Telcos and Internet service providers (ISPs) must adapt their business models or face extinction, warns telecomms consultancy Schema.
In its latest report, it advises suppliers to choose either to market a full range of services, or to specialise in detail-rich offerings in specific markets.
In its in-depth study of the use of IP in businesses, Schema sees a huge battle brewing in the Intranet and Extranet space as different types of supplier jostle for lucrative deals.
Robin Duke-Woolley - senior consultant at Schema and author of the study, ?Communications in the Internet era: the market for IP based services in Europe? - said: ?No-one will make money from commodity services, such as cheaper access. Local ISPs will feel most threatened and will need to provide more depth to their services, such as content.?
National and international ISPs, plus telcos and global carrier alliances, will be fighting fiercely with specialist data neworking vendors. Telcos and international carrier alliances will compete with networking specialists such as Infonet in the worldwide IP market, together with GEIS in electronic data interchange, and IBM with networked IT applications.
This means telcos need to offer a full breadth of service from email and Internet access for the residential market, to consumer online shopping, and moving up to business applications for Intranets and Extranets.
?Service complexity will be more challenging for telecomms companies to deliver. Carriers developing services without in-depth knowledge of user analysis requirements will not survive,? warned Robin Bosworth, Schema director.
The market for IP services in Europe is set to grow exponentially in the next five years as the number of company sites selling goods online will increase from 500,000 to around eight million by 2003. This represents approximately three million companies, or 40 per cent of all European businesses. By 2001, ecommerce will account for 13 per cent of total European businesses revenue, leaping to 25 per cent by 2003, according to Schema.
Data traffic within corporate networks is expected to be almost five times greater than voice traffic by 2003. Three quarters of this will be IP based.
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