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Hard and Fast


By Antonios Karantze, in , posted: 6-Jan-2010 17:52

New Zealand Telecommunications has gone through one of the most significant periods of intervention, change and investment - and now the industry is about to enter the most dramatic period: identity.

2degrees Mobile and Telecom XT launched in 2009. Vodafone, Orcon and towards the end of the year, TelstraClear, launched offers using unbundled copper lines (telecom copper connected to other providers infrastructure). Telecom Wholesale created and launched a huge range of IP-only access products, allowing a service provider to offer Internet, Internet+IPVoice, or Private Network products, with a range of service speeds and characteristics.

The Commerce Commission waded in on commercial wholesale rates for voice calling for fixed and mobile networks, and of course the government pushed the Crown Fibre Company concept. The field service industry was shaken by Visionstream in Northland, and the march of Downer EDI as the technicians of choice. Chorus began the hard work of turning variable grade copper and successive investment decisions of the last 30 years into a semi-viable business model. and the last vestiges of the NZ Post Office were tackled (there are still chalk and blackboards in use out there, in the depots.).

TelstraClear flipped back to Vodafone for mobile, Black and White, Digital Island, Compass and Callplus all took Mobile (Wholesale) offers to market, most settling around the 25c/minute mark for mobile (good rate that.). FX Networks continued to cobble together a fibre network of own-grown and in-sourced, the utility companies tried to become telco's (Northpower, Vector.).

So lots of technology investment, lots of change, lots and lots and lots of money being spent. Or at least, planned to be spent.

NZ was about 4.2m people five years ago. I think we're about 4.3m now. The NZ telco industry is forecast to shrink from $5.6bn to $5.2bn by 2012. and the collective investment of the last few years has been about $4bn as I recall.

Commercial models based on the old world of TDM - POTS for Voice, with DSL grafted on top, moving up to Centrex or Trunk lines - is disappearing as the technologies become just another service, sitting on top of an IP-enabled access circuit. Mobile phones' continue to be the access device of choice (note I said MOBILE - not the mobile service providers).

The notion of paying $xxx for a phone line, $yyy for mobile, $zzz for Internet, and a raft of rates and charging models (1 minute billing, per minute billing, mobile mb being expensive but fixed being cheap). is all challenged, thrown in the air, and being thought about by many people. Some have no experience in economics, the reality of making targets, the challenge of recovering expensive installation costs. Some like to push numbers as a soundbite. Others overthink the market or allow inertia to act as a cushion to aggressive or poor sales practises.

Identity is the next big change to happen, as a way of standing out or just surviving this brutal market. Superior technology was an excellent way of creating identity, until the competition caught up. Telecom has caught up, and at a national level - so the technology line is reset (good time to buy shares btw - their performance can only improve from here). What do the others stand for? are their services even relevant now? Being $5 or $10 cheaper than the next one in line is hardly a compelling reason to change providers. And would you really trust your critical business apps to a company that comes in thousands of dollars cheaper? that gap in revenue is being achieved by some means, and not all of it is new technology - a lot has to do with tiny investment in backup systems and resilience.

The major movie franchises spent most of this decade being successfully recast - REBOOTED - along the lines of reality, grit, plausibility, and connection with the audience. Daniel Craig's James Bond is brilliant. Batman is enjoyable. Sherlock Holmes was enjoyable and grounded in the real when dressed in fantasy. So it goes.

2010 marks the start of the reinvention of NZ Telecommunications. The models of the old are challenged and under severe strain. The game has been lifted for all players. There is less money to be made but more people chasing it.

Companies will fold. Products will fail. Teams will be reorganised. Strategies will be challenged. Pressure will cause innovation. Careers will be made. Companies will succeed.

I look forward to being part of it!

BTW: This is the first article I wrote using Windows Live Writer and posting via the Metaweblog API Mauricio made available quote some time ago... worked very well...

Other related posts:
2Degrees prepay price change
Consolidation (“and then there were fewer”)
Introducing the Hot New Social Network (updated!)

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antoniosk's profile

Antonios Karantze
New Zealand


Antonios has been actively employed in the IT & Technology sector since 1991, and has worked on many commercials projects and products in New Zealand, Australia and the United Kingdom. Working in product or actively managing programmes of work, he has always focused on building for the end customer, and not just promoting new technologies. Industry experience includes all telecommunications areas for business and private customers, private insurance, loyalty, media, energy and gambling. 

Since 2013, he has been involved with the development and launch of many popular smartphone applications in New Zealand, including

- TAB Mobile
- AMI & State Insurance digital experience
- Fly Buys
- Newshub for web and app
- Genesis Energy & Energy Online
- MyACC for Business

Genuinely passionate about technologies, internet and computing in general, he lives in the city he was born in - Wellington, New Zealand, the creative heart of hub of digital sector for the country.