Archive for November, 2000


Friday, November 24th, 2000

A recent Yankee Group study, Taxonomy of Selling in a Multi-channel World, echoing the importance of customer service, stressed that companies often spend too much time on the mechanical side of selling and not enough time on influencing the customer.

The Yankee Group advised that successful selling needs a balance of online and offline selling strategies and that a company needed a combination of technologies. In other words, selling online must also integrate and enhance the traditional methods of selling.

The survey saw the need for a unified platform for the entire range of selling processes across all channels to provide a complete view of the customer’s behaviour and transaction patterns, and that no single vendor provided either the full range of application or platform capabilities to build such a system.

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Friday, November 24th, 2000

Research company, Publications Resource Group (PRG) conducted a survey whereby delegates were asked 38 questions relating to the current and future development of Bluetooth applications and services.

Key finding include:

– End-user products are expected to hit the shops before mid 2001. 76% of respondents felt that Bluetooth end-user products will be in the shops between the fourth quarter of 2000 and second quarter of 2001.

– Mobile phones are expected to dominate the early Bluetooth market. When asked which product will kick-start the mass market for Bluetooth devices, 49% thought it would be mobile phones. Furthermore, when asked to choose the three areas with the largest number of Bluetooth devices available in 2005, mobile phones was the most selected option, followed by mobile computers and wireless peripherals.

– Add-on cost for Bluetooth thought to be between $11-$25 by the end of this year, but under $5 by 2006. Although 44% of respondents felt the price per unit for a complete Bluetooth solution would be between $11 and $25 by the end of 2000, 63% felt it would fall to below $5 by the end of 2005.

– Operators expected to launch Bluetooth services in under 18 months. Most respondents (62%) felt that operators would be confident to market launch Bluetooth services within the next 7 to 18 months.

– Interoperability key to the success of Bluetooth. Ensuring reliable interoperability will be crucial to the uptake of Bluetooth. While 30% of respondents though that interoperability would be one of the two greatest influences on the take-up of Bluetooth, 33% thought it would be one of the biggest barriers.

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Wednesday, November 1st, 2000

During the mid-nineties, the effects of increased levels of competition at infrastructure level became evident. Increased network coverage, product innovation, lower tariff and handset prices, improved levels of customer service and new distribution strategies have all contributed to the continued growth in the market.

Mobile telephony is one of the high growth areas in the Australian market. However, Australia’s rank in terms of penetration rates for mobiles slipped from 5th in the world in 1996, to 7th in 1997, 9th in early 1999 and by the middle of that year its position had dropped to 16th place. This was mainly due to the relatively high prices charged for mobile calls. Most other countries lowered their prices during the late 1990s. However, since 2000 Australia is picking up again and will most certainly work its way back to a higher ranking on this list.

By mid-1995, there were more than 2 million cellular subscribers in Australia; just over 6 months later the 3 million mark was reached and by late 1998 six million people had a mobile phone. Growth slowed significantly over 1998/1999, standing at around 1% to 1.5% per month. By the end of the year Optus started to increase its competition push by offering very competitive prepaid service, growth started to pick up and reached 1.5%-2%, further increasing to just above 2% by mid-2000. This was driven by competition through innovative new packaged prices, resulting in an effective price decrease of around 25%. However, the operators were able to do this by offering mores services for the same price. This is important to note, as that allowed them to maintain the ARPU at around $750.

By mid 2000 Vodafone more than matched the Optus offering and took back its leading position in the prepaid market. By October One.Tel was also stung into action, as a key player in the youth market they had to match the price offerings from their mobile rivals in order to maintain its position in the market. In that same month Virgin Mobile launched its services in the Australian marketplace.

As a result of all these activities the penetration of cellular phones in the Australian population had by the end of 2000 grown to close to 50%.

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Wednesday, November 1st, 2000

Current development surrounding C&W Optus could mean the end of competition in Australia – as well as the nail in the coffin of the regulatory system in Australia.

From the start of deregulation the government has been picking winners, rather than putting real competition in place. Instead of breaking up Telecom and OTC they bound them together, thus establishing an even stronger monopoly. At the same time, one other competitor was allowed into the market, and they were handed, in the form of a ballot, 10% of the Australian market. No competition was needed – it was just given to them. It is no wonder that for the first six years of competition Optus didn’t constitute any real challenge – they just stayed happily 10% under the prices charged by Telstra.

Service providers such as AAPT, Global One, WorldxChange and others didn’t even rate a mention in the regulations that were introduced in 1992 While this was rectified in 1996, at the same time the incumbent’s position was further improved by the self-regulatory system that the government introduced. This provided Telstra with the unique opportunity to frustrate and delay the introduction of competition by 3-5 years – a situation that still exists in late 2000.

On the mobile front, the government nurtured the happy triopoly by not forcing the operators to establish national roaming, number portability and optimal roaming.

Despite this, competition slowly began to make inroads in Australia, especially in the fixed voice market, since competitors were able to win customers by better prices and better services. However, all together, these competitors didn’t get more than 15%-25% of the market, as the incumbent has maintained its iron grip on the local loop and all the competitors are still dependent on them for access to this network.

In the meantime, to make matters worse, the market has moved on from voice to data services and suddenly both the nation and Australian businesses are beginning to see that access to the right IT&T infrastructure and services is essential if they are to remain competitive in a rapidly globalising world.

The national infrastructure has not previously been perceived as a national asset and the regulator has now discovered that Telstra, by virtue of its protected status, has not looked after the network, with the result that the high-speed services essential for the new economy are not possible in the foreseeable future. According to Telstra there won’t be more than 650,000 ADSL users by 2005. We estimate that at this very moment there is an unmet market of around 750,000 customers, if the price would be right (max $50 per month). But Telstra owns the network, they control it, and they therefore hold the country to ransom.

Revolt in the UK

Now, if you think that this is a doomsday prophesy, you only have to look at the regulator, Oftel, in the UK. The UK was the first to deregulate in Europe; however, they are now running well behind the rest of Europe and the British economy is beginning to be affected. And because of the economic importance of the situation – especially in the very competitive European market – the business people in Britain are now in revolt. They have even complained to the European Commission and it is very likely that the head of Oftel, David Edmonds, will be replaced.

The British business leaders blame Oftel for the lack of competition in the UK. Their major complaints are:

– no national competition;

– no competition in leased data lines; and

– far too slow introduction of ADSL.

Oftel is accused of following the lead of the incumbent rather than promoting competition. The level of competition in the UK is going backwards, especially in relation to high-speed services and BT’s competitors, as well as other businesses, are now threatening to take legal action.

Unfortunately, Australia finds itself in a similar position. At the recent World Economic Forum Australia was warned that it was lagging behind in the IT&T world. With Optus exiting the market, the market will once again resemble a one-horse race. The key issue continues to be the lack of access to high-speed networks. Telstra is adamant that it will not provide access to its competitors under the conditions that the ACCC has promulgated, and under the present regulatory regime Telstra can delay the process by 3-5 years. The question is how long will the Australian businesses and the Australian economy accept such a regime.

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Wednesday, November 1st, 2000

Jinx net was created in October 2000 by Joel Grant and Wayne Grant. They started Jink net after being dismayed at the high cost of broadband Internet access in Australia.

Jinx net intends to offer free broadband Internet access. To offer this they rely on advertising revenue to fund Internet access. Their jinx-explore navigational window will display advertisements.

Upon rollout of this service there is a $400 one-off joining fee. This fee includes the cost of a contractor making a house call. The contractor will configure and place a Network Interface Card in the computer. Included in this price is the software and special cable modem to enable access to the Internet.

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