BuddeBlog

The Hilton Hotel in Auckland installed a digital newspaper kiosk that offers guests the latest editions from 98 newspapers in 43 countries.

They include renowned titles such as the International Herald Tribune, USAToday (VS), the Los Angeles Times (VS), Sports Nippon (Japan), El Pais (Spain), Komsomolskaya Pravda (Russia), Le Monde (France), Times of India (India), and El Economista (Mexico) The Telegraaf (Netherlands).

A second digital newspaper kiosk has been installed in the America’s Cup Louis Vuitton press centre in Auckland. The hundreds of international journalists that cover this prestigious sailing race are able to daily print the latest editions from their local newspaper in the press centre.

With the launch of a digital newspaper kiosk in New Zealand, PEPC (Publishers Electronic Printing Concept) introduced her newspaper-on-demand service in 16 countries across the globe. PEPC Worldwide, residing in The Hague, with offices in Miami, San Diego and Hong Kong, is a worldwide distributor of digital content from national and international newspaper publishers. PEPC, founded in 1999, developed an interactive digital newspaper kiosk that can print on demand the latest editions of newspapers. The state of the art software developed by PEPC and PEPC’s Private Multicast Satellite Network form the basis for a digital distribution network that covers 99.1% of the world population. This network forms a distribution highway to digital newspaper kiosks all over the world.

See also:
New Zealand – Broadband Market – Providers and Solutions;
Global – Services – Content Networks;
Electronic Communities;
News Services.

On Saturday 14 December some fifty locals gathered on the steps of the Wollombi Tavern, famous for its Dr Jurd’s Jungle juice.

The reason for this gathering was to celebrate the fact that Wollombi is now connected to the mobile network.

I run an executive conference centre in this historic town in the Hunter Valley and, eighteen months ago, I began to investigate the possibility of getting mobile coverage in this part of the world. A previous attempt had failed – none of the three carriers were interested in this part of the world. However, I figured that the arrival of Telstra Country Wide (TCW) might present a new opportunity.

From the very first day TCW showed lots of enthusiasm for the project. In order to attract funding, however, we needed to get the whole community, as well as Cessnock City Council, behind the project. The cooperation was amazing – everybody quickly became involved, both financially and actively. The local chamber of commerce approached Council and they voted unanimously to provide financial support; several business people in Wollombi also put up money to support the initiative. The Wollombi Progress Association offered to write the submission, and a very professional document saw us getting the financial support from the Federal Government to complete the project.

Telstra’s initial plan was to put in a CDMA service but we were able to convince them that Wollombi was attracting lots of visitors from Sydney, all of them using GSM, and our main aim was to provide a mobile facility for these visitors who are the main source of income for this town.

In the meantime our cooperative relationship with TCW has gone further. Earlier this year I launched another local initiative – ‘The Broadbanding of Wollombi and Bucketty’. I sent an e-mail to local residents and wrote several articles in the local press explaining what broadband could do for us. Some 35 people responded positively and, armed with this list, I approached various carriers asking them if they were interested in providing a broadband service (satellite, wireless or fixed).

Once again, it was TCW that responded with enthusiasm – none of the others showed the slightest interest and, despite follow-up phone calls, some didn’t even bother to reply.

The broadbanding of Wollombi is now in its first phase. At present ISDN and satellite services are being used; however, because of the level of enthusiasm, TCW is determined to push for the next level of broadband, based on ADSL. Our hopes lie in Alcatel’s new ADSL card for RIMs.

But we do need a few more customers to make it commercially viable. While we have got the broadbanding of Wollombi off the ground, the broadbanding of Bucketty (which has a smaller and more widely dispersed population) is still a headache.

So I am looking for more ideas and suggestions …

See also:
Australia – Mobile – Industry Trends and Analysis
Australia – Mobile Communications – Residential Market
Australia – Broadbanding Local Communities
Australia – Regional Infrastructure Overview

While the Ka-band multimedia satellites offer the prospect of ubiquitous high-speed Internet access to consumers, the main market for such satellites in the Internet environment will be for professional users and business. The cost of two-way earth stations will be prohibitive when installation costs are taken into consideration. Despite some claims, it is expected that the minimum installed price in 2002/2003 will be in excess of $1,500.

A possible market for Ka-band Internet consumer access will be for professionals working partly from home or telecommuters, where employers or medium-to-large companies foot the bill both for the two-way terminals and transmission charges (likely to be well above competing alternatives). However, corporate IT managers dislike satellite communications as they perceive them as expensive and inherently insecure. This needs heavy selling by the satellite world.

See also:
Global – Broadband – Internet – Satellite Based Broadband (Ka-Band).

A month ago I questioned the wisdom of AAPT’s ‘strategy’ – to lose half of their customers (from 900,000 to 460,000 within 18 months).

The company has now launched an aggressive $20 million advertising campaign to win new customers, providing significant line rental discounts to new customers. These discounts are scaled, based on the monthly spend of customers and are reduced to zero for customers who spend $200-plus a month.

I can’t help wondering why any company would let 450,000 customers go and then launch an expensive campaign to win them back. This just doesn’t make business sense to me.

