A major US consulting firm has warned telecoms companies that the computer industry is about to steal their crown, through the Internet.
Werner Knetsch, head of global telecoms and IT at the Boston-based consultancy Arthur D Little, was speaking at the Business Online 97 conference in London last week. He told delegates that the computer industry is using the Internet as a "Trojan Horse" to take customer control and market share from telecoms providers. His argument was that computer firms are making massive investments in end-to-end services over the Internet such as fax and voice, which could supplant the services currently only offered by telecoms operators.
"Telecoms companies must stop regarding the Internet as a peripheral phenomenon," warned Knetsch. "They must recognise just what the new protocols, advances in compression technologies and so on are doing for the computer industry's penetration into telecommunications."
He added that the capability to make high-quality telephone calls on the Net is rapidly becoming a reality, endangering telecoms revenues.
He said the answer was for telecoms providers to offer value-added services.
"There are many players in the telecoms industry who must quickly become much more aware and much more innovative with their services, or face relegation to the role of network access provider," he concluded.
His remarks were rebuffed by telecom industry representatives. David Cullen, a director of the Telecommunications Managers' Association (TMA), said Knetsch's view was "a gross overstatement".
"I don't believe we will ever reach a point where there is so much spare bandwidth available that high-quality phone calls can be made in volume over the Internet," he commented.
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