Managing Telecommunications

Lecture 14

Telecommunications Telecommunications is the flow of information among

individuals, work groups, departments, customer sites, regional offices, between enterprises, and with the outside world

The Internet has also opened up a “cyberspace” where

people can be in a virtual world, where organizations can conduct business, and in fact, a place where organizational processes exist. This is providing the foundation for the e-business economy, as just about everything about telecom is shifting

Today’s Lecture

Introduction

The Evolving Telecommunications Scene A New Telecommunications Infrastructure is Being

Built The Telecom Industry is Being Transformed

The Internet is the Network Of Choice Digital Convergence Has Become a Reality The OSI Reference Model Underlies Today’s

Networks The Rate of Change is Accelerating

Today’s Lecture

The Optical Era Will Provide Bandwidth Abundance

The Wireless Century Begins

Messaging is a Killer App

Coming: An Internet of Things

The Role of the IS Department

Introduction

Telecommunications = electronically sending data in any form from one place to another between People Machines, or Objects

Introduction...

Generally, IS departments have been responsible for designing, building, and maintaining the information highway in the same way that governments are responsible for building and maintaining streets, roads, and freeways

Once built, the network, with its nodes and links, provides infrastructure for the flow of information and messages

Introduction…

In early 2000s Telecom became the basis for the way people and companies started working It provides the infrastructure for moving information

and messages South Korea’s largest telecommunications firm.

It is able to transmit data at a rate of 4 megabits per second, about four times faster than the typical cable modem deliver-ing high-speed Internet service to U.S. households.

Introduction...

The company uses radio sensors to track the movement of parts as they move from fabrication shop to the side of a drydock and then onto a ship under construction.

Workers on the ship use notebook computers or handheld mobile phones to access plans and engage in two-way video conversations with ship designers in the office, more than a mile away.

In Past

In the past, workers who were inside a vessel below ground or below sea level had to climb topside to use a phone or walkie-talkie when they had to talk to someone about a problem.

The new wireless network is connected to the electric lines in the ship, which convey digital data

HYUNDAI HEAVY INDUSTRIES CREATES A WIRELESS SHIPYARD to Wi-Fi wireless transmitters: placed around the hull during construction. Workers’ Internet phones, webcams, and PCs are linked to the Wi-Fi system, so workers can use Skype VoIP to call their colleagues on the surface.

Contin…

Designers in an office building a mile from the con-struction site use the webcams to investigate problems.

On the shipyard roads, 30 transporter trucks fitted to receivers connected to the wireless network update their location every 20 seconds to a control room.

This helps dispatchers to identify the location of transporters with orders for parts, shortening the trips each truck makes.

All of the day’s movements are finished by 6 P.M. instead of 8 P.M. By making operations more efficient and reducing labor costs, the wire-less technology is expected to save Hyundai Heavy $40 million annually.

The Korea Herald, March 30, 2010

Sources: Evan Ramstad, “High-Speed Wireless Transforms a Shipyard,” The Wall Street Journal, March 15, 2010 and “Hyundai Heavy Plans Wireless Shipyard,” The Korea Herald, March 30, 2010.

The Evolving Telecommunications Scene

Even with the recent ‘downturn’ (correction?) in some countries – the changes in Telecom are coming fast and furiously. Here are some major changes taking place:

A New Telecommunications Infrastructure is Being Built:

The oldest part of the telecommunications infrastructure is the telephone network

This global network was built on twisted-pair copper wires and was intended for voice communications

It uses analog technology, which although appropriate for delivering high-quality voice, is inefficient for data transmission

Dedicated circuit (switching)

The Evolving Telecommunications Scene ...

The Evolving Telecommunications Scene cont.

A New Telecommunications Infrastructure is Being Built cont.: The basic traffic-handling mechanism had to change

for data Today, the new telecommunications infrastructure is

being built around the world aimed at transmitting data, and consists of:

Wired - fiber optic links

Wireless – radio signals

The Evolving Telecommunications Scene cont.

