Why bothering building Next Generation Telecommunications?
There is a flurry of activity going on among telcos around the world to upgrade - no, to overhaul - their network from the good old POTS (Plain Old Telephone Service) to a super-duper superhighway over which the digital economy will be conducted.
There are not many telcos that are not involved in Next Generation Networks (NGN) and Fibre-to-the-Home (FttH) these areas being the two broad key sections of the transformation.
This is all well and good, but several of the telcos who are building these networks are at the same time failing to develop the new business models that are required to enable the digital economy to unfold, and as such they are also failing to create new income streams for their new super-duper infrastructure.
If we had built the first freeways for the T-Model Ford alone, or the autobahns only for the VW, we certainly would not have seen the mobility revolution that started after WWII.
But unfortunately some of the architects of the digital economy infrastructure do operate while wearing huge blinkers. They believe that their roads should be totally for their own use and they don’t want anybody else on them, or (to stay with the motoring analogy) they believe they should be allowed to charge whatever toll they like to anybody they might perhaps allow to use the road as well.
Surely such an approach will not lead to the social and economic results that the ICT boom could potentially deliver. These should be very similar to the benefits that were derived for the industrial revolution, the steam revolution and the transport revolution.
The telcos and their spin doctors, on the other hand, are widely advocating the benefits of their communication revolution, but they are unwilling to utilise the infrastructure they are building for it so that it can be used effectively and efficiently by those who are going to participate in the digital economy.
And if this looks and smells like market failure, it most probably is.
With a fair bit of prodding and probing several countries have been able to move their telcos along a more forward-thinking path and, remarkably, once they get they get the feel for the new environment they quickly accept it, realising that by actually getting more cars onto the road new business opportunities open up for them.
This turns out to be a rather good alternative to their old monopolies and it also offers them a far more sustainable future.
In the developed economies the USA, Australia and some notable exceptions in Europe are the laggards in this new and exciting development. The major difference between the two camps is the lack of government leadership. In all of the successful European and Asian cases it has been government leadership that has set the course towards the digital economy. Each of these countries is doing it in its own specific way but each is driven by supportive government policies and regulations.
Paul Budde
See also:
- Global - Infrastructure - Next Generation Telecoms
- Global - Infrastructure - Strategies for the Digital Economy
- Global - Broadband - Infrastructure Trends & Developments
- Global - Industry - Regulatory - Privatisation, Structural Separation
- Australia - Broadband - NGN - Overview & Statistics
- Australia - FttH Models, Overview, Costs, Forecasts
- Australia - Broadband - Infrastructure - Analyses
