Time to Wake up!

Joseph Waring
25 Apr 2011

Sustainable capex

The idea of shifting a capex model from owing the network assets and moving into a more collaborative environment is a sustainable way to move forward, says Axiata group CTO Don Price.

Stating the obvious, he noted that telcos haven't been historically good at sharing. 'If you think back a few years, we wouldn't even share RF design - that was top secret - let alone an infrastructure.'

He says carrier collaboration, or more specifically network sharing, has picked up significant momentum - and not just passive sharing (which cuts costs just 10-12% compared to up to 30% for active or holistic sharing). 

He sees infrastructure sharing as the biggest lever of cost optimization for telcos. 

Telcos may finally be collaborating with each other, but when dealing with those outside the industry the pace of innovation can be stifling.

Yahoo's director of global technology initiatives, Michael Smith, says the biggest difficulty in working with telcos is that it takes too long. 'Things happen over a quarter - and they think that is fast. Yahoo works on a two-week cycle, which we call a scrum.'
He says the revenue share with telcos is also lower. 'This is a problem as we try not to deal with telcos. It's unfortunate as they are in a good position.'

As an example, when it comes to LBS, he says telcos know more than anyone else where a feature phone is. 'But they make it so hard for me to get to that data. So we are all forced to go to this open-cell ID thing that hardly gets updated. In fact, Google has built its own database. There's no reason a telco shouldn't make that available to developers.' Right now it's all smartphone driven, he noted.    

Devaluing the service

CSL CMO Mark Liversidge's biggest fear as mobile operators move into 4G is that the industry will fall into the same trap as with 3G - launching new services at the same or lower price than existing services.

He says mobile operators need to learn a lesson from the huge disappointment of 3G, which they marketed on price, due in part to the over-hyped speed and coverage, and be careful not to devalue their 4G services from the start.

Telcos have traditionally struggled to give consumers a strong value proposition that makes them pay more for enhanced services, be it a faster connection or more data consumption.


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