ringcentral-team
RingCentral Team
April 2, 2012

As PSTNs Stagnate, Telecom Innovation Accelerates in the Cloud

Traditional phone networks – known within the telecommunications industry as Public Switched Telephone Networks or PSTNs – have remained largely unchanged since the early 20th century. Now, however, telecom companies are leapfrogging the dated technology of PSTNs and developing innovative services that leverage cloud computing.

The Long Reign of PSTNs
The first PSTN was born from research conducted by Alexander Graham Bell and Thomas Edison in the 1870s. At the time of their invention, the first transcontinental railroad was less than a decade old, so the possibility of connecting instantly with a person hundreds or thousands of miles away was nothing short of revolutionary.

Yet, even as railroads were supplanted by air travel and interstate highways, Bell and Edison’s original concept received only minor updates. Since dial pulses and analog signal transmissions first appeared in the 1920s, virtually nothing about the PSTN has changed.

But Times Are Changing
A confluence of factors is finally spurring progress within the telecom sector. The first is related to connectivity: There are, remarkably, more cellphones in the U.S. at present than there are people, and consumers are now accustomed to being reachable at all times. Thus, hardline-equipped PSTNs simply do not provide the level of connectedness that the modern world requires.

The second factor is the rise of the internet. It’s virtually impossible to imagine how today’s workplace would function without the web – and there’s little doubt that workers are far more productive now than was the case in the pre-internet era.

A third factor is the emergence of high-speed data networks. Fast internet connections are available virtually anywhere, permitting the transmission of vast quantities of data (and providing fuel for advanced service innovations).

The Cloud Emerges
Into the telecom landscape of the present day – one where constant connectivity, always-on internet and lightning-quick data speeds are the norm – comes cloud computing. Thanks to the wide availability of internet access and speedy broadband networks, it’s entirely possible for individuals and organizations to access every piece of data they own and every service they use in the cloud. And because cloud-based solutions free end-users from maintenance headaches and make information and services available anywhere, cloud computing is rapidly taking hold in the telecom industry.

Witness, for example, the competitive landscape in the Taiwanese telecom market. The island’s three largest network operators have cloud-based services in their respective pipelines, English-language newspaper The China Post reported in late March. Cloud technology is poised to explode in Taiwan over the coming years, the paper added: The market for cloud services is expected to be worth well over $1 billion between 2012 and 2015.

In the U.S., too, cloud solutions are getting noticed. Both the second- and third-largest telecoms, Verizon and CenturyLink, last year bought major cloud players to gain a foothold in the burgeoning cloud-technology market.

The Cloud and the Mobile Future
Around the globe, the cloud’s expansion should remain torrid – particularly as mobile web usage continues to grow. Executives of the world’s most prominent telecom suppliers said as much at the latest Mobile World Congress, held in Barcelona in February. Cisco Systems CEO John Chambers – echoing the mood of the conference as a whole – remarked in a speech that the potential for new cloud-based services is vast. “The cloud offers carriers the opportunity to bring new services to consumers at a faster pace than ever before,” Chambers observed.

The mobile web is already a force to be reckoned with. According to Cisco, eight times more data was transmitted via mobile devices last year than over the entire internet in 2000, and there’s no reason to think it will slow. Thus, as consumers and businesses demand more connectivity options and higher-quality services, cloud-based telecom solutions are likely to keep gaining traction.