Telecom Flat World?

19 06 2009

Earlier when I posted a blog “Go Global Telecom..!” I had a perspective in my writings. If you said world is flat, then you shouldn’t have missed this simple fact. By flat world, I simply mean ignoring Asia-Pacific or emerging markets could be fatal in future! Whosoever you are! Ok! Let me justify the same.

Recent research report by Telegeography paints bleak future for some of the world’s mighty telecom giants. Perhaps, the rise of Huawei & ZTE symbolizes the fact that, emerging economies will be hosting the center stage of world telecom developments in coming years. The report shows the sharp declines in the revenue & growth for mighty ten. Look at the stats below.

These ten saw the quarterly revenue decline by 4% y-o-y(in local currencies), with Sprint-Nextel posting 12% drop. One prominent reason for the decline; almost all of these companies have focused on developed markets only, which are already saturated. Or in other words none of them operates in India or China. These stats are exactly opposite to those of China Mobile, Vodafone, America Movil, China Unicom etc where all these companies reported Q1-09 revenues at least 10% more than Q1-08.

Voda has benefited by stronger growth report card in India. While other Indian telecom giant Bharti Airtel is looking for consolidation with South African MTN, we could only see the telecom revolution (revenue market) is turning away from developed world to developing world. Indeed this is the most vivid proof that World is Flat! Isn’t it?

(For further details check: www.telegeography.com/products/gcomms_insight/index.php )





Opportunities for Location Based Services in India: A Brief!

30 05 2009

These are some facts to be aware of Location Based Services. Compete, a web search company who has come up with the findings about LBS and their usage among smart phone users. According to survey conducted of 1000 such users:

1. 1 in 3 users uses LBS.

2. Smart phone users who use LBS pay more monthly bill as compared to their counterparts who don’t use LBS.

3. Weather, Navigation & Store location are three most popular LBS.

When recently Tata Indicom announced launch of A-GPS service in collaboration with Qualacomm, they are certainly going beyond mere concept of Location Based Map services. Though the response to the services isn’t known yet, there are some issues involved with A-GPS when it comes to Indoor environment which might prove hindarance to adaptation of A-GPS based LBS.

Recently I had visited the webpage http://skyhookwireless.com. The company is pioneer in providing LBS with its innovative XPS i.e. Hybrid GPS System. As per initial reviews, XPS offers better performances as compared to GPS & A-GPS, both due its innovative approach to LBS. It gathers data from hundreds of Wi-Fi APs, GPS Satellites & thousands of Cell Base Stations to locate users with pinpoint accuracy. Certainly 6 year old company came into limelight after Apple decided to use its core technology in iPhone platform.

There are many caveats which need to be addressed before offering LBS. Gathering sufficient data based on satellite isn’t handy all the time and A-GPS solution isn’t reliable enough in Indoor environment. Also GPS receivers have Cold Boot issue when they are turned on. Though there is rise in number of applications dealing with LBS services on iPhone platform, coming years will certainly add many more in fray as more smart phone users are expected to use these kind of services. But as of now, outlook for LBS in India is grim, with only few takers for these costly services without any notable application in market.

Now coming back to three types of LBS used widely, Indian market surely has potential for all the three services. From farmer’s point of view, knowing about weather in advance will surely going to help him a lot  before planting crops or navigation services will help users navigate safely during storms or bad weather which is prevalent is many parts of country. But as said many times, affordability of these kinds of services is big hurdle in their mass adaptation. Cost effectiveness plays major role in subscribing VAS in Indian market.

It is estimated by ABI research that market for LBS by the end of 2013 will be around $13billion, Indian Mobile Operators are surely looking to grab the piece of cake in coming months. With the launch of 3G/WiMAX and rise in smart phone users, certainly there  lies potential for LBS to be exploited. But let’s address the need & affordability issues before we hurry up launching of LBS, as practically every LBS technology in market has some nasty issues to think seriously about. But still LBS are going to be major contender for VAS revenues in NGN. Though in US, LBS services based applications are tied up with specific smart phones, in India where we have few Smart phone users  yet, Nokia ‘Ovi’ LBS may generate significant revenues for troubled device maker. Also there lies little scope for LBS on existing 2G platforms. So in short we will have to wait a bit longer to see surge in LBS applications mushrooming India market.





700 million Broadband subscribers by 2013?

29 05 2009

 

Though we have only 7 million Broadband subscribers in India (Fig update-Qtr End Mar-09), this hasn’t damped the Telegeography from predicting the Upbeat future for Global Broadband Connections in near future. According to GlobalComms Insight, by the end of 2013, the number of Broadband subscribers across globe will touch the mark of 700 million, growing by 72%, while wireless subscription will have grown over two billion, an increase of 60%. The survey also predicts that: number of fixed lines will also fall over in next five years, but the decline will be gradual and will be offset by growth in Wireless & Broadband segment.  In short, GlobalComm insight predicts that by the end of 2013, there will be no fewer than 2.5 billion net new subscribers or revenue generating units.

