Season's Greetings

“You may compete with everybody but not with your customers !” Richard Stastny.

I wish you, as well as your family members, a jolly good time during this upcoming festive season.

The end of the year is usually a good time to pause and predict what could happen during the new year. I wanted to start a tradition with the Australian Telecommunications 2007 Predictions Survey, which yielded some interesting prophecies. While I agree with Warren Buffet when he stated that ‘‘I have long felt that the only value of stock forecasters is to make fortune tellers look good’’, there is little harm done with polishing our crystal ball and hypothesising on the upcoming year in Australian Telecom landscape.

In the Access sphere, respondents have predicted that “State Governments spend $billions on building metro area fibre access/backhaul networks to serve their own requirements, and then they open them up to Telstra (Australian incumbent) Competitors”, “First commercial deployment of a WiMAX offer” and that “Hutchinson may divest from its Three network in Australia after the upgrade of its network to HSDPA.” These predictions seem to signal a new age for Australian broadband. 2006 was the year broadband democratised with over 2.3 million Australian homes now with broadband, and with DSL used in 83% of broadband enabled households. 2007 will be the year when broadband becomes an enabler of service and content rich offers. This could result in at least one major PMI engagement in Australia and new billing platforms integration programmes.

In the Service arena, respondents were quick to forecast “iiNet/PowerTel drive VAS packages to SMBs (e.g. mini-managed services like remote backup)”, “Telstra and Vodafone get serious about Small and Medium Businesses (SMB)”, “VoIP based hardware (e.g. Skype/DECT phones, Apple iPhone) is bundled with high-end DSL packages.” 2007 may be the year ISPs use Customer Premise Equipment and Value Added Services (VAS) to their advantage to reduce churn and acquire existing SMB and consumer customers from other providers. Offers like Managed Services, Security, PC support, VoIP and IPTV may become the tip of the spear for ADSL providers willing to integrate them. This would mean complex IMS type of integration work for Telcos in 2007 and beyond.

Content is king, we are told so here are some regal predictions from Telco strategists. “Everyone will offer mainstream content (e.g. music downloads)”, “NewsCorp [or Mac Media Fund] buys Channel Ten”, “Optus and Telstra form more alliances with content owners and advertisers to maintain profitability and defend broadband market share.” Telcos seem to have understood in 2006 that they need to form alliances with content providers to leverage their scale in front of smaller, low costs, operators aggressively rolling out DSLAMs regionally. This shift in thinking is probably not shared among all the employees at the Telcos and this opens opportunities for consultants to help the C suite operationalise their strategies.

We will revisit these predictions in one year to bring some accountability in the process and celebrate the most accurate “fortune teller” among us. With my track record, predicting last year “VoIP over 3G is poised to become a big thing in 2006…” I am sure to get disqualified.

Telecom News

• State Governments get involved in Broadband: A number of State Governments are "taking action where the Howard Government is not."
  
• Sceptical telco applies for $600m broadband fund: Telcos vie for a piece of the Government's Broadband Connect fund.
  
• Google/Orange phone is 'nothing new' - analyst: Rumours abound that Orange and Google are in talks to launch co-branded device.


• Sky and Google Alliance: Wide-ranging alliance covering advertising revenue share, a Sky-branded version of Gmail and UGC video.
  
• Orange Content: Orange UK has jumped aboard the user-generated content train.


• Telstra steals 3G show with Next G: Telstra’s blitzkrieg national rollout of a high-speed 3G network has undercut the chances of any competing network.
  
• Microsoft tests new VoIP server: Microsoft has started testing new server software that allows corporate customers to make phone calls through its Office suite of business software.
  
• Telstra's structural separation debate: The debate around a separation between the infrastructure and services arms is back on the table.

Telecom Trends

• Mobile VoIP: Example of a Mobile VoIP value proposition where the value proposition is built around group context and presence.
  
• Free VoIP Centrex capability: Sign-up for a free account to experience the power of Asterisk, the leading VoIP Open Source PBX.
  
