Business opportunities for 2009.
Telecoms is one of the few sectors that hasn’t experienced a dramatic economic downturn.
There is pain, but it is not as bad as the damage in some of the other sectors.
At the same time governments are launching massive investment packages utilising infrastructure to stimulate the economy. The EU, Obama, Australia, New Zealand and others are all talking about the digital economy (infrastructure) as a spearhead in the new direction, and the telco industry should be able to use these opportunities, not just for the national good but also for the benefit of the companies involved.
However, it is certainly not business as usual.
These government investments will be based on government participation through PPP and regulations, and investments will be directed at open networks to stimulate competition and innovation. Government investment will certainly also be made to assist developments in e-health, tele-education and smart grid (environmental applications). They will not just focus on HDTV and entertainment.
Companies that understand these changes and are prepared to work with governments in a generally more collaborative and cooperative way will have the best chances for success. I see not quick wins, but a lasting change that will create enormous new long-term opportunities.
The digital economy is many times larger than the telecoms industry. In other words, the pie is much bigger, but we need to learn to share and that will be difficult for some of the incumbent telcos and cablecos. Their dominance and often uncooperative approach is a major stumbling block to these new growth opportunities and that’s why more and more governments are coming out with stronger regulations (structural separation of the infrastructure, net neutrality) to enable this new market to develop.
Only so much can be accomplished with a telephone call, but the digital economy is full of opportunities around new applications, service and product specialisation, customer service, niche markets, etc. This will be another key challenge as most operators in the telco industry are more or less functioning according to the one-size-fits-all commodity principle, and I fear that most of them (ISPs and telcos) could be bypassed by companies in media, marketing and those already operating in specific markets, who will simply embed the telecoms commodities in their products and services.
Going forward there is little need for specific telecoms products. They will simply be part of the bigger environment (think VoIP, chatting, social networks, UGC, email, Skype, video-chats, etc). So far the telcos and ISPs haven’t shown any great leadership in innovation. These advances have been coming from Google, Facebook, MySpace, Yahoo, Amazon, YouTube and the thousands of smaller web 2.0 companies.
I think 2009/2010 will be the last years in which these rather commodity-based telco companies will have the chance to become more customer- and marketing-focussed. Otherwise they will end up as road kill along the superhighway of the digital economy and will be relegated to operate in the utility space of infrastructure and access. And it is only economically viable to operate in this market if you are a really large operator. Massive consolidation will take place in the infrastructure/access market.
Structural separation will also open up new opportunities for mergers and acquisitions – when the old structure is eradicated industries will converge in new ways to develop a new ‘telco’ environment. There will be distinct opportunities in infrastructure (FttH) and completely different developments in the services, applications and communications areas. This last element will be led by new two-way interactive video communications applications in all segments of the market:
- Residential video applications with friend and families, communities, virtual interest and hobby networks
- Business applications in personalised consultation and personal services in finance, banking, insurance, training, fitness and the sphere of personal development and spirituality
- Healthcare – patient and older-age patient monitoring, remote diagnostics, etc
- Education – continuous online education, and
- Environmental services such as energy management, renewable energy, e-cars etc – a smart grid is needed to operate all of these.
So the opportunities are endless for the companies that are prepared to change; those who fail to do so will become casualties of the financial crisis.
Paul Budde
Planning the year ahead – Trans sectoral thinking – 5 February 2009
I have been investigating and discussing this concept for the last two years. You may have read my blog:
http://www.buddeblog.com.au/trans-sectoral-thinking-required-for-governments/
Describing a cooperative government-industry strategy according to which different e-applications share one (FttH) infrastructure.
The trans-sectoral concept also applies across infrastructures, such as telecoms, energy, roads, pipes, etc.
The term ‘trans-sectoral’ has been used a great deal recently, during my discussions over the last four months with a team of international experts I am leading. This group is providing unofficial input into the Obama Telco Team – an exciting and rewarding exercise for me.
The expression ‘trans-sectoral’ is now also slowly creeping into documents related to the US economic stimulus package.
In Australia two years ago we were able to convince Minister Conroy of the value of this concept and since then he has been firmly committed to it. You might recall that after our meeting with him in April last year we even changed the name of our industry workgroup and developed the concept further within the Digital Economy Industry Workgroup, supported by papers and submissions. At our CEO Forum meeting with the Minister in December we presented our ideas and proposals for the next phase and these also received his support.
If we can achieve a truly trans-sectoral environment in Australia it will be a first in the world, and the USA Obama Team and several countries in Europe are watching developments Down Under.
To reach this point we will need a much broader involvement from other senior Cabinet members, such as Ministers Gillard, Tanner, Roxon and Ferguson, and we are delighted to report that we have had three meetings confirmed for February.
Open networks are crucial to trans-sectoral developments. Only on such networks can we achieve that multiplier factor – using the same infrastructure for healthcare, education, energy applications, digital media, e-commerce, etc.
While there are several ways to achieve open networks it would seem that structural change to the industry is the direction we must take in Australia. Last year I facilitated a visit to Australia by experts from the Netherlands, to show that it can be done in a voluntary way – KPN is neither functionally nor structurally separated, yet this country, along with its incumbent, is one of the global leaders in open networks.
Unfortunately no support was forthcoming from the incumbent in Australia at that time.
I am organising a Roundtable (maximum ten people) on 5 February to bring you up-to-date on the latest developments in Australia. I also hope to obtain your input for the meetings that we are organising with the Federal Ministers.
And I will update you on the exciting developments in the USA. We will continue to provide international input into the process there and, of course, I am not shying away from using Australia and New Zealand as case studies wherever possible.
Venue: The BuddeComm office
134/14 Blues Point Road, McMahons Point, North Sydney
Time: 10am-2pm
Start with morning coffee – finish with light lunch (included in cost)
Cost: $195 (excluding GST)
Booking:
Email: pbc@budde.com.au
Telephone: 02 4998 8144
Online: Registration http://www.budde.com.au/Conferences/Roundtables_with_Paul_Budde/Roundtables.aspx
Cancellations/Refunds Policy Roundtables
We are happy to give a refund, provided we are notified no less than 24 hours before the event.
Please notify of cancellations in writing to: pbc@budde.com.au
February 18th, 2009 at 12:39 am
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