telcoinabox

Such was the question posed at a recent seminar delivered by Ovum, one of the world’s largest telecoms and IT research companies, attended by Telcoinabox and a host of other companies involved in the wholesale telecommunications market. Luckily for us the picture painted by Ovum was a fairly positive one.

The key message was that wholesale is no longer considered a dirty word and for the majority of carriers the wholesale telecommunications market has made (and is still making) the transition from being a “necessary evil” (i.e. something that had to be offered to satisfy the national regulator) to a thriving commercial opportunity.

Aside from mere compliance with regulatory demands a wholesale division offers a number of benefits to a telecommunications carrier including;

• A “second bite at the cherry” to retain some revenue if a retail customer is lost to competition
• Increased utilization of network capacity, which in turn brings…
• Quicker return on investment in infrastructure
• Lower incremental unit costs for the retail division

Some of these points are very relevant when it comes to discussion of the future direction of the industry and in particular the proposed National Broadband Network (NBN) and the roll-out of Fibre to the Node (FttN) technology. The principal behind the NBN is to provide broadband speeds of at least 12 Megabits per second (Mbps) to every Australian household or business no matter where it is located geographically. Requests for proposals have been issued and there are currently two parties (Telstra and Terria - a consortium of other carriers including Optus) who are frantically preparing submissions for the November deadline.

Without a crystal ball it is impossible to predict how this will pan out but it is clear that it will dramatically change the Australian telecommunications landscape. With all of this change going on in the industry it is tempting to think that those dependent on wholesale services (such as Telcoinabox and its customers) are at risk of being marginalized but the reality is that nothing could be further from the truth.

Both parties involved in preparing bids have made it clear that they intend to provide open access to the proposed network although the price of this and whether it is regulated or not are likely to be contentious issues. Should this turn into reality then Telcoinabox is well-placed to take advantage of the new products that our current supplier partners and others will be developing in conjunction with the new network.

It is, in fact, the infrastructure builders who have spent vast amounts of money on capital projects to roll-out equipment (DSLAMs) in Telstra exchanges that face a greater period of uncertainty. The likes of TPG/Soul, Internode and iiNet face the possibility that their equipment and investments will be bypassed and become redundant as the NBN is rolled out and they may be back to square one on a level playing field with everyone else when it comes to accessing the new network.

While there is undoubtedly much that is changing in the industry there are some universal truths that never change such as the things required from a good supplier. In the words of Ovum the ideal wholesale telecoms supplier is;

”An agile, fast-reacting supplier which proactively maintains strong client communication and offer s innovative forward-thinking products that take account of broadband and convergent futures, supported by automated processes for daily operations, all underpinned by a personal relationship at all levels based on trust and the delivery of promises.”

This statement bears a striking resemblance to Telcoinabox’s purpose and is equally applicable to the supplier of any products or services no matter what industry they operate in. Indeed if you are reading this as one of our service providers then it would be interesting to look at your own business through this “filter” and see how you measure up.

In summary the “brains trust” at Ovum believes that the wholesale telecommunications market in Australia is in good shape to withstand, and perhaps benefit from, the expected financial turmoil. However, the players that will really succeed in the market are those that can get close to their customers and really understand their needs, be flexible enough to adapt their business to meet those needs, streamline their operations to support those needs and foster a culture of continuous improvement. Hardly rocket science but sometimes the simplest sounding things can often be the hardest to do.

Author: Paul Line
Email: paul@telcoinabox.com