
- telecommunications. Several executives interviewed emphasized the point:
- there are too many systems and some will, perhaps over the next decade, come
- to the end of their technological cycle. For the cycles themselves are
- getting shorter.
-
- One reason may be that several of the present digital switching systems are
- "hybirds" -- i.e. developed from analog predecessors. According to Dr. Hans
- Baur, telecommunications chief and member of the Siemen's management board,
- Northern Telcom's DMS is the only genuine digital system conceived as such --
- which, says Dr. Baur, explains partly its outstanding success in the US and
- increasingly elsewhere.
-
- Mr. F.C. Kuznik, vice-president marketing of APT, talks of "three generations"
- of switching systems, starting with Alcatel's E10 in the early 1970s -- now
- balanced in the merged group with ITT's third-generation System 12 alongside
- Siemans' EWSD and AT&T-Philips's 5ESS PRX.
-
- In the 1990s, Dr. Baur reckons, telecommunications companies would have to
- gain a market share of around 15 percent to recover their costs comforably.
- Mr. Kuznik puts it even higher -- 15 to 18 percent, a share as already noted,
- achieved only by three of the players -- AT&T, Northern Telecom and
- Alcatel-ITT, the last-mentioned with two systems -- or even three, if
- Thomson's E10-MT is counted.
-
- Mr. Kuznik foresees in the 1990s not so much companies as "alignments" behind
- five technologies, a couple from North Aerica, one from Japan, a couple from
- Europe... (Dr. Baur speaks of "five or six"). They may come from mergers
- along the lines of Alcatel-ITT, or firm aliances such as AT&T and Philips; or
- limited partnerships such as GEC and Plessey (in respect of System X); or
- partial takeovers such as Siemens-GTE; or the proposed Italtel-Telettra deal.
- THe escalating cost of developing new technologies -- put at $1 billion per
- switching system some years ago by the then Philips chief executive Dr. Wisse
- Dekker, with ongoing development costing around $200 million a year (Mr.
- Kuznik) -- is one of the main factors of limiting the number of future
- participants. Its globality is stressed in the strongest terms by Mr.
- Philippe Gluntz, executive vice-president and chief operation officer of
- Alcatel NV: "We are one of the few manufactures able to offer the whole range
- of telecommunications equipment: digital switches, all kinds of transmission
- products from copper cables and fiber optics to satellite communications; all
- types of business systems from digital PABXs to microcomputers or electronics
- sub-sets, word processors, etc."
-
- Resources in terms of funds and range of products are vital for the
- prospective telecommunications survivors: but so is teh technology of the
- 21st century.
-
- TABLES:
-
-
- TABLE I
- World public switching equipment sales of leading manufactures
- _____________________________________
- Company Sales of public
- switching equip
- in $ million
- ___________________________________
- AT&T (US) 1350
- Northern Telecom (Canada) 1000
- NEC/Fujitsu/Hitachi (Japan) 1000
- Siemens (West Germany) 950
- ITT (US *1) 850
- Ericsson (Sweden) 750
- Alcatel/Thomson (France) 700
- GTE (US) 350
- Plessey (UK *2) 260
- GEC (UK) 260
- Italtel (Italy) 180
- Philips (Netherlands *3) 130
- Stromberg-Carlson (US *4) 70
- Others (inc. Nokia, Finland) 120
- ----
- 7970
- ___________________________________
- *
- 1) Now Alcatel NV through merging Alcatel/ITT telecommunications intrests
- 2) Involved in talks on merging certain System X functions
- 3) Set up APT to cater for world telecommunications sales outside US
- 4) Subsidiary of Plessey, mainly for US switching
-
-
- TABLE II
- Estimated public exchange sales revenue: $ million
- ____________________________________
- 1985 1986 1986-1990's
- (annual avg)
- ____________________________________
- US 2,249 2,459 2,000
- Europe 2,977 2,724 2,365
- (of which
- digital) 931 1,070 1,626
- ____________________________________
-
-
- TABLE III
- Telephone networks desities world comparions 1984/85
- ______________________________________
- No. of
- resi-
- dential
- connec-
- No. of tions
- No. of lines per 100
- lines in per 100 house-
- Country serice pop. holds
- _______________________________________
- Sweden 5.1 61.5 111.4
- US 114.3 48.3 96.7
- Canada 11.2 44.6 109.3
- West Germany 24.9 40.7 87.6
- France 22.1 40.2 98.0
- Australia 6.2 39.5 91.3
- Netherlands 5.6 39.0 82.8
- Japan 44.4 37.0 80.2
- UK 20.8 36.9 78.4
- Italy 16.5 28.9 68.5
- Spain 8.7 22.5 58.0
- _______________________________________
-
-
- TABLE IV
- Sales of major digital systems, 1985
- ______________________________________
- Systems/Company No of market
- lines share %
- instld
- 000s
- ______________________________________
- 5ESS-PRX (AT&T - APT) 5,555 18.1
-
- DM Series -- Northern 5,269 17.2
- Telecom
-
- E10-B/E10-MT -- 3,600 11.7
- (Alcatel)
-
- AXE -- Ericsson 2,900 9.4
-
- System 12 -- ITT 2,883 9.4
- (now Alcatel)
-
- EWSD -- Siemens 2,479 8.1
-
- GTD -- GTE 1,903 6.2
-
- NEAX 61E -- NEC 1,750 5.1
- (Japan)
- _____________________________________
- 1) System X deliveries, by GEC and Plessey, began only in 1985: they were at
- the time of writing only confined to the UK (1 million lines delivered by
- March this year). Italtel's UT series, too, are relatively recent in their
- uprated form. Stromberg-Carlson (Plessey's US subsidiary): Century series
- are designed mainly for small to medium-sized exchanges. Telenokia's (Finlad)
- DEX series are designed principally for rural networks.
-
-
-