Category: telcos

On running late

Is chronic lateness a trait shared by the entire tech industry?

Business Insider’s unathorised biography of Yahoo CEO Marissa Mayer is both enlightening and scary while giving some insight into the psyche of the tech industry.

Nicholas Carlson’s story tells the warts and all tale to date of a gifted, focused and difficult to work with lady who’s been given the opportunity to lead one of the Dot Com era’s great successes back into relevance. It’s a very good read.

Two things jump out in the story; Mayer’s desire to surround herself with talented people and her chronic lateness.

When asked why she decided to work at a scrappy startup called Google, which see saw as only having a two percent chance of success, Mayer tells her ‘Laura Beckman story’ of her school friend who chose to spend a season on the bench of her school varsity volleyball team rather than play in the juniors.

Just as Laura became a better volleyball player by training with the best team, Mayer figured she’d learn so much more from the smart folk at Google. It was a bet that paid off spectacularly.

Chronic lateness is something else Mayer picked up from Google. Anyone whose dealt with the company is used to spending time sitting around their funky reception areas or meeting rooms waiting for a way behind schedule Googler.

To be fair to Google, chronic lateness is a trait common in the tech industry – it’s a sector that struggles with the concept of sticking to a schedule.

One of the worst examples I came across was at IBM where I arrived quarter of an hour before a conference was due to start. There was no-one there.

At the appointed time, a couple of people wandered in. Twenty minutes later I was about to leave when the organiser showed up, “no problem – a few people are running late,” he said.

The conference kicked off 45 minutes late to a full room. As people casually strolled in I realised that starting nearly an hour late was normal.

It would drive me nuts. Which is one reason among many that I’ll never get a job working with Marissa Mayer, Google or IBM.

A few weeks ago, I had to explain the chronic lateness of techies to an event organiser who was planning on using a technical speaker for closing keynote.

“Don’t do it,” I begged and went on to describe how they were likely to take 45 minutes to deliver a twenty minute locknote – assuming they showed up on time.

The event organiser decided to look for a motivational speaker instead.

Recently I had exactly this situation with a telco executive who managed to blow through their alloted twenty minutes, a ten minute Q&A and the closing thanks.

After two days the audience was gasping for a beer and keeping them from the bar for nearly an hour past the scheduled finish time on a Friday afternoon was a cruel and unusual punishment.

This was by no means the first time I’d encountered a telco executive running chronically over time having even seen one dragged from the stage by an MC when it became apparent their 15 minute presentation was going to take at least an hour.

It’s something I personally can’t understand as time is our greatest, and most precious, asset and wasting other people’s is a sign of arrogance and disrespect.

Whether Marissa Mayer can deliver returns to Yahoo!’s long suffering investors and board members remains to be seen, one hopes they haven’t set a timetable for those results.

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Are apps killing the text message?

Have we seen the peak of the mobile phone SMS use?

One of the great accidental successes of our times has been the Short Messaging System – or SMS – which was designed as a control function on GSM mobile phones.

In 1993, telcos in Finland started offering SMS as a feature and Nokia began supporting the service on their phones.

Text messaging quickly became a worldwide success as mobile phone users found sending a text message was often more convenient that calling someone.

As the marginal cost for providing SMS is effectively nothing, the feature being built into equipment, the service was a goldmine for mobile phone operators. However the tide might be turning as apps take over.

This was emphasised in a submission by telco Optus to the Australian Competition and Consumer Commission on some regulatory changes governing mobile connection costs where the provider raised the point that the rate of SMS growth is slowing.

First, while SMS usage has grown significantly since 2009, the rate of this growth has slowed significantly over the last year few years. This slow-down is largely due to greatercompetition from IP-based over-the-top (OTT) messaging services.
Over The Top services is telco jargon for apps that replicate phone functions, like Skype or Viber and these are expected to start taking a chunk from telco revenues.
While Optus’ submission is somewhat self serving as they are using the claim as an argument to get more protection, it may well be that telcos are seeing the age of what was the golden goose of SMS coming to an end.
If so, it will be the death of a technology which, for a short time was a very lucrative one.

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Can mobile networks build Myanmar’s economy?

Myanmar, or Burma, is emerging from being a backward economy, can mobile networks help the nation’s economic development?

Fifty years ago Myanmar, or Burma, was one of Asia’s most affluent nations, but a succession of poor governments have seen the country become one of the world’s poorest. Can mobile phone networks be part of Myanmar’s econmic recovery?

The potential economic impact of mobile communications in Myanmar is a report prepared by Deloitte Consulting for network equipment vendor Ericsson claiming that rolling out cellphone networks across the nation will create 90,000 jobs in the emerging economy.

Myanmar is starting from a low base with only 2% mobile penetration rates, compared to over 40% in Timor-Leste and Laos while the average across South-East Asia is over 100%.

Myanmar lags south east asia mobile penetration rates

To address this the Myanmar Post and Telecommunications Department is looking a splitting the existing phone monopoly into three or possibly four licenses.

Ericsson’s report looks at the economic effects of rolling out these networks and some of the opportunities for local entrepreneurs and communities.

The biggest employment effect identified in the Ericsson/Deloitte report is through the reseller networks with 50,000 of the 90,000 jobs created by new mobile services being in the sales channel.

What’s striking about that prediction is how it doesn’t look at the broader effects of modernising the country’s phone network. The report’s authors do mention they believe the overall benefits could boost the Burmese economy by over 9% in a best case scenario but don’t fully delve into where they believe that growth will come from.

myanmar-gdp-effects-of-mobile-networks

It can be expected there’ll be many more indirect benefits as Myanmar’s communications networks jump into the 21st Century, the report itself has a chapter citing various benefits mobile networks have delivered to countries as diverse as Kenya, Chile and Bhutan.

Particularly interesting with Myanmar’s development will be the Chinese influence in rolling out these networks – the PRC is already the biggest foreign investor in the country having largely ignored western sanctions on the military regime and it can be expected players like Huawei and China Mobile will be well positioned in bidding for licenses and contracts.

For local entrepreneurs the complex Burmese language is a natural opportunity for app developers and programmers to develop localised versions of successful applications, the lack of English and Chinese language skills among the population – another terrible neglect by successive governments – will hamstring Myanmar’s digital media export opportunities.

Probably the biggest risk to Myanmar’s success though is the role of the military who are expected to get one of those mobile licenses.

Burma’s terrible economic performance over the last fifty years has been largely due to the incompetence, greed and corruption of various military rulers and, while their continued influence in the nation’s economy may be necessary to placate them and their cronies, the legacy of these people may act as a break on a really open economy or fair markets.

For Myanmar, the opening of cell phone networks is great opportunity. Hopefully the vested interests that have held this nation back for so long will resist the temptation to further damage the country’s prospects.

Burmese landscape image by ZaNuDa through sxc.hu.

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Is Thorsten Heins the world’s bravest executive?

Blackberry CEO claims the tablet computer’s day are coming to an end – it’s a very brave call.

“In five years I don’t think there’ll be a reason to have a tablet any more,” Blackberry CEO Thorsten Heins told Bloomberg TV while showing off his company’s new Q10 handset.

Predicting the end of the tablet computer is a very brave call – particularly from a man whose company’s market share has fallen 90% since the iPhone was released – but does it have any merit?

Thorsten’s view is the smartphone is the device most people rely on. Of the three ‘screens’ we use, the mobile phone is the one we rely on the most and it will be increasingly important as mobile payments, NFC and other technologies develop.

Blackberry’s position is exactly the opposite of Microsoft’s ‘three screens’ strategