Ten years gone: A brief history of the great 00s telecoms mash-up

Time is an illusion and decades not nearly as self-contained as people like to think of them in retrospect. But if the 00s will be remembered for anything in the telecom world, it will be for the phenomenal pace of change and disruption that has pushed Asia to center-stage and transformed the industry so drastically that it's still reeling from those changes - and in many ways still struggling to keep up. 

To really appreciate just how much things have changed, it's worth looking back at the state of play in the year 2000, which was ushered in with fear and loathing over the Y2K bug that could cause computer clocks worldwide to reset to the year 1900 - and thus destroy modern civilization.

Which, of course, turned out to be the least of everyone's worries. 

To be sure, the Y2K bug still proved to be a headache for plenty of telcos and enterprises - not in terms of failing networks but in terms of CIOs being forced to justify the money spent on Y2K fixes after it was revealed that some companies had spent millions while others had spent considerably less, regardless of network size. 

But that was nothing compared to what was to come. 

In 2000, the telco sector was riding high on the dotcom boom, with new players like Global Crossing, Level 3, Qwest, Williams, 360networks and others working alongside the world's incumbent carriers to build ambitious fiber networks in anticipation of the coming exaflood of data traffic. 

By the start of 2001, the exaflood was nowhere to be seen, and the stock market started abandoning the dotcoms, leaving the telecoms stuck with a capacity glut that it would take most of the rest of the 00s to recover from. As a point of reference, Level 3's stock price dropped from $132 to $25.

By 2002, Global Crossing was in Chapter 11 (virtually every other next-gen international carrier would follow suit within a year) and Worldcom was admitting to "accounting irregularities" that would eventually earn several executives - including CEO Bernie Ebbers - jail terms. Global Crossing, Tyco Telecom and Qwest also found themselves under investigation.

By the time the dust settled in 2005, most of the subsea assets belonged to Asian players like Hutchison, ST Telemedia, VSNL (now Tata Communications), Reliance and China Netcom. Meanwhile, local incumbents had their own problems in 2000. Most were still struggling with the loss of monopolies and the push to liberalization and unbundling, which was wreaking havoc on bilateral interconnect agreements. For government-owned telcos (of which there were still many, including NTT, Korea Telecom, TOT, CAT and Chunghwa Telecom), privatization was a hard slog as governments were reluctant to lose control of their cash cows. 

And then there was this new technology called VoIP that already threatening to impact margins. It wouldn't be until 2003 that the first telcos would stop fighting VoIP and start looking for ways to leverage it (regulatory rules permitting). By that time, carriers were already making the move toward packet switches (arguments over H.323 vs SIP notwithstanding), and MPLS was gaining favor as a key step to multiservice networks, while the growing popularity of broadband was spurring concerns that we weren't adopting IPv6 fast enough.

Oh and ASPs (application service providers) were going to be the Next Big Thing - provided broadband consumers would actually pay for web content, a concept hyped by many but doubted by others.

And that's just the telco space. For more perspective, consider that ten years ago, the vendor space was ruled by the usual suspects - Nortel, Ericsson, Siemens, Nokia, Alcatel and Lucent. They've since combined into four companies (soon to be three once Nortel finishes its bankruptcy sale) and now face heady competition from Chinese players (Huawei and ZTE) and router vendors (Cisco and Juniper). 

In the wireless sector in 2000, the ink was still wet on the ITU's 3G standards, and auctions were underway with some expressing concern that the cost of rollouts was going to be more than expected. I'd go on, but you know what happened next (Apple), and I'm almost out of space.

Obviously, all of this set the stage for "convergence" - possibly the most overused word of the 00s, but it's also the most appropriate, as the telco, internet and mobile sectors have blended (albeit messily) into the packet-based Telco 2.0 mash-up we have now and all the uncertainties that have come with it. 

In 2000, the telecom sector was alive with possibilities because everyone thought they knew where they were headed - which was largely because they were navigating with old, reliable business models.

As we head into 2010 and the next decade, the sector is alive with possibilities for the opposite reason - no one knows where all this is going and who will be left standing, which invites the kind of innovation the industry needs to push forward. And as the predictions in this cover story suggest, the next decade of the millennium is going to be an even wilder ride. Strap in. 

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