BuddeBlog

We have just added this country to our section on Africa. Here is a brief introduction.

Madagascar is an independent island republic lying off the East Coast of continental Africa. Telecommunications in the country is undergoing a major revolution in the way services are delivered with the privatisation of the monopoly fixed-line operator, Telecom Malagasy (Telma) – expected during 1999. The Madagascar PTT Ministry holds 66% of Telma, while strategic partner FCR holds 34%.

Under difficult economic and environmental circumstances, Telma faces a constant challenge with network deployment. Although Telma is underdeveloped, the prospect of privatisation has attracted the interest of major international operators.

With rural telephony a critical issue, the government has overseen the creation of a Telecom Development Fund (TDF), a universal service fund which will be available to any operator willing to deploy networks in specified and underserved remote regions. New operators will be obliged to aim for 95% coverage of services around the country and a teledensity of 1%.

FCR and Telma formed Data Telecom Services (DTS), a joint venture providing Internet access and data transmission services using the national VSAT data network. FCR holds 49% of DTS. FCR also has a stake in mobile operator Société Malgache de Mobiles (SMM).

The global media services agency, Zenith Media, claims that European television companies will soon earn more from pay-TV subscriptions than from free-to-air TV advertising.

According to Zenith, the next ten years will see pay-TV revenues grow to US$60 billion, due to the increase in digital services, whereas net advertising spend will increase 37% in real terms to US$51 billion.

By 2008 approximately two-thirds of Europe’s 182 million TV homes will be digital and 55% of these will be paying for multi-channel packages – as opposed to 41% in 1998.

Other predictions from Zenith are:

- cable will remain the most popular method of receiving multi-channel TV;

- growth in cable and satellite dish penetration will be roughly equal;

- high program ratings were becoming less common as TV audiences fragment.

European TV Revenues

Revenue 1998 2002

Pay TV subscriptions US$19 billion U$32.5 billion

Free-to-air TV advertising US$25 billion U$31.8 billion

(Source: Paul Budde Communication based on data from Zenith Media)

It is very disheartening to constantly see decisions being made within our industry that make using the Internet and other information highway related developments less accessible to regional and rural customers.

It is great public relations for the government and the industry to take advantage of these emotive regional issues, and they use every opportunity to demonstrate that they are deeply concerned about rural people. However, time and again it becomes obvious that the opposite is actually the case. The latest item we can add to this sorry list is Telstra’s withdrawal of the Call Diversion Number Only (CNDO) service.

CNDO is a redirection service offered by Telstra, mainly aimed at businesses that relocate. Unfortunately the service has been misused by ‘clever’ businessmen to advertise a local number for their service, while they actually live 100Kms or more away. This activity was notified by the Office of Fair Trading and the ACA ruled that changes had to be made.

However, regional ISPs are using the CNDO service to extend their reach to more remote customers. As an example, our ISP Hunterlink has ‘real’ POPs in Newcastle, Maitland, Singleton and Muswellbrook – but the other areas are covered by installing a line in, say, Swansea to cover the Wyong (and Bucketty) area. That line is simply programmed to redirect to one of their real POPs – in this case, Newcastle.

Each time a customer calls one of these lines they pay the normal local call fee and Hunterlink also pays a local call fee for the redirection service. We at Paul Budde Communication are not directly affected by this because of our ISDN link, but everybody else in our Bucketty community is.

Only a very small number of customers use this service, and hence the revenue that ISPs (and for that matter Telstra) stand to lose is tiny, but people in most of these areas will lose the ability to access the Internet at local call rates.

By making Telstra remove the product, the ACA has set in motion a process which is contrary to the Federal and State Governments’ intention of providing Internet connectivity to the bush. The alternative for some country areas is a $3/hr STD special to an ISP. Bearing in mind the often unreliable line qualities, these customers are charged $3 every time the call drops out. Another expensive alternative is Big Pond’s rural connect at $7/hour. The CDNO service has been a great alternative that assisted rural customers with Internet access at prices similar to the city dwellers.

Hunterlink and other regional ISPs have mentioned this to community groups and local councils. These organisations are keen to lobby the ACCC/Telstra/Federal Government or whoever they need to, so that this issue can be looked at again. However, with such a small number of users affected, the amount of noise they can make is limited.