But, then, maybe it has more to do with politics than with business.

AAPT (read Telecom New Zealand) is facing very serious competition from TelstraClear in New Zealand. And I perceive this to be the real issue – Telstra’s aggressive move into New Zealand only began in earnest a few years ago after Telecom New Zealand bought AAPT and, as I said at the time, this signalled the start of the game of tit-for-tat that continues up to the present day.

Apparently TCNZ has now realised that its strategy in Australia is proving to be a disaster. It is rapidly losing its business here, AAPT is dramatically reduced in size and also, of course, its value has dimished. In the process TCNZ has lost any leverage it had in relation to its negotiation position with Telstra, as AAPT is becoming a less significant player in the market.

Apart from the fact that AAPT has lost a large chunk of its traditional business it has also failed to position itself as a significant player in the broadband market. This, again, is a reflection of the broadband situation in New Zealand, which is even worse than that of Australia (less than 2% penetration).

Also its strategy in mobile is a bit of a mess. In Australia AAPT is a reseller of the Vodafone service, the very company that is its archrival in New Zealand. (Vodafone caught Telecom napping in the mobile market in New Zealand and Telecom lost close to 50% market share of the NZ mobile market to Vodafone.)

The company has now also aligned itself with Hutchison in Australia, in the hope of becoming an important 3G player. However, those who still believe in a thriving residential 3G market are, in my opinion, misguided and, while there are niche opportunities in 3G, the investments made by both Hutchison and Telecom will not deliver a return appropriate to a niche business.

So I believe that the latest strategy launched by AAPT, based on line rental discounts, should be viewed as a political tactic aimed at repositioning itself against Telstra. The company is aware that, to save its skin in New Zealand, Telecom will have to attack Telstra and the obvious place to do this is in Telstra’s home market – Australia.

The endgame, therefore, is aimed more at getting Telstra out of New Zealand, or at least making life as difficult as possible for them, than at saving AAPT. There is a real risk that the value of the overall market will contract significantly if a more general voice price war breaks out and this, of course, would damage Telstra far more than any other player in the market. However, it is unlikely that anybody else will join AAPT in this price war and it still has to be seen if Telecom/AAPT has the stamina to stay put.

In the short term, the discounting action might have the effect of revitalising AAPT. However, the long-term value of price wars is questionable – and with little or no value-add business on offer, margins will be extremely slim, profitability will be low, and I can’t see a new business on the AAPT horizon that will transport the company into better times.

See also:
AAPT – Company Analyses
New Zealand – Analysis – Industry restructuring across the Tasman
New Zealand – Analysis – Telecom vs TelstraClear
New Zealand – Analysis – Market Overview 2002-2003

Before the telco crisis I described the data centre market as one of the rising stars of our industry but, of course, in the meantime we have seen a major shake-out in this market segment.

As this the data centre market was one of the youngest in our industry, there were not many mature organisations involved at the time of the crash. The first companies arrived in the mid-1990s, and many of them, stimulated by the telco boom of the late 1990s, invested large sums of money. With the telco collapse of 2000 the projected growth did not happen and many of the new players soon started to run out of money. This is a real pity, as many of these companies didn’t ever have a chance to properly test the concept.

This collapse has nothing to do with the principle of data centres. This concept is as strong, if not stronger, now as it was in the 1990s. The only problem is that the projected growth will be delayed by 3-5 years or so. Those who entered the market late and those who profited from the consolidation , as well as telcos are going to be successful operators in this market.

It increasingly looks like that these telco operators are going to be the short-term major winners. For them it is an extension of facilities and services they already have and offer. Dedicated players don’t have that level of synergy and have great difficulties filling up space. It will be the telcos who will lead the data centre market out of the crisis; it won’t be until the end of the decade that there will be more room in this market for dedicated operators.

Broadband has now well and truly left the starting blocks and by late 2003 it will have reached critical mass (10% penetration), at which stage corporates, content providers and others will begin to look at how to use broadband to their strategic advantage to deliver products and services to their customers. This is when the data centres will come into their own. They will become the engine rooms for these developments.

Hosting companies such as have a value added managed applications service providers approach (MASP) and are able to sell their services (websites, e-commerce, content hosting) within this emerging broadband environment. They can utilise the data centers at rock bottom prices, leaving the data centers on commodity based operating levels. This has always been one of my major criticism of data centres; they deliberately choose to operate on ‘real estate’ levels only, the market however request a one-stop-shopping service on a value add level. Telcos and hosting companies are much better positioned to establish themselves in these markets.

Eventually data centres will start to mushroom around the country. Close to population centres there will be small and large centres, broad, one-size-fits-all centres and highly specialised ones.

So, to those involved – don’t despair, there is light at the end of the tunnel. And if data centres fit into your strategy, now is the time to start setting one up, so as to be ready by 2005 – 2008.

See also:
Global – Public Data – FM, Outsourcing, Data centres
Global – Industry – Managed Service Application Provision (MASP-ASP)
Global – Industry – Customer Management, CRM, OSS, Billing