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Future perfect: telco in 2015

01 May 2010

As we sit in what are the most tumultuous times that telecommunications has ever seen, I’ve been wondering what the eventual calm after the storm might look like. To any observer these are fascinating times that seem to prove the old adage that the Chinese use the same character to represent danger and opportunity.It seems that every aspect of ICT is undergoing revolutionary changes at every level from global to national to local to personal, market structures are being redrawn, and new devices and technologies are creating new industries overnight and fuelling an insatiable demand for high-performance, cheap bandwidth.What seemed like rock-solid structures just five years ago are now at risk, and to some the ICT industry is locked into a crazy race to zero! The demands for new infrastructure, new services and new devices, along with ever-shortening technology upgrades, are placing increased demands on traditional carriers to invest. At the same time, investors are looking for greater returns, users expect prices to continually fall and competition increases on all fronts, coming from both global platforms and smart street corner start-ups.So where is this all heading? Hopefully, like many other industries, a new equilibrium will emerge and it’s not too far away.On the infrastructure front I think we’re actually going to be saved by the huge costs involved, and this will lead to sensible shared approaches to investment in both fixed and mobile networks. This is already occurring on some long haul fibre builds and may turn out to be a very positive outcome from the Government’s Ultra Fast Broadband initiative.Here’s a scenario to think about: Telecom structurally separates and floats Chorus to raise some much-needed capital for the services it needs to compete as a dominant retailer. Ironically the biggest investors in an infrastructure asset like Chorus could well prove to be long-term asset owners like the electricity lines trusts, many of whom make up the Regional Fibre Group currently competing with Telecom for UFB funds.The new infrastructure companies could take a more rational approach to fibre to the premises deployment and make use of both Telecom and lines company assets. This will avoid unnecessary overbuild and get fibre deployed faster. It also makes it easier to regulate the natural monopoly aspects of telecommunications infrastructure without interfering with competitive services.The biggest advantage is that it will avoid what was looking like an inevitable marketing war, as Telecom will no longer want to fight tooth and nail to defend its copper network as long as possible, and new entrants will be able to invest in services on the basis of genuine equivalent open access at either layer one or two.And if the signals that were highlighted by the Telecommunications Industry Group about the investment needed to deploy 4G mobile infrastructure requiring a collaborative approach are correct, we may see the same approach in our mobile networks, shared infrastructure and intense competition for services.Having sorted out the plumbing, let’s move onto what we’re going to be doing with all this advanced connectivity.I’m pretty certain we’ll still be talking to each other, but I think we’ll see some big changes. The emerging global voice platforms will make an impact as Skype and Google both create local presence in markets all over the world. We’ll be texting, twittering, emailing and videoconferencing like we do now, but we’ll be doing it across all our devices.YouTube will grow to the point where it is taken as a serious alternative to today’s broadcast TV networks, and we’ll be able to catch up on any show that we’ve ever missed from online archives. The first-generation iPad will seem pretty lame in its capabilities, but it will be fondly remembered as the first truly revolutionary personal device heralding the real internet era (everything before it was just a practice run).Bandwidth will become a generic fuel and we will consume different brands with ease, seamless connectivity will be the norm, and the world will truly be our kids’ oyster.

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