ATUG – NOW99 AND BEYOND – JUNE 1999
By the time you read this the annual conference and exhibition will be a thing of the past, as so many new things have happened over the weeks following this event. Still, you might be interested in a summary of the conference, as I saw it:
The conference
As always the ATUG event is the best networking event of the year – it would be hard to beat in that respect. Particularly for die-hards like me, the networking aspect is the best part of the show. As in previous years, I was rather disappointed by the standard of presentations. To me the majority appeared to be just pushing their own barrow, to promote their company. And those who did address more general topics, regardless of the sometimes excellent quality of their presentation, just seemed to be repeating the usual feel-good stories. Although the packaging might differ depending on what is the ‘flavour of the year’ (ATM, ISDN, Internet, Multimedia and so on), the content remained the same.
My feeling is that more independent international speakers should be invited (and paid for) to present more interesting papers. But, since to a large extent the audience has a technical orientation I am sure the conference, as well as the exhibition, fulfils an important need. Coming from a marketing background, I know all about targeting your audience and how important it is to keep a clear focus on them. However, as a non-technical person, I did find a lot of the sessions self-indulgent, technically hyped-up and, in fact, pretty boring.
I was delighted to see a packed house – standing room only – when I presented my paper at the conference, Trends and Developments in the Telecommunications Market. Subsequently there was a mini-stampede to our own little corner at the ATUG café where a copy of my paper was available. In this strategic position we were able to meet up with many of you – this was especially gratifying to our office staff, who were interested to meet the people behind the voices they talk to daily on the telephone.
If you are interested in a copy of my presentation let me know and we will e-mail one to you.
The Exhibition
This year’s exhibition was significantly smaller than those in previous years. With fewer service providers at the exhibition the technical side of the industry was highlighted even more. Also, many end-user companies such as Ericsson, Nokia and Motorola did not have a presence. Their products have become more ‘mainstream’ and few mainstream people visit ATUG events. The same applies to Internet products and services – more specialised exhibitions are enticing exhibitors, delegates and visitors to their own events.
However, the more important underlying factor here is the bitter competition between the ATUG event and their American competitors, ZD Events, who organise Interop – this year in association with a Comdex event. It is a great pity that the two can’t amalgamate. While I empathise with ATUG, the fact remains that the exhibitors will judge both events on their commercial merits and will have to make commercial decisions. My suggestion is that the telecommunications industry in Australia should convene, make some fundamental decisions about the future of these events and come to an agreement on how to make it work for all involved. And who would be in a better position to make this happen than ATUG?!
The fun element of the event was greatly facilitated by companies such as Samsung and Marconi. ATUG themselves set the scene – both at their own stand as well as during the conference luncheons, where they featured excellent comedians. Full marks to all of them.
The quality of the coffee is definitely improving – now it is not only AAPT that provides great espresso and cappuccino coffees – these are also offered by NCD, Plestel and others. For a coffee lover like myself it is very encouraging to see people flocking to these stands. – our industry obviously consists of people of discernment in matters other than technology. However, for the few stands left with ordinary coffee – the writing is on the wall.
Regulatory fine-tuning won’t work
Plenty of action at and around the event.
Things got off to a good start with the Minister, Richard Alston. He is by now a telecommunications veteran, with eight years of experience up his sleeve – a lot more than the average employee in the industry. He gave a very relaxed and pleasant presentation.
As you might have read in the newspapers, I am pretty happy with the regulatory changes the Minister proposed. In principle, I am always very optimistic, enthusiastic and positive about new initiatives that seem to be headed in the right direction. But (and you probably felt a ‘but’ coming on), I do have reservations.
I doubled-checked the facts by asking the Minister a series of questions, which could be reduced to the following: Are the new rules framed so that – after arbitration, consultation, due process and God knows what more – when the regulator finally comes to a conclusion, the decisions relating to this conclusion can be implemented?
The answer essentially was – no. Sure, the rules will have been sharpened and fine-tuned, but Telstra’s army of lawyers will no doubt find new loopholes and will use them to delay and stall. The recently restructured legal arm of the firm is larger than most private law firms in Australia and I believe that, without firm decisions from the government, Telstra will just continue to look for loopholes.
Some Telstra people I spoke to commented along the following lines:
What do you think we should do? The ACCC delivers a report, puts it on the table but then fails to tell us what to do. Should we then not look after our shareholders and only comply if specifically required to, under duress by legislation. Unless this happens we will fight to the bitter end to protect our business.
While I don’t agree with this viewpoint, I can follow their reasoning. It will be up to the government to demonstrate how serious they are. So far there is nowhere in the world where self-regulation in telecommunications is working in a situation where you have one dominant player, so why should Australia be any different?
