Preparing for a hard landing

Preparing for a hard landing

Joseph Waring  |   March 15, 2011
Telecom Asia

The window of opportunity for operators to transform their operations and clean up their inefficiencies is not open forever, says TM Forum chairman Keith Willetts. "They are running out of runway."

He said the industry has to get very serious about change and understand it does not control the pace of the industry.

It's time for telco CEOs to be more ballsy and bet-the-farm here, he said. "It's not the time for sitting back and watching someone else pioneer. The market is moving too fast for that. We want to see a few more mavericks and a few more leaders."

Not so long ago, he noted that telcos could dictate when new services would be launched and when customers could buy them. "Now it's time to get used to the pace of change not being set by it but by others around it, which is forcing the industry to start collaborating to fight the common enemy - becoming a commoditized dumb pipe."

In an interview with Telecom Asia at the Forum's Management World event in Singapore, Willetts stressed that operators have to change the way they do business and not just transform, for example, from a circuit-switched network to an IP network. "That's just an evolutionary step - it's a better mouse trap. It's just going to deliver dial tone more efficiently. But what if dial tone isn't needed anymore?"

Noting the stark difference in the economic and business models telcos face, he pointed to the Skype threat as an example.

"I'm in Singapore and I use my mobile phone to call my wife and it costs me a few dollars a minute. I walk to my PC and call on Skype and it costs me nothing. I also have Skype on my mobile, so with the same device I can pay a lot of money or I don't pay a lot of money. It's using exactly the same transport medium. It's not sustainable - people are asking 'why am I doing this?'"
According to Telegrography, Skype now accounts for 40% of international calls, making it the biggest international carrier by a wide margin.

The Forum adjusts

The conversation with operators at the TM Forum, he said, has moved to "how to transform" not "why to".

He noted that in the past the organization has been very helpful to architects, planners and IT people. It's been more a "nice to have" organization. "But in the past couple of years we've seen ourselves move ever closer to the CEO and board to look at some pretty fundamental changes in the way the communications industry and operators are structured."

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