Both use packet switching, where messages are divided into packets, each with an address header, and each packet is sent separately

No circuit is created; each packet may take a different path through the network

The Evolving Telecommunications Scene cont.

Packets from any number of senders and of any type, whether e-mails, music downloads, voice conversations, or video clips, can be intermixed on a network segment –

– Making these next generation networks able to handle much more traffic and a great variety of traffic

The Evolving Telecommunications Scene cont.

This architecture allows new kinds of services to be deployed much more rapidly

The Internet can handle all kinds of intelligent user devices, including:

– Voice-over-IP (VoIP) phones– Personal digital assistants (PDAs)– Gaming consoles, and – All manner of wireless devices

The global telecom infrastructure is changing from a focus on voice to a focus on data

The Telecommunications Industry is Being Transformed

• The telecom structure of old was originally provided by (often Government owned) monopolies

Only ones with the $ to support set up costs

Public infrastructure

• Gradually, the telecom industry has been deregulated

The Telecommunications Industry is Being Transformed

• The telecom industry is becoming like the computing industry in that each year brings ‘predictable’ (and ‘huge’) improvements

Performance

Capacity

• Bandwidth on fiber is now doubling capacity every four months

The Telecommunications Industry is Being Transformed cont.

‘Last Mile’ problems:Who ‘owns’ the ‘last mile’

In the 1990s, the ‘monopolies’ began encountering competition for “the last mile”

Bottleneck issues (hose to straw) Visualize the world’s networks as huge fire

hoses because they use fiber optic cables that can transmit at a whopping speed of a terabit (1012 bits per second)

1,000,000,000,000

The Telecommunications Industry is Being Transformed cont.

Then visualize the twisted pair phone line coming into your home or business as a straw, only operating at speeds of 56 kbps (104)

10,000

Current Situation

The current wave of growth in mobile data services and traffic is driving connection and handset penetration ever higher.

As the long tail of emerging market users gets connected, the number of mobile connections is projected to surpass the global human population in 2014 (see Figure 1).

At the same time, global smartphone shipments are continuing to ramp up impressively (see Figure 2).

However, minutes of use (MoU) is flattening in some markets as consumers’ usage shifts toward data and away from traditional services such as voice,despite a rising proportion of packages offering unlimited minutes and text messages.

Current Situation…

Hong Leong Investment bank

ICG COMMUNICATIONSCase example: Changes in the Telecom

Industry

• This competitive local exchange carrier provides voice and data services in 25 metropolitan areas in the United States

Contin…

• It was formed in 1984 to provide local telephone service in Denver. It expanded to provide long distance, buying up companies with fiber routes

• It later focused on being an Internet backbone provider, serving ISPs

Contin…

• When the dot-com bubble burst, ICG filed for bankruptcy, but moved out of bankruptcy in late 2002

• ‘Similar’ things have happened in other countries

The Internet is the Network of Choice

What has surprised most people is the Internet’s surprisingly fast uptake for business use

As did the fast plummet of the dot-com and telecommunications industries

The Internet is the Network of Choice…

In the late 1990s, the Internet caught most IS departments by surprise, not to mention the hardware and software vendors who serve the corporate IS community

The Internet actually began in the 1960s when it was called ARPANET, mainly used for electronic mail

By 1993, it was still mainly a worldwide network for scientists and academics, text only - no graphics

The Internet is the Network of Choice cont.

That all changed in 1994 when the World Wide Web was invented (By Tim Berners-Lee at CERN in Geneva.)

This graphical “layer” of the Net made it much more user friendly:

Web sites had addresses specified by their universal resource locator (URL)

Its multimedia Web pages were formatted using hypertext markup language (HTML)

The Internet is the Network of Choice cont.

All the Web sites could be accessed via an easy-to-use browser on a PC

At first populated by computer geeks’ homepages, business (and ‘normal’ people’s) use of the Web skyrocketed by the late 1990s

The Internet has done for telecom what the IBM PC did for computing: brought it “to the masses”

The Internet is the Network of Choice cont.