The research also states that Asia-Pacific region will continue to dominate the global market in terms of subscribers’ number with almost 50% of global share, but they will account to only 28% of global market value. Though North America’s impact in subscriber figure will reduce to only 7% of global share, they will continue to hold 23% of global market value. This is really significant finding to note.

Which countries will dominate the growth figures? Which 3G services will push the numbers? What regulator policies will help in achieving the targets?  Will India be the frontrunner in Broadband space? We will have to wait for answers to some of these questions. But here in India, where we are still awaiting for spectrum allocation (or rather release) for 3G/WiMAX and consequentially rise of Data Industry, these predictions sound highly inflated. Unless and until we have clear policy guidelines on 3G/HSPA or NGN, it is very likely that we might miss the bus with great margin. Time has come to really push forward the Broadband agenda in next five years. Now it is with policymakers to decide the right time for auction without further delay. Unless we push forward for 3G/WiMAX, we are likely to remain Internet Clogged country in coming years. Till then, Wait & Watch!





The Enterprise of Future: Telus Case Study (Concluded)

9 05 2009

From IBM Study Pages

 TELUS: DELIVERING ON EVERY COUNT

Canadian telecom provider TELUS excels when it comes to CSR. The company is committed to reducing its own carbon footprint by cutting its fuel and electricity consumption, encouraging employees to telework or use environmentally friendly forms of transport (such as walking, cycling or public transport), and minimizing emissions from airtravel. It has also developed a number of “green” business solutions to help other companies reduce their impact on the environment.

 TELUS is simultaneously making an active effort to reduce waste, with a free program for disposing of unwanted handsets and accessories, irrespective of the carrier. In 2007, it recycled more than 40,000 phones, and partnered with Tree Canada to plant a tree for each handset collected through its “Return and Recycle” program.

 The company also works closely with other telecom providers, law enforcement agencies and government departments to tackle the problem of online sexual exploitation and make the Internet a safer place for children; participates in a number of corporate philanthropy programs; and supports various artistic and cultural initiatives across Canada. These efforts have deservedly earned TELUS a place on the Dow Jones Sustainability Index; indeed, it is the only North American telecom company to enjoy such an accolade.





The Enterrpise of Future: Telecom Industry Edition-(Final Part)

9 05 2009

Now, we have reached to last topic of discussion in the series ‘Enterprise of Future: Telecom Industry Edition’. Today we will talk about creating long term relationship with the community, which telecom companies are serving. In other words, the final trait of ‘Enterprise of Future’ we will talk about Corporate Social Responsibility (CSR). Let’s explore it!

CSR isn’t a new proposition. In India one of the leading IT Service firm, Infosys Technologies (Infosys foundation) is one of the pioneers of CSR. But in Telecom Industry the idea has yet to kick start. Basically when we are talking about CSR- we talk about acting in an ethical fashion that considers need of workforce, society & environment as well as those of investors.

According to IBM Study, only 53% Telecom CEOs believe that CSR is a good proposition for business, as compared to overall average of 69%. That could be the reason telecom CEOs are allocating a smaller portion of investment of their total investment to CSR initiative, than their peers in other industry.

The IBM Study justifies the need of CSR initiatives among Telecom organization. This would lead to many opportunities to profit socially & economically. How shall CSR can be implemented? One example cited in the report is about going green i.e. protection of environment. No doubt, the industry is becoming aware of it, but major initiatives are missing. E.g.  The number green BTSs running on renewable energy are far less as compared to number of BTSs running on traditional fuel. The awareness would lead to saving of traditional fuel which will lead to savings of OPEX, which in turn result in profitability. So indirectly, being aware about environmental issues will generate benefits for telecom organization.

There are some other ways to CSR initiatives like addressing the concern of safety of internet or developing new products for disabled people or developing services/products to fill up digital divide etc. So the question is, “Are you bringing innovation by CSR initiative to reduce carbon footprint?” Just imagine the amount of money you could save with Video & Tele Conferencing services. Recycling of old devices like mobiles could also form part of CSR initiative.

Implications:  

From IBM Study

“Telecom companies should focus on creating CSR programs that are aligned with their broader corporate objectives, developing new products and services for consumers who are currently underserved, devising innovative solutions that will help other businesses meet their climate-change targets and providing better recycling facilities. They should also develop more robust content-filtering and security tools, and publicize the steps they are taking more effectively.

In addition to such measures, telecom operators should ensure that sustainability is an intrinsic part of their day-to-day activities – and, here, they enjoy two significant advantages over companies in many other industries. Firstly, they can measure their carbon footprints relatively easily. Their networks typically account for about 80 percent of the carbon emissions they produce, and 75 percent of these emissions come from powering the base-stations that enable mobile phones to work. Secondly, there are several straightforward ways in which to reduce the energy a base-station consumes, such as turning down the air-conditioning, turning off some base-stations during off-peak periods when there are fewer calls to handle and, in the longer term, switching to new generation equipment powered by renewable sources of energy (like solar power or wind power). ”

 





The Enterprise of Future: Telecom Industry Edition- Part IV

8 05 2009

(Discussion will continue with fourth trait of ‘Enterprise of Future’ i.e. ‘Disruptive by Nature’)

Telecom CEOs are putting more emphasis on business model innovation than CEOs in Media, Healthcare & Financial services, says IBM Study of ’Organization of Future: Telecom Industry Edition’. Seventy percent of CEO respondents plan to make serious changes into business model as compared to twenty three percent, who are planning to make only modest changes. 