Regulators in Europe are far stricter, and look at the changes that have occurred there over the last 18 months. It is just mind-boggling. The Australian lead in deregulation has already totally disappeared and every day we are getting further behind.
These views were confirmed when the report jointly initiated by Deloitte Touche Tohmatsu and Decisive Publishing reported that liberalisation is working, but that battle fatigue is causing havoc amongst those who are sick and tired of having to fight all the political battles instigated by Telstra. A cat and mouse game, in which Telstra is not a cat, but an 800-pound gorilla.
Another telling example of delay in the regulatory arena was the confirmation of the declaration of the analogue subscription broadcast carriage service by the ACCC, earlier this month.
I was personally present when the Labour Minister Michael Lee confirmed the ‘open cable’ position – I believe this was back in 1996. Next we had the new Act of 1997, formalising this position again. Now, two years later, yet another confirmation that the service is declared.
Isn’t this a clear indication of extremely successful delaying tactics on the part of the incumbent operators. They have already gained at least three more valuable years without competition. How many more confirmations do we need before we finally see competition in pay TV content in Australia?
Telstra confirms hard line
The next day Dr Ziggy Switkovski, Telstra’s new CEO, mentioned – as basically every other Telstra manager and/or CEO has done at any other ATUG event I can remember – that they support the competitive environment, that they are an open organisation and that they are always willing to frankly discuss points that need improvement. My question then is: if this is true why does the Minister have to come up with these legislative changes, and why is practically the whole of Australia in an uproar about Telstra’s conduct, level of service, prices, etc?
One of the first things Ziggy mentioned at a short impromptu press conference, after his presentation on the day after the Minister’s speech, was that he believed his company’s churning process is good and that it will fight the case to the bitter end. (For more details see Web Report Australia – The Incumbent Carrier, Dominance, Privatisation) On my question to him about the overall competitive issue he was a little more conciliatory and indicated he was willing to explore new practices.
In my opinion his ATUG speech was a miss for open goal, regurgitating exactly the same old feel-good Telstra story and failing to discuss the problems that everybody else is talking about. He didn’t even refer to the changes foreshadowed by the Minister. He side-stepped all that by making the statement that Telstra had seen a sea change in approach and attitude. Does he really believe this while all around him, from the Minister down, is saying the opposite?
As we have experienced with virtually anybody else on a senior level within Telstra he quickly retreats to the Telstra strategy of avoiding these issues, talking up the hi-tech stuff, painting a wizard-like techno future with lots of goodies and talking about high-touch customer service. This last item, especially, didn’t go down well with the delegates. According to high government level Telstra-users, this was a big joke (they called it an ‘out-of-touch’ service) and you only have to read the various letters to the editors in newspapers and magazines to see a totally different picture.
AAPT -and Optus
Before the event Optus had made a move on AAPT. During the event TCNZ announced its intentions.
Much has happened since.
It was refreshing to see that the ACCC could act swiftly. I was involved in their investigation process and was impressed by the level of professionalism and thoroughness. It is disappointing that it appears to be impossible to have an equally swift result in relation to the dozens of investigations regarding Telstra and regulatory issues in general.
Full marks also to Optus. They were dignified in defeat – a refreshing change in our litigious industry. As I have mentioned before, the company clearly has its eye on the ball and didn’t fall into the trap of distraction by challenging the judgement of the ACCC. It was very much a confirmation to me that this company is well and truly on the right track. they are focussed on exciting new business opportunities, rather than fighting the ongoing turf wars.
Hopefully we will also see a breakthrough from them later on this year, when they introduce their high-speed Internet product. I am not a big believer in a fully-packaged @Home service. I prefer to see a very competitively priced vanilla access service for around $25 to $35 per month. If they would like to value-add on top of that, with @Home and other services, that’s fine, but I feel that should be left as a customer choice rather than as a force-fed service.
AAPT and TCNZ
As mentioned, during the event the Telecom NZ/AAPT move was announced. The ACCC decision and the resulting exit by Optus forced this company into action and since then they have bought a 20% stake in the company.
I was interviewed by a radio station in New Zealand on this announcement, as well as on Telecom’s New Zealand annual results. Of course, I said that I was very happy with the announcement as it would give Australia a chance to maintain a strong competitive arena, rather than reducing the top level of competition from 3 to 2 players.
Telecom New Zealand is one of the international success stories on how an incumbent can change (in a positive way). At home it is using all the standard tricks to avoid competition, exhibiting a cultural attitude directly opposed to that of AAPT. However, as we have seen around the world, incumbent carriers can sometimes behave ‘pretty normally’ and very successfully once they have emerged from their incumbent cocoon. I think Telecom NZ dumped its Pacific Star venture too quickly because of inexperience with competition; this time round they are more weathered and much better prepared to take on the challenge, especially when dealing with a company like AAPT.
Paul Budde
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