Given the low number of users these areas cannot afford to install their own POPs – even with RTIF funding they will just go broke after a few years. While admittedly CNDO was never intended to assist regional Internet users, it would be a worthwhile community gesture if the regulators and Telstra were able to work something out that would keep the service available for these remote users.

The battle continues. The media barons and their entourage have held court in Canberra and their political vassals, headed by the Prime Minister, were in enthusiastic attendance.

Kerry Packer preached the virtues of HDTV and told the gathering that it was a lie that HDTV would be too expensive for the populous – prices would come down to make it affordable for all.

However, as we have indicated previously, Kerry Stokes got cold feet and was no longer prepared to back the broadcasting monopoly. He knows, as does Packer, that HDTV is dead. But by flogging this dead horse they will be able to delay the introduction of interactive TV services just like they did with pay TV. The broadcasters, with the help of their political allies and regulators, were able to delay the introduction of pay TV by 20 years and now the cartel is pulling out all the plugs again to do the same with interactive TV. They know that TV programming will move to the Internet (or its successor) and they are of course frightened to death that this would signify the death knell of their half-century reign over the Australian media.

But more and more cracks are appearing. The TV industry has already made a stand about the closing date of the current analogue system set for 2008. It now says that if the transfer from analogue TV to HDTV is not completed by that time that the government will be obliged to keep this service open. Packer’s Minister for Broadcasting, Richard Alston, was only too pleased to assist his master and provide an HDTV monopoly to Mr Packer & Friends. He doesn’t care. By the time the whole thing collapses he won’t be in Canberra any more and politics has a short memory.

The broadcasters are shouting: ‘look at Internet TV, what appalling quality, who would want that?’. True, I will be the first to admit that its current quality is well below acceptable viewing standards. But these are very early days. As I have said many times – look at traditional TV. The Americans have the worst TV quality in the world (NTSC) but this hasn’t stopped them from becoming the TV country they are. It will be the content that will rule and, as we can see with radio webcasting, there will soon be hundreds of TV stations available over the Internet and who will need the current broadcasters for that?

‘The Net will be the telly’, as we said in our August editorial and this is exactly what frightens the barons and by trying to monopolise digital TV they will be able to delay the introduction of innovative new services and stifle competition.

It will be very interesting to see if the government will be able to stand up to the media barons. It is not an election year so we might be lucky. All options should be kept open and full competition should be available in the brave new world of e-entertainment and e-communications. The government has said it will present its findings in September.

I was recently approached by Michael Valos at Deakin University regarding a research project entitled ‘Measurement of Technology-Delivered Service Quality in IT and Telecommunications Project’.

As this is becoming an increasingly key issue (the key issue) in our industry, I thought it appropriate to share this information with you and to urge you to seriously consider the subject of quality.

Customer services are going to rule our industry and those companies who are able to provide the customer with the best possible services will be the clear winners.

The convergence of IT and telecommunications through the twin drivers of e-commerce and CRM (customer relationship management) is increasing the importance of service quality and performance measurement. These technologies offer management, employees and customers the ability to make superior decisions and obtain self service. I believe that organisations which can deliver superior service quality through technology will have a sustainable competitive advantage.

In order to improve understanding of the implications and applications of these converging technologies the Deakin University project is proposing a study, which develops measures of technology-based service quality for telecommunications and other forms of IT services. We intend to be able to link these measurements to customer loyalty, lifetime customer value and organisational performance.

Organisations interested in taking part in the study may have particular or multiple aspects of technology-based services. These could include Management Decision Making software, Call Centre CTI or IVR or Data Mining, or Supply Chain ERP software applications, front office service software etc.

The research will be conducted by:

- Associate Professor Pratibha Dabholkar, University of Tennessee, one of the world’s foremost authorities on technology-based service quality measurement.

- Dr. Michael Valos, whose recent strategy implementation research was the subject of a feature in the leading Australian business magazine. His findings were disseminated to executives through Australian capital city conferences.

It is possible to participate in the research either as a seller of technology or as an end user. We welcome participants from Australia or the United States.

It is also likely that some organisations taking part will have multiple areas of their telecommunications or IT business that they would like measured. Other participants may just be interested in a single area.

The first study will probably commence in late 1999 and the second in early 2000. Interested parties from countries other than the USA and Australia are welcome to take part.

Please contact Michael Valos at Deakin University, Melbourne, Australia on e-mail michael.valos@deakin.edu.au or phone on 61 3 9244 6168 to discuss participation costs.