There are three major types of Business Model Innovation considered:

A. Revenue Model Innovation: This model innovation considers rethinking how revenue is generated through new value propositions & new pricing models. Forty percent of CEOs are planning to bring revenue model innovation. This is the major business model innovation sought after by telecom CEOs in coming two-three years.

B. Enterprise Model Innovation: This model innovation deals with specializing & reconfiguring the business to deliver greater value through collaboration. Thirty percent respondents are rethinking about this type of business model innovation.

C. Industry Model:  This business model innovation deals with redefining an existing industry, moving into new industry or even creating an entirely new industry. This business model innovation is tougher as compare to other two models mentioned above and only fifteen percent CEOs are thinking about it.

In past few years, technology has evolved to an extent that it would be very difficult to define boundaries of operation between different industries like media, IT, advertising and communication. Today, we often see the integrated communication which is an evolved way to contact each other. Even if telecom CEOs aren’t looking at Integrated Communication as a whole bundle, the evasion by other industries into core business of telecom, has forced telecom CEOs to rethink about innovating their business models. But still percent of telecom CEOs who are serious about Industry model innovation are three percent less than overall average, a highly surprising fact.

Implications:

The message is clear, only revenue model innovation won’t do the job in long term. If telecom CEOs are really worried about dynamics of industry, which are constantly under threat either because of regulators or competitor’s technology innovation (like Skype’s VoIP, Google’s Android, Microsoft’s Windows Mobile, or Apple’s iPhone etc), they need to put up enterprise model innovation along with revenue model, at work. Collaborating with other technology firms will enable them to develop new skills, enter new markets and improve the quality.

Should you evade other industries for extra dollars? Yes, you should e.g. collaborate with media firms, content provider, advertising agencies or even with software development firms for those extra dollars. This will be a perfect example of great mix of enterprise & revenue model innovation. When economy will be back in form, the pioneers will surely ripe the benefits of early move.





Go Global, Telecom, Go Global!

8 05 2009

(The importance of IBM Study is highlighted in new research carried out by TeleGeography, which talks about need of  ‘Global Intergration’  for a Telecom Operator, in an highly globalized world. This fact is highlighted, despite the fact that industry is facing global recession.)

Now here comes the support to my earlier arguments ,’Need of Global Integration for Telecom Organizations’. If  Telecom CEOs are more local in their business outlook, as compared to their peers in other industry, then they are restricting their growth, says new research  from TeleGeography’s GlobalComms Insight. Let’s see what the fuss is all about!

The GlobalComms Insight  predicts that both wireless and broadband subscribers will grow at over 10% per year over the next five years. This results in no fewer than 2.5 billion net new subscribers by the end of 2013. However, growth in the value of the telecoms services market will not keep pace with subscriber growth. The bulk of subscriber growth will come from countries where GDP per capita is under USD3,000 per year. Despite the best efforts of service providers to maintain or increase ARPU, global telecoms service revenues will grow less than 5% annually—less than half the rate experienced over the past five years.

Which service providers are best positioned to grow in this changing telecoms services market? TeleGeography’s GlobalComms Insight has studied eight of the world’s leading service providers and produced a range of metrics that describe them and their current business structure. One clear conclusion is that service providers with a more geographically diversified business have enjoyed much stronger business growth over the last three years and are more profitable. The growth prospects of service providers with strong competitive positions in a range of different countries far outstrip those with a single-country focus.

China Mobile is the one company that has managed to buck the general trend, thanks to the blistering mobile subscriber growth in its home market. However, even the world’s largest wireless service provider by subscribers is feeling the pressure, as evidenced by last week’s news that it will expand its global footprint by buying a stake in Far EastTone of Taiwan.

So if you look at the future growth prospects of few organizations, Verizon, BT(I have mentioned BT under Hungry for Change trait, but to be a Globally Integrated Organization, research gives less marks to BT. Surely, BT lacks the third trait. )& NTTDoCoMo lies in the leftmost bottom corner, indicating the need of increasing the footprint beyond national geography. In short, there is a need of more geographical diversified business to sustain growth momentum for BT & NTT.  Telefonica, with its clear strategy has moved up to rightmost upper corner, by expanding its footprint outside national boundary. Same is applied to Vodafone, MTN.

If you are interested in details of research carried out, please check the link below:

http://www.telegeography.com/products/gcomms_insight/index.php

Also check TeleGeography’s Global Database services at:

http://www.telegeography.com/products/global_comms/index.php