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Hard and Fast

2007: the year of the challenger (again)

By Antonios Karantze, in , posted: 14-Jan-2007 20:15

About 10 years ago, a former GM of Marketing at my then employer (Telecom) made the prediction that toll revenue was going to disappear, and that a new competitor was being created every day. He also said the competition were coming over the hills in droves.

Promptly a bunch of cheap toll providers did appear, and they did start denting Telecom's revenue. It was enough to spur innovation in marketing and pricing, and created focus on the customer. Many customers appreciated the concept, some even switched, but most just waited for Telecom to come up with an offer and then took advantage of it. No swaps in billing, no arguments with another company, no clever technology to sort out.

For anyone who follows NZ telecom's, it's pretty obvious this year will see real marketing and general spend by the telco's, as they take advantage of the coming liberalisation of the copper network. Expect flashy campaigns, silly marketing offers, really bad business planning, and some truly interesting offers to be generated.

And for the first time, everyone who is a serious player will have their own network (of sorts) to use, rather than a mishmash of purely undiffirentiated wholesale versions of Telecom's products.

DSLAM manufacturers will do well - Alcatel more than most (Telecom NZ outsourced their fixed network to Alcatel some years ago, and the mobile network to Lucent. Now those 2 companies are merging to become Lucatel, they have most of TNZ's network business. Not the fibre network though.....).

NZ will become more educated in the language of VOIP and dual-play Voice+Internet offers. Every telco who chooses to go after voice revenue - or even protect what they've got - will have to invest and have a competing offer simply to stay in the game.

Telecom will begin upgrading it's the broadband backbone to gigabit ethernet, and eventually the connections to local nodes. Everything will become faster, although there will still be chicanery on International traffic because that costs real money, and telco's can face massive bills very quickly if they're not prudent.

I reckon now is a great time to work in NZ telecom's - enough people believe there is such a great opportunity  there will be investment (of a fashion) and marketing focus to 'go get sum'. Hustling over the phone and door to door will go up - you don't invest at this level on the hope consumers will call you. Expect articles in Fair Go and the news about dissatisfied conversions etc. But it will be a busy one, and many people will finish the year thoroughly burnt-out.

In the rush for the customer I expect many poor deals to be accepted. Ridiculous build and installation costs 'absorbed' to win business. Disruption and outages like never before - there will be some interesting situations - which means 2008 will probably be the year of the Hangover!

Are you ready for a good time?

- Antonios

PS: as my blog profile states clearly at the top, I work for TelstraClear

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Comment by juha, on 14-Jan-2007 20:40

Yes, I quite agree... having a network now is being in a power position. 2007 will be a busy year.

Comment by sbiddle, on 14-Jan-2007 20:57

Great summary..

Comment by chiefie, on 15-Jan-2007 08:47

Nice write up! The only thing I would want to ask is... why "Lucatel"? Why not "Alcent"? Just seem pretty funny to me, with either anyway... If I have the power to name any merger, in this case, I'd name them, Alcatel-Lucent. But it's not my decision... *move along*

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antoniosk's profile

Antonios Karantze
New Zealand

I'm a born and bred Wellingtonian, and have chosen IT and Telecommunications as my industry, as a Commercial Manager.

Credits include but are not limited to:
- The O2 Xda smartphone range, and O2's range of 3G Mobile Internet services
- Numerous TelstraClear Mobile and IP voice products

In my journey through the industry I have worked at
- Bellsouth NZ
- Telecom NZ
- ICO Global
- T-Mobile International (formerly One2One Communications)
- O2 Plc
- TelstraClear
- Vodafone NZ

I'm a fan of technology, and what it can do for people and business... and I enjoy bringing new things to market and seeing them grow. Enjoy the blog, take the time to think about what I write - it's not technology heavy, and is my reflection on life and the people around me.