Gartner Says Next-Generation Network to Begin to Evolve in Next Two Years; Analysts Say NGN Will Allow Calls to Include, Voice, Video, Data, and Multimedia Collaboration.

Business Editors/High-Tech Writers

SAN JOSE, Calif.--(BUSINESS WIRE)--April 10, 2003

As consumers look for ways to simplify their communications to better meet the needs of their daily lives, through PDAs, mobile phones and the Internet, the next-generation network (NGN) will be the underlying infrastructure that will be able to support those communications needs, according to Gartner, Inc. (NYSE: IT and ITB).

The NGN combines three networks (public switched telephone network, Internet and wireless) into a unification of communications networks. This unification focuses on the customization of communications services purchased at the individual subscriber level on the enterprise and/or the consumer side.

"These customized communications services will radically change the definition of what constitutes a call, " said David Fraley, principal analyst for Gartner's worldwide telecommunications and networking group. "In the future, calls will include voice, video, data, TV broadcasts and multimedia collaboration. In many cases, these will be combined into a single communications session."

Gartner analysts said the networking trend toward VoIP and NGN is continuing. However, recent telecommunications sector troubles have converted the IP revolution into a convergence path of TDM and packet architectures. The biggest problem facing NGN vendors is tremendously limited service provider CAPEX budgets. The business environment, complete with numerous service providers' filed and forthcoming bankruptcies, has forced CAPEX spending below the network maintenance level.

"Deferring maintenance expense can occur for a while, but not forever. Delaying those investments might bring carriers into the unfortunate situation, that at a later point, their spending requirements not only have to catch up, but have to exceed previous levels to accommodate the excessive and complex traffic demands, operational expenditure reduction targets, and the necessity to quickly generate sources of additional service revenue," said Bettina Tratz-Ryan, principal analyst for Gartner's worldwide telecommunications and networking group

Gartner said that starting in 2005, the market for the deployment of NGN equipment will show recovery. By 2005, CAPEX budgets will increase to catch up as a result of previous spending restrictions. During the next few years, VoIP and NGN will mature further and carriers will regard them as carrier grade. The equipment will be capable of supporting the highest quality of service-based traffic in most any network and service providers will change their deployment strategies that involve the replacement or upgrade of selective network elements toward a broad deployment for NGN and VoIP solutions.

"By 2005, three different trends will converge," said Tim Smith, managing vice president. for Gartner's worldwide telecommunications and networking group. "These converging trends - technology maturity, service provider readiness and robust CAPEX budgets - will start the eventual unification of the communications revolution which will give consumers ultimate control."

Gartner Dataquest has completed a multifaceted research project called the "State of the Next-Generation Network." This collection of research evaluates what stage the evolution of the NGN has reached, identifies key trends, and profiles 141 NGN-oriented organizations. The project covers 12 main topics, for each of which there are two documents. In a new Telecom Spotlight, we open a window into the research through 12 Spotlight documents. This Spotlight can be found on Gartner's Web site at www.gartner.com/pages/story.php.id.3568.s.8.jsp.

A general introduction to the NGN concept and links to the supporting documents can be found at www.gartner.com/DisplayDocument?id=387858&ref=g_search.

Gartner also has a comprehensive reference database of Gartner research published in the past 18 months on the NGN and related topics. This database can be found at www.gartner.com/DisplayDocument?id=390169&ref=g_search.

This analysis is provided by Gartner's worldwide Telecommunications and Networking group. This group provides an analysis for the full spectrum of telecom and networking issues. To keep up to date on the latest telecommunications issues, please visit Gartner's Telecommunications Focus Area at www.gartner.com/telecom-mkt. To subscribe to Gartner programs, call 408-468-8000 or go to www.gartner.com.

Gartner, Inc. is a research and advisory firm that helps more than 10,500 clients leverage technology to achieve business success. Gartner's businesses consist of Research, Consulting, Measurement, Events and Executive Programs. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, and has 4,000 associates, including more than 1,000 research analysts and consultants, in more than 75 locations worldwide. Fiscal 2002 revenue totaled $907 million. For more information, visit www.gartner.com.