Dear Colleague,

Welcome to another issue of RAD at a Glance, the newsletter from RAD Data Communications about developments in the communications industry.

ACCESS TRENDS

What Lies Ahead for the Telecom Industry?
by Zohar Zisapel,
Founder and Chairman of RAD Data Communications

We all remember, generally with frustration, the explosion of the dot.com and Telecom bubble in 2000. Prospects for the future looked dire indeed, and yet the market changed direction at the end of 2002 and began to grow again. At first, this growth appeared to be a mere technical blip or temporary phenomenon, but this trend has continued steadily until today. True, the telecom market is only growing 10-15% per year and not at the previous rate of 100%, but many industries would be very happy with a similarly "modest" growth.

What lies ahead for the telecom industry? In my opinion, the market will continue to grow, but large-scale shakeups and changes will take place along the way in the internal make-up of the industry, particularly in the following areas:

Wireless
In the past, we wrongly believed that the electromagnetic spectrum is limited in its capacity and therefore most communication will always be transmitted through wires. We believed that wireless communication was only meant for those on the go who logistically could not be connected to wires. However, this capacity limitation did not actually exist, but was a result of the inefficient use we made of the electromagnetic spectrum: every user received their own exclusive frequency in order to prevent interferences. This type of approach can be compared to giving every driver their own private road in order to prevent accidents. Today, radio devices are smarter and more flexible, and they know how to prevent transmission interferences between users who are sharing the same range of frequencies. Therefore, it is now possible to increase the capacity of the electromagnetic spectrum tenfold.

WiFi is a good example of the above development. The range of frequencies that in the past was allocated to public WiFi were junk frequencies. Since these frequencies are the same as those used in microwave ovens, which transmit high power and create a lot of interference, no one was willing to pay for it. And yet today, not only do microwave ovens use these frequencies, but so do personal computers, telephones, games, toys and more. This trend will steadily increase and allow us to get rid of many more wires as long as radio devices continue to become smarter, more computerized and better programmed. And who of us wouldn't want to get rid of the telephone and television cables in our homes? Why do we have to renovate our house every time we want to move the plasma screen? Why does every office need its own Internet and telephone infrastructure? In my own office, for example, this type of infrastructure was installed with four (!) different points to take into account all possible places for putting my desk.

Video
Video technology is making tremendous technological advances, such as HD, VOD, MPEG-4 compression, DVR, IPTV and DVB. Some of these technologies are making a significant impact on various markets, including IPTV, VOD, DVR, and DVB-H. These types of changes will alter the power relations in existing markets and lead to significant growth of new markets.

In my opinion, certain combinations of video and other technologies are particularly interesting, such as the combination of video with the world of communications, like video conferencing and IPTV, and the combination of video with mobility, like video in cell phones (for both communication and entertainment) and in cars.

Internet
The Internet is finally fulfilling its promises from the nineties, and the amazing successes of Google and Skype indicate that this revolution will continue. Web communities are now the magic word for Internet startups: Digg, Del.icio.us, Facebook, YouTube and MySpace are just some of the examples of the proliferation of Internet communities. But don't get too excited: once the subject appears in many other articles like this one, it will be too late to catch the boat!

The world is not flat - it slopes towards Asia
The world is not flat - it just weighs heavily towards Southeast Asia. This incline is clear if we look at the geographic distribution of the number of Internet, cellular phone, and Skype users. Asia has already surpassed the US and Europe in the number of cell phones (41% as opposed to 11% and 19% respectively), and Internet users (36% as opposed to 23% and 24% respectively). The number of Skype users is still higher in Europe - 48% as opposed to 27% in Asia and 13% in the US. However, if we take into account the fact that Skype was founded in Europe, and look at the growth rate for Skype users in Asia, it is apparent that the day is not far off where the greatest number of Skype users will be located in Asia.

The latest surprising development is that the number of Japanese and Chinese blogs (43%) surpassed English blogs (39%), and the number of Asian blogs is growing at a faster rate than English ones. It is interesting to note that Japanese and Chinese bloggers are most active during the early morning hours and in the evening, as opposed to the English-language bloggers who are most active…during work!

Broadband, Security, Storage
The hunger for bandwidth appears to be infinite, and customers who have used it just want more, and even become addicted to it. As the demand grows, so does the need for greater security and storage. Security is a crucial aspect of broadband since the greater the number of people connected to the network, the more important security is. In addition, the proliferation of high quality applications and video brings with it the need for more storage. As these needs are met, the demand for bandwidth grows even more, creating an infinite cycle of growing demand and a growing need for security and storage. We are just in the beginning of this cycle and there is a long road ahead filled with large infrastructure investments.

And the next telecom heavyweight champion is…
The next few years in the telecom industry will be fascinating. Huge battles lie ahead for the technological greats: WIMAX vs. 4G, Cable vs. the Carriers, Skype and VOIP vs. classic telephony, wires vs. wireless. In the course of these struggles, much value will be lost, but new value will also be established. This is an opportunity for new players to enter the market and find their niche, as long as they choose the right trends and technologies.

GENERAL NEWS

RAD Opens R&D Center in China for PON Technology

RAD Data Communications has announced the establishment of a research and development unit in Beijing dedicated to passive optical network (PON) technology. This is the company's first R&D facility in China. Full story

SUCCESS STORIES

Bezeq Selects RAD Solution for Ethernet Transmission Service

RAD Data Communications has supplied Bezeq, Israel's incumbent telecommunications operator, with thousands of different customer premises devices for the carrier's "Ethernet over SDH" service to enable enterprise access of up to 2 Mbps over copper, and surfing at bandwidths between 4 Mbps and 155 Mbps over fiber optics. Full story

RAD Enables Independent European Telecom Provider to Offer PSTN Access over a DSL Infrastructure

Ventelo, one of Europe's largest independent providers of telecommunications services, has chosen a TDM pseudowire solution from RAD Data Communications to provide PSTN access over IP DSLAMs. Full story

What Do the Rolling Stones, a Brazilian Cellular Network and Auto Dealership All Have in Common?

A RAD Data Communications wireless multiplexer provides them quick deployment of voice and data at half the cost of a conventional solution. Full story

NEW PRODUCT

RAD LA-110 Integrated Access Device Provides Hard-to-Find Synchronous Bandwidth Solution for Medium-Sized Enterprises

RAD Data Communications has unveiled version 3.17 of its LA-110 integrated access device (IAD), which provides an ideal synchronous bandwidth solution for medium-sized enterprises. Version 3.17 supports four SHDSL pairs bonded by inverse multiplexing. The combination of DSL technology and inverse multiplexing capability positions version 3.17 of the LA-110 IAD as an ideal solution for medium-sized enterprises. More details on LA-110.

RAD Introduces Version 2 of its IPmux-11

RAD has introduced version 2 of its popular IPmux-11 TDM over IP (TDMoIP®) pseudowire gateway. The IPmux-11 reduces operating expenses by delivering TDM, data and LAN services for small and medium-sized enterprises (SMEs) over IP/Ethernet/MPLS networks, while ensuring strict priority for TDMoIP traffic over the network link. Version 2 encapsulates TDM traffic over MPLS as well as UDP/IP, enabling a static handoff to MPLS networks while saving up to 24 bytes of overhead per packet. It also offers a resilient system clock with a fallback mechanism, which supports TDM equipment requiring synchronization between all E1/T1 links. More details on IPmux-11.

WHAT'S NEW ON-LINE

2007 RAD Catalog

RAD's new 2007 product catalog is now available as a PDF file.

Sincerely,
Reuven Eliaz
Editor, RAD Data Communications