Carriers say telecom fuels economic growth

Carrier executives pushed telecommunications as a powerful driver of economic growth at the NXTcomm trade show on Tuesday, and their progress reports on building out their own networks indicated they may be right.

“Connectivity is, always has been, and always will be the foundation for commercial velocity and economic growth,” said Randall Stephenson, chairman, president, and CEO of AT&T, in the first keynote address of the annual telecommunications industry gathering. Telecommunications, and especially mobile technology, is playing the role that seaports, railroads, and roads did in the past, he said.

While Stephenson and executives from Verizon Communications, Qwest Communications International, and Australia’s Telstra frequently claimed to be changing the world during the two hours of speeches and a panel discussion, it was clear that, at least in some cases, they are putting big money into the economy.

Asked how the build-out of their TV services on new fiber networks is going, AT&T, Verizon, and Qwest executives said there was no more question whether those services were the right thing to do.

Verizon now has 1.2 million subscribers on its FiOS high-speed data and video service, said Mark Wegleitner, senior vice president for technology at Verizon. The carrier’s biggest challenge is building out its metropolitan-area networks to support the growth in bandwidth demand from those services, he said.

“It’s getting our technicians trained and staff hired and trained to meet the growing demand,” said Chris Rice, executive vice president for shared services at AT&T. Rice’s company, which started rolling out its own U-verse fiber-to-the-node service after Verizon introduced FiOS, reported 379,000 subscribers to the service in April and forecast 1 million by the end of 2008. Both services offer standard and high-definition TV channels, video on demand, and voice.

Telstra CEO Solomon Trujillo delivered superlatives about the Australian carrier’s Next G network, which uses HSPA (High-Speed Packet Access) technology and covers nearly 100 percent of the country. It operates at 14.4Mbps, with speeds for individual users averaging about 3Mbps to 4Mbps, Trujillo said. The service has approximately 1 million subscribers, according to Telstra. Later this year, the company will upgrade the network to 21Mbps, and Trujillo said his goal is to reach 42Mbps by the end of 2009. Telstra now gets more revenue from data services than from SMS (Smart Messaging Service), and mobile advertising is growing rapidly, he said.

NXTcomm continues through Thursday.