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Putting the top 40 2011 in a telco context

By Contributor
Tue 1 Nov 2011
FYI, this story is more than a year old

Unsurprisingly, Government’s Ultra Fast Broadband (UFB) Initiative continues to dominate the telecommunications market and the rankings of this year’s Top 40 reflect the issues and opportunities that are presenting to the industry now that the procurement phase is over and the ink is drying on the contracts with the Crown’s build partners. The past couple of years have become something of a fascination for the industry, watchers and participants alike.

The market is fundamentally changing, even to the extent that the definition of "telecommunications carrier” (aka telco) is set to be altered forever.

There are many strands to this change process that present opportunity for those bold enough to want to make their mark. Let’s take a look at just some of them.

The gorilla in the room is still Telecom. As we count down to the demerger that has enabled the market behemoth to take a big slice of the UFB build, many wonder how a separated Telecom will actually work and in fact if it will work. Even separated, Telecom’s component parts will be formidable companies in their own rights and with critical mass and capability to burn many believe that market dominance is not a thing of the past. The key people shaping both the conduct and oversight of the demerger will be significant contributors to the industry shakedown in the next 12 months.

And of course there are new kids on the block too. Chorus is joined in the Wholesale Infrastructure Provider family tent by the likes of Enable, Northpower and Ultra-Fast Fibre Limited who, between them, will be responsible for building and operating some 30% of the country’s UFB infrastructure.

These companies are cut from a different mould to the incumbents. Relatively speaking they think and act fast and, by necessity, operate lean. Their approach to their steep learning and growth curves will challenge industry norms.

The Retail Service Provider space will really open up as fibre infrastructure, available to all-comers on a full equivalence basis, is progressively deployed over the next few years. The shape of this segment, including its participants, is now arguably the biggest unknown in the structural changes spawned by the UFB.

The incumbent providers of retail services have advantages of scale and brand awareness but will they be able to deal effectively with their legacy operations and cost structures and compete with new entrants as such innovations as cloud services make niche plays more viable?

And the demand side is just as intriguing. Government has put a stake in the ground with its "Priority Users”, targeting the health, education and business sectors along with public sector users for early deployment of fibre. The extent to which these sectors look to leverage the new capability and the market structure that comes with them will be a function of the imagination and leadership of those who are charged with driving change.

And the mobile marketplace is also set to hot up as not-so-new-anymore entrant 2degrees continues to grow in confidence and looks to broaden its market focus while Vodafone and Telecom evolve their propositions to meet a market hungry for mobility in all its forms. The proliferation of devices and applications is driving a wave of consumerisation of ICT that is at once challenging for corporate environments and enabling for innovation.

So let’s look at what you’ve got to be involved in to be deemed to be an influencer.

The cogs in the industry machine that we normally think of when looking for influencers are the supplier community, the grouping that calls itself "the industry” and comprises the big telco players, Telecom, Vodafone, TelstraClear, and a diverse array of smaller and niche service providers and equipment manufacturers, and the regulatory bodies, MED, the Commerce Commission and latterly CFH.

To make the cut as an influencer you typically had to be either one of the big guys or one of the makers of rules. More recently though innovators (typically not big guys or rule-makers) have also become fashionable as influencers, reflecting an increasing appreciation of the myriad of applications for and of the stuff of this industry. This latter group is the thin end of the demand side wedge that is now set to be driven into the industry as the biggest and most powerful emerging influence and agent of change.

The people who will influence the change process and the ultimate shape and conduct of this industry will be those with vision and imagination. They’ll be the ones with energy; the doers, not the talkers.

They’ll be leaders and communicators who can enthuse and energise others. And they’ll be the ones articulating the huge opportunity for NZ Inc. and going after it rather than watching from the safety of the sidelines to see what happens.

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