End of line for old phone switches

A $300m drop in revenues from traditional telephone switches for telecoms giant Lucent highlighted one of the less obvious trends at Cebit.

The fall last year was not due simply to a massive move from circuit-switched telephony to packet-switched Voice over IP.

Chief operating office Frank D’Amelio explained that all over Europe telcos are either moving all their infrastructure to IP or planning to do so.

He cited BT’s 21st Century Network (21CN), for which Lucent is a major contractor, as an example.

The move is partly to make the networks more efficient, replacing a multiplicity of technologies with single one. But telcos are also desperate to use the new infrastructure to find revenues to replace those lost from old-style voice calls.

This means offering multiple services, and integrating them across platforms.

In the consumer world (as opposed to the services offered to corporates) this means that TV, the Internet and telephony will be available on almost any device.

When the Cebit show floor opens today, Deutsche Telecom is said to be showing a TV via which you can make phone calls.

The boundaries between TV, the web and telephony are blurring, D’Amelio said. 'We are in the first stages of a multi-year transformation to the next-generation network.'

All of which means big money for the likes of Lucent, which only a couple of years back was still in the post Internet Bubble doldrums.

Despite that $300m drop in one segment, total Lucent revenues rose 4.4 per cent to $9.44bn last year and it announced a string of new contracts at Cebit.

There’ll be more news of Cebit on our Test Bed blog.