Top Scoops

Book Reviews | Gordon Campbell | Scoop News | Wellington Scoop | Community Scoop | Search

 

Slowly But Surely Structural Changes Are Underway

Slowly But Surely Structural Changes Are Underway


Telecommunications Comment By Paul Budde

For many years I have argued that the telecoms industry should restructure itself along two segments:

  • infrastructure

  • (retail) services
  • Companies should ensure that the infrastructure segment is technology-agnostic. In other words, their infrastructure plans should enable them to apply technologies where they fit best, based on topography, geography, demographics, population density and so on. In other words, infrastructure operators who base their business on a single technology, or just a few, are doomed to fail.

    I am convinced that sooner or later telcos will have to restructure themselves in accordance with one or other of the above segments. There will, of course, always be room for a few vertically-integrated niche players in selected markets (eg CBD networks).

    In infrastructure there are clearly two forces at work at the moment:

  • the vertically-integrated incumbent telcos are watching their position becoming eroded and are being pushed closer and closer toward structural separation in order to deliver shareholders value
  • mobile-only players will need to move into fixed networks as new technologies make possible seamless communication over both networks
  • With this in mind, it was interesting to follow Telecom New Zealand’s recent moves in merging its mobile and fixed divisions so as to be able to more effectively introduce Fixed Mobile Convergence (FMC). Telecom is being forced to move fast as it continues to lose mobile market share to its rival, Vodafone. By moving into FMC it creates a competitive advantage for itself, which over time will be very difficult for a mobile-only company like Vodafone to beat.

    Several years ago the company was also among the first incumbents in the world to start building its NGN network – such an IP-based network is an absolute prerequisite for convergence. My only comment here has been that the company’s timeframe (finished by 2012) is very lengthy indeed. This is a reflection of a lack of facilities-based competition in the country.

    Still in New Zealand, the company also announced other changes to its organisation which will allow it to focus more, and to better effect, on two other elements of the business – its NGN activities, as mentioned above, and another sphere, that of video communications.

    New Zealand still has a long way to go, as it is sitting at the bottom of the OECD list for broadband penetration and ADSL2+ is still in its infancy. But in the past the company has proved to be a quick mover when necessary, so let’s see if it can catch up with the rest of the world, and so thus give some meaningful work to the new video division.

    ENDS

    *************

    PAUL BUDDE Communication Pty Ltd,
    http://www.budde.com.au

    © Scoop Media

     
     
     
    Top Scoops Headlines

     

    Jan Rivers: The New Zealanders Involved In Brexit

    There are a number who have strong connections to New Zealand making significant running on either side of the contested and divisive decision to leave the European Union. More>>

    Rawiri Taonui: The Rise, Fall And Future Of The Independent Māori Parties

    Earlier this month the Māori Party and Mana Movement reflected on the shock loss of their last parliamentary seat in this year’s election. It is timely to consider their future. More>>

    Don Rennie: Is It Time To Take ACC Back To First Principles?

    The word “investing” has played a major part in the operations of the ACC since 1998... More>>

    Using Scoop Professionally? Introducing ScoopPro

    ScoopPro is a new offering aimed at ensuring professional users get the most out of Scoop and support us to continue improving it so that Scoop continues to exist as a public service for all New Zealanders. More>>

    ALSO: