Complementary, not competitive, New services restore old ones, telecom study reveals

The telecommunications industry enjoyed strong growth in 1996, posting an 11.1% gain from 1995 to $298.2 billion, says a report by the Arlington, Va.-based Multimedia Telecommunications Association.

The growth rate - more than twice that of the overall U.S. economy in 1996 - did not surprise the study's authors. What did surprise them was that growth came not only in areas like emerging services and technologies, but also in older technologies that were thought to be threatened by the newer ones.

"Areas that were at one time considered competitive have proved to be complementary," said Arthur Gruen, co-author of the report and a principal at the New York-based telecom consulting firm Wilkofsky Gruen Associates.

Computer/telephony integration (CTI) and PBX are two examples. "New technologies tend to stimulate demand for all kinds of ancillary things," Gruen said. "CTI is now viewed as an add-on to PBX. You are looking for CTI capabilities that run on top of what you already have installed.

The same can be said for frame relay and asynchronous transfer mode, as well as for cellular and paging services, Gruen said. People are finding ways to combine technologies rather than drop one to pick up the other.

In 1996, CTI software and hardware sales jumped by 44% and 52%, respectively, resulting in a $668 million market for CTI software and $218 million in hardware, the report showed. PBX sales also rose by 11%, from a 1995 level of $3.2 billion to $3.6 billion.

Increased interoperability and evolving standards also fueled this growth, said Mary Bradshaw, vice president of MTA, and project director and editor of the report.

"There is now confidence on the part of end users that technologies will work together," she said. "This drives sales because people are confident that what they purchase today will be open enough to work with other systems tomorrow.

Companies that excel at integrating computer and telecommunications systems and products will benefit from these trends.

"The market can grow in direct correlation to the ability of the sales force to integrate these solutions," said Bradshaw. "The companies that can help their customers identify the best use of bandwidth by helping them shop for dial tone and the best blend of hardware and network will grow."

1997 July July 15-17, Best Practices for Billing and Customer Care in Telecom Washington, Madison Hotel, (800) 882-8684 July 20-23, OPASTCO Summer Convention San Diego, Marriott, (202) 298-2328 July 29-30, Profiting From Internet Service Provision San Francisco, Hyatt Fisherman's Wharf, (312) 540-5685

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