Telcos must 'adapt or die'

John C. Tanner
17 Jun 2009

Telecoms operators need to invest in their networks, go all-IP and embrace their competition in matters like infrastructure sharing - and the global recession is as good a time as any to get moving, said a panel of CEOs Tuesday.

"The business model for telcos isn\'t really about voice anymore," said Dato\' Zam Isa, group CEO of Telekom Malaysia at the opening panel session at the CommunicAsia2009 Summit.

"The majority of our revenue is now from non-voice services for the first time. You have to change your mindset to move up the value chain and become an enabler of any-to-any services, which is what we are doing," he said.

Michael Lai, CEO of Malaysian Wimax operator Packet One Networks, said that all-IP networks will inevitably change operator business models, and telcos who want to lead the post-recession market need to adopt their business model for it.

"Telco services have been based either on time, as in voice minutes, and place - the farther you talk, the more it costs. But IP makes it flat, so time and place are irrelevant," said Lai. "So the next winner of this evolution will be the one who manages that transition well."

Isa added that telcos should partner with vendors to help telcos make that IP transition. "They can help us to train our employees to be more IP-savvy, because many are still locked into the old incumbent mindset," he said.

Part of the changing mindset should also include adoption of infrastructure-sharing practices, said Walid Irshaid, president and CEO of PTCL.

"Infrastructure sharing is a must," he insisted. "In Pakistan we have five companies competing fiercely. Most of them are in the red, and it\'s costly to run these networks separately."

Irshaid said PTCL was ready and willing to discuss network sharing and MVNO arrangements with rival firms, though he acknowledged their wariness of working with the incumbent.

"We want to assure them that we are not here to fight them. We can help them out," he said.

Isa of TM said he\'s also open to the idea of infrastructure sharing, "but it does mean that we have to make sure we are strong on the retail side."

Meanwhile, the panelists said they were optimistic about Asia\'s ability to weather the economic recession, as it\'s still widely viewed as a growth market in the longer term.

"You need a long-term view in the telecoms business," said Lai of P1. "If you want a business model with a short-term view, you should invest in the property business."

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