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Cisco Urges Middle East Investment in Integrated Networks

Cisco Systems recently urged delegates at a conference of Arab telecommunications operators and service providers to invest in integrated 'multiservice' data and voice networks to help create the new 'virtual highways' of the future.

The New World of Communications and global competition is forcing many service providers to change or risk disappearing into obsolescence, according to Cisco Systems Chief Science Officer, Dr. Bruce Nelson who delivered the keynote address at today's Middle East Service Provider Forum, which is taking place in Dubai from 6 to 8 April 1999.

"The new rules of the communications world are forcing changes at a pace never seen before in the telecommunications industry," said Nelson. "Telecommunications organisations used to adapting to new technology over a period of years, are now faced with a cost versus performance ratio very similar to Moore's Law in the PC industry, where performance doubles every 18 months. As a result, operators costs per delivered 'bit' of voice or data traffic worldwide are going down at a rate of 100 percent per annum as multiservice networks come into operation."

The Forum, which is being attended by officials representing Arab telecommunications operators (telcos) and communications service providers, focuses on new technologies that allow service providers to deliver voice (telephone) services over public data networks, such as the Internet. The telecommunications industry worldwide is undergoing major changes as the total volume of data traffic being passed from computer to computer over telephone lines, wide area networks and the Internet exceeds the total volume of voice (or telephone) traffic for the first time in history.

"Many forward-looking Middle East telecommunications operators are already striving to close the technology gap between services available in the region and those available in Europe and the United States," said Nelson. "In the 'Old World of Communications' operators and service providers effectively had years to make strategic decisions, but in the 'New World' they are under pressure to review and make significant policy decisions in a matter of months."

"The revenue from telephone minutes is diminishing and the revenue from data packets is increasingly where the subscriber demand is and where the service provider revenue of the future will come from. Like so many of the major technology advances of the last 30 years, new communications technologies are breaking monopolies, creating new businesses and reducing costs for the consumer."

Cisco hopes that the Middle East Service Provider Forum will play a significant role in highlighting the commercial opportunities that new multiservice technologies provide today and help to show Middle East telco how they can use these technologies to limit the negative impact of falling oil revenues, economic slowdown and increasing international competition in the communications industry.

"In the early eighties the Gulf states, in particular, realised the importance of building national infrastructure and the ports, airports and highways to carry goods and people and to promote trade. Today, Middle East telcos have an opportunity to grasp this new technology and build the new virtual information highways of the future," said Nelson.