Ovum-RHK released its third quarter assessment of wireless and wireline spending this week. The firm says that wireline operators increased capital spending 7 percent compared to the year-ago quarter, while mobile capex receded 18 percent. However, mobile revenues rose 10 percent compared to the third quarter of 2006, while fixed were about the same.
A financial person probably can do a lot with those discordant numbers. To somebody who doesn't deal with big picture finance on a regular basis, the surprising figure isn't the wireline increase. AT&T, Verizon and myriad small carriers are pushing ahead aggressively with their fiber builds. What is interesting is the retrenching in wireless spending in light of the continuing launches of 3G networks. It may just be a respite before the onslaught of 4G, but it is interesting nonetheless.
One driver for wired network spending is the replacement of older technologies, such as Asynchronous Transfer Mode (ATM) and frame relay, with Ethernet approaches that are migrating outward from the enterprise to the broader telecommunications sector. This week, Optimum Lightpath, a company that belongs to cable operator Cablevision, hooked up the 2,500th building in the New York City metro area to its Ethernet-based network. Earlier this year, Cox was the first cable operator to crack the top five (at number four) in Vertical Systems' listing of business Ethernet providers.
In the big picture, the reality is that the relationship between wired and wireless networks is changing. This can be seen in fixed mobile convergence (FMC), the IP Multimedia Subsystem (IMS) and other new techniques. Eventually, IMS will enable services to be delivered to any device from any network. If this happens, it will be inevitable that wired and wireless networks meld.
Even if it does happen, it won't happen quickly. For IMS proponents, the headline of this Network World piece -- "Whatever Happened to IMS?" -- is not promising. The writers say that IMS is a great idea in theory, but that it is not progressing quickly. A precursor to IMS is the Session Initiation Protocol (SIP). SIP deployment, the writers say, has been slow. Secondly, the links between IMS and carrier's operational support systems (OSS) aren't robust. Finally, the writers speculate that carriers have little incentive for deploying IMS.
What is happening on the enterprise and the wide-area networks (WANs) beyond are increasingly linked. This Lippis Report begins by suggesting that the big vendors -- including Cisco, HP, Extreme Networks, Foundry and others -- are aiming at converged corporate networks. The writer offers a "sneak peak" at a ranking of best vendors of convergence gear. The point, according to the writer, is that the enterprise emphasis is shifting from discrete and overlaid wired and wireless networks to a converged approach supporting both.