Taking the NBN model to mobile

Tony Poulos
11 Jun 2013
00:00
News
Commentary

When you spend a lot of time in Europe, it is striking just how different its telecoms market is compared to Asia. Ignore for the moment the multiple national markets separated mainly by language, the challenges being faced by the digital storm, the intense competition, the rigorous and diverse regulation and the ridiculously high cost of spectrum because these are traits shared by both markets. What seems to be missing in Europe is ambition, willingness to invest in innovation and a sense of urgency.

And by urgency, I mean serious planning to cope with dropping voice revenues, increasing data volumes and the transformation of networks and business systems. Not all European CSPs fall into my sweeping category - there are some dramatic exceptions like Telefonica, Telecom Portugal and Orange. But for the majority it is business as usual as storm clouds gather.

When I ask why, I keep getting the same response - conservative shareholders and investors. Network operators have, since the days of deregulation and privatization, been highly profitable, high turnover businesses with high investment costs required to keep up with technology and volumes. At the first sign of a slow down the investors and markets go into hibernation, and technology and innovation are the first to suffer.

CxOs are finding it more and more difficult to present toned-down, realistic business cases to boards that are accustomed to massive cash flows with guarantees of return. The idea of investing in or acquiring other operators in Europe to shore up declining domestic revenues is not being considered, let alone spreading far a field in search of younger, fast-growing emerging markets.

Those that have had traditional involvement in national carriers in Africa and South America in particular are facing the unusual situation that the children are not only growing up but are now bigger, more profitable and more agile than them. We may even see reverse takeovers in the future - that's if the European parents are even worth buying.

European regulator Neelie Kroes keeps talking up a single European market by 2015, but you can't even cross a national border without being hit with big roaming charges. Prices across Europe for broadband, both fixed and mobile, are so disparate you would think the countries were a million miles apart, not sharing common borders.

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