In 1981, when the IBM PC was introduced, its architecture was open

An entire industry developed around this open architecture. The same is happening with the Internet because it provides the same kind of openness

Like the PC, this openness yields the most powerful solutions and the most competitive prices

The Internet is the Network of Choice cont.

The Internet has three attributes that make it important to corporations:

Ubiquity

Reliability, and

Scalability

The Internet is the Network of Choice cont.

Today, the protocols underlying the Internet have become the protocols of choice in corporate networks, for internal communications as well as communications with the outside world

The norm is now end-to-end Internet protocol (IP) networks

E-COMMERCE

The use of the Internet and the Web to transact business.

Formally, digitally enabled commercial transactions between and among organizations and individuals

Digitally enabled transactions include all transactions mediated by digital technology

XYZ COMPANYCase example: Network Options

• The Internet will be the heart of XYZ’s corporate operation. So the CTO will create:

- An intranet for use by employees

- An extranet for use by suppliers and some large customers, and of course,

- The Internet as the all-important central public network

XYZ COMPANYCase example: Network Options cont.

• Serving remote users: XYZ has 4 choices of communications wiring:

– twisted pair (standard phone line)

– coaxial cable (like cable TV)

– fibre optic (glass fibre that carries signals via light pulses) and

– wireless

XYZ COMPANYCase example: Network Options cont.

• Modems can be:

– standard telephone modems (56kbps) – no longer really a viable option due to size of files (PowerPoints etc,)

– digital subscriber line (DSL) modems at 1.2 mbps 20 times faster, or

– cable modems at 10mbps or 200 times faster

XYZ COMPANYCase example: Network Options cont.• Serving local users: In the office, all the computers

and telephones will be connected directly to an always-on LAN. The various LANs in XYZ’s offices will use hubs, switches and routers to route traffic

• The CTO will likely choose Fast Ethernet Protocol for his IP-based LAN. It has speeds of 100 mpbs (10^8)

• Communicating Between Offices: XYZ employees need to communicate between sites, so they need some sort of wide area network. As expected, the CTO has choices here as well

XYZ COMPANYCase example: Network Options cont.

– Asynchronous transfer mode (ATM) is high speed - up to 622 mbps

– A fairly new option for XYZ to link several offices in a city, or link floors within a building, is a Gigabit Ethernet which operates at speeds of one gbps (10^9 bits per second)

• The CTO is definitely going to base all his decisions on being Internet protocol centric

Extranets

Not long after creating intranets, businesses realized they could extend the intranet concept into an extranet

A special part of the intranet for use by trading partners, customers, and suppliers for electronic commerce

The notion caught on and extranets have become an important component of B2B e-commerce

NATIONAL SEMICONDUCTORCase example: Extranet

• National Semiconductor designs and manufactures semiconductor products

– To gain market share and move into new markets, it created an intranet that the sales force could access and keep up-to-date on products and order products .

– It also created the “National Advisor” to electronically send news, sales reports, and customer information to the sales force and its management

NATIONAL SEMICONDUCTORCase example: Extranet

National also created an extranet for distributors and channel partners, and a Web site for design engineers.

• The Web site is replicated around the globe, with maintenance outsourced to a company with data centres around the globe, which provides hosting and other Internet infrastructure services

NATIONAL SEMICONDUCTORCase example: Extranet cont.

• National’s Web site now supports 1 million design engineers around the globe, who download more than 10,000 data books a day, in about two seconds each

• The company only needs to replicate its site once; the hosting company takes care of global coverage

Summary

The Telecom world is big and getting bigger by the day. It is complex, and getting more complex every day

Don’t worry – there’s plenty of help available!

The first generation of the Internet economy has been wired. The second is unwired

Today telecom is all about connecting and the number of possible connections is about to explode worldwide