Back from the Bust


Source: Business Week


With the Dotcom bust, the Telecom Industry had gone to a depression. But this article in BusinessWeek says the $900 billion Telecom Industry has roared back to life. It is up and running.

What has happened since the bust in 2000?
* A steady rise in usage of broad band internet connection and that is thanks to sites that use video clps(Eg:You Tube),digital files and the internet phones (Eg:Skype).Statistics show that this year broadband adoption among U.S. adults is expected to cross the important 50% threshold.

*About half of the Internet's transmission capacity was going unused in 2002. Today that pipeline has almost doubled in size, and yet the unused portion is down to about 30%. As a result, the price that companies pay for bandwidth in some parts of the U.S. is on the rise after six years of declines.


An interesting point to note is: A 2001 paper in the American Economic Review, written by Lars-Hendrik Röller of Berlin's Social Science Research Center and Leonard Waverman of the London Business School, concluded that the spread of land-based telecommunications networks in 21 developed nations accounted for one-third of the increase in economic output between 1970 and 1990.


Here are the most popular applications fueling the Telecom revival:

Video: A typical video consumes 1,000 times as much bandwidth as a sound file. So, if one wants to watch a video ( Eg: YouTube,Blip TV etc), one opts for broad band. The telecom companies are happy coz the consumers opt for broad band. It is expected that the next revolution that will give a boost to telecom will be the HDTV usage. If this gets into mass adoption, the usage will be higer as this consumes 10 tmes the bandwidth of regular video.

Web Browsing: The web has changed since then and with social networking kicking off, this has given a big boost to the telecom rebound.

Audio:There was a time when folks used to buy CDs. Now they hear it on the internet. Sites like Pandora.com are going to act as catalyst.

Newsgroups: Knowledge is power. Information shared is information gained. Newsgroups and Online discussion groups have increased the

Internet Phone: :There were reservations that the quality would be bad if it is cheap. but internet phone calling is one of most exciting new applications. It is also one of the fastest-growing programs. Worldwide cable telephony subscribers (who use the Web to make calls) increased to over 22 million in 2006, up sharply from 15.8 million in 2005, according to researcher In-Stat.

Online Games: Playing games online is one of the new engines powering bandwidth usage. Games like Habbo Hotel and World of Warcraft — which has signed up 8 million paying subscribers in a little more than two years — continue to attract growing numbers of enthusiasts.