• Least Cost Routing made easy !: This free service aggregates your Voice Service Providers into one, allowing you to conduct price arbitrage among VSP like 10 cents quality calls to Australia from here, or free international calls from here, here and here.
  
• Telco 2.0 ‘Disruptors’: “PhoneGnome is to fixed lines what WiFi handsets are to mobile.”
  
• True Pioneers: Congratulations to the 47 technology pioneers for 2007, (Truephone, SlingMedia, Bridgeport Networks among others.)
  
• FMC is go, says survey: Over 65% of Operators Will Have Implemented FMC Into Their Service Platform Within the Next Three Years.
  
• Telcos fear Web 2.0 : 75% of telco insiders lack confidence in Telcos' ability to create long-term sustainable growth in new environment.

Telecom News

• Commander stalked by SingTel: Commander Communications emerged as a potential takeover target following speculation Singapore Telecommunications could launch a bid valued at more than $540 million.


• ReelTime to offer permanent movie downloads: In an Australian first, ReelTime will soon offer download-to-own (DTO) movies, with new releases available on the same day as retails stores.


• ISPs scramble to produce 8Mbit plans: After Telstra's announcement of new ADSL1 port pricing, ISPs are hurriedly doing the sums on what their new plans will look like.


• Telstra releases ADSL2+: BigPond has finally released ADSL2+ plans, and has also updated its ADSL1 line up, bringing it somewhat up to date with competitors.


• Optus caught short on international bandwidth: OptusNet broadband customers are once again crying foul as they enter their second week of slow speeds and high latency when attempting to browse international sites.


• FTTH in Brisbane? The Queensland Government is attempting to bypass Telstra and build its own fibre to the home network in metro Brisbane.


• Optus announces wholesale ADSL2+: Optus has formally announced its wholesale ADSL2+ service, which will allow other ISPs to offer 24Mbit speeds and phone services via ULL later this year.


• Telstra gets bad news on ULL: Telstra today confirmed that it had been forced to offer a ULL price of $17.70/month to competitor iiNet, after the ACCC provided an Interim Determination on an access dispute.
  

Telecom Trends

• Clipcomm BS-T100V converts VoIP to your mobile via Bluetooth.
  
• Copyright Office rules that consumers can legally unlock cellphones
• Orange, SFR team up to ease parking in Paris
  
• New partnership gives Sprint Nextel users Windows Live Search
  
• Google chief says: "Your mobile phone should be free"
  
• Sling - Personal Video Player- announces Symbian SlingPlayer, partnership with 3
  
• Mobile phones make payments at Coca-Cola machines
  
• Optus trial brings Traffic Intelligence to road users

Let me ask you an enigmatic question!

“While we are doing a decent job at keeping our eyes on the ball, I am increasingly concerned that the end-users are already off playing something other than ball….” Anonymous.

Allow me, if I may, to tell you a short story.

Did you know that Einstein was a famous prankster? He detested touring universities to talk to esteemed faculty members, whose sole purpose was to shine during conferences by asking, what they thought to be, sophisticated questions. Not only was Einstein tired of constantly hearing the same questions over and over again, but his driver, who looked somewhat like him on a bad hair day, started to predict the answers Einstein would give to common questions.
One day, while feeling under the weather, Einstein asked that he take the wheel while his driver present the material he had heard times and times before. After the presentation, a young faculty member asked a rather difficult and uncommon question to the Einstein look alike. Upon hearing the rather enigmatic question, the driver, posing as Einstein, replied “This question is so trivial that I will let my driver answer you!” Let me ask you an enigmatic question! Are you confident in the ability of Telco operators to create a sustainable future for themselves in an increasingly IP-based world? Only 18% of more then 250 industry insiders think so according to this survey.

Why is it that Telco financial analysts, consultants and practitioners feel so gloomy about the ability of the Telco sector to create wealth? Let James Enck give you 10 reasons. The truth is that Telco is a sector that we love to hate. The oracles of the efficient markets have descended upon us and rendered their judgement: Access is out, Services and Content are in !

I like to think that I play a small part in turning the tide by allowing my clients do the “right things right”. The question becomes are they playing the right game? My driver has not come up with the answer yet.