Paul Wallbank – Brilliant Communications

Tag: telco

  • How the cloud beat the telcos

    How the cloud beat the telcos

    Yesterday this site looked at the telcos’ battle to diversify in a world of declining sales and margins.

    One of the areas where telecommunications providers failed dismally was in data centres – what should have been a relatively easy area for them to move into turned out to be an industry that was culturally alien to them.

    This week showed how costly that failure was for the telcos as AWS, Microsoft and Google all reported huge growth in their cloud revenues. Microsoft’s cloud business nearly doubled in value while AWS grew almost 50%.

    While for Google, the company is still grossly dependent upon advertising for its profits, at least their cloud services are the fastest growing part of their business. Their struggle to diversify is beginning to show some results.

    The telcos though can only look and wonder at what might have been.

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  • Telcos and the battle to diversify

    Telcos and the battle to diversify

    How Australia’s incumbent telco, Telstra, deals with the industry’s commoditisation is the topic of my interview in Diginomica with the company’s Hong Kong based director of Global Platforms, Jim Fagan.

    The need to diversify is pressing upon Telstra with the company’s income down 3.6% in its last financial report with mobile sales, by far their biggest revenue earner, down eight percent.

    Across the developed world, telcos are seeing their markets slowing with global smartphones sales largely static, formerly big profit generators like SMS declining and broadband data rates collapsing.

    In the US both formerly untouchable telcos are struggling which has seen them attempting to diversify with AT&T buying Time-Warner for $85 billion and Verizon buying Yahoo! despite its problems that saw a $250 million discount after the service’s hacking scandal.

    With the pressures on the telco industry, it’s not surprising they are looking at alternative income streams and Telstra’s strategy seems to play more to their traditional strengths than a media play, which Telstra has tried previously and failed.

    It could be though that Telstra, like all telcos, could be destined to become a utility service. While that might disappoint executives and shareholders who dream of glamour, excitement and high profits, that might not be a bad thing.

     

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  • Winning the gig

    Winning the gig

    A year back this blog asked if Chattanooga’s experience shows how city infrastructure can drive private sector investment.

    “The Gig”, as Chattanooga’s civic leaders have branded the city’s broadband rollout, came about because the city decided to treat internet services as a utility like water and roads. Vice Motherboard reports how this has reaped dividends for the town.

    As Vice’s Jason Koebler describes, Chattanooga’s unemployment rate has halved since the depth of the Great Recession and in 2014 was listed as having the third highest wage growth among the United States’ mid-sized cities.

    There are downsides though, Koebler warns, and one point is that having good broadband on its own isn’t a sure fire bet.

    “Like the presence of well-paved roads, good internet access doesn’t guarantee that a city will be successful,” he writes. “But the lack of it guarantees that a community will get left behind as the economy increasingly demands that companies compete not just with their neighbors next door, but with the entire world.”

    The advantage Chattanooga had though was its electricity company was owned by the city which meant a major part of the existing infrastructure was already in public hands and made it relatively easier and cheaper to roll out the network.

    What Chattanooga does show is a well planned and structured fibre roll out can be done, it is easy or cheap and takes sensible planning. The latter is something other broadband projects can learn from.

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  • Huawei’s attempt to shape the cloud

    Huawei’s attempt to shape the cloud

    For the last two days Chinese network equipment vendor Huawei has been holding its first Huawei connect conference in Shanghai.

    There’s alway plenty to announce at these conferences and Huawei had consultancy partnerships with both Accenture and Infosys, their IoT strategy and their big push into cloud computing.

    Ken Hu, the company’s current CEO, even had a new word – cloudification – to describe how business processes are going onto the cloud. Although during the segment on their relationship with SAP, the Huawei executives were at pains to emphasise that in their view most enterprises are a long way from going to a public cloud and will be hosting their own services for some time yet.

    Despite the clumsy buzzwords, Huawei does have an interesting selling point in the market with its tie up with telcos giving it both a strong sales channel and a unique selling point. How well they execute with telecommunications companies that are notoriously poor at selling these services remains to be seen.

    Huawei’s internet of things services are a similar proposition. Being close to the carriers means the company is well positioned to compete in the market, particularly in M2M applications, but again that closeness to telcos could be a hindrance.

    The big message from Huawei Connect is that Chinese companies are genuine competitors to European and North American companies like Ericsson and Cisco, something illustrated on Tuesday when Tencent previewed their new head office in Shenzhen that will act as a live R&D lab for their IoT offerings.

    Overall Huawei Connect was a good example of the Chinese government’s efforts to shift the nation’s economy up the value chain.

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  • Rolling out innovation on 5G mobile networks

    Rolling out innovation on 5G mobile networks

    “We’re in the flip phone era of 5G networks, people don’t realise today’s 4G mobile standards were written for the era of the flip phone,” says John Smee, the Senior Director of Engineering at Qualcomm Research

    John was speaking to me at chipset manufacturer Qualcomm’s San Diego head office to discuss the next generation of mobile phone services.

    Putting together communications standards isn’t a simple thing, as John says “what we’re discussing now is what today’s five year olds will be using when they turn fifteen.”

    John sees the new standard as giving the next generation of internet giants their market opening, pointing out companies such as Facebook and Uber benefitted from the rollout of 4G networks and some of today’s startups will get a similar boost from 5G services. “A few clicks and you’ve ordered a ride. That wouldn’t have been possible without 3G connectivity, high powered smartphones and networks that are scalable.”

    “What are going to be some interesting new startups that become huge multibillion dollar industries from 2030,” he asks. “By definition we don’t understand the future.”

    For telco executives being a ‘dumb pipe’ is one of their nightmares and John believes they can avoid that fate in a 5G world by concentrating on their advantages with licensed spectrum. “If they are looking a high reliability and low latency services then the quality of the connectivity they can offer becomes essential,” he says.

    While the standards groups continue to work on the 5G standards, the technologies continue to evolve. John Smee’s message is that these new products are going to offer opportunities for new companies.

    The trick is to figure out which of today’s startup companies will be the Uber or Facebook of 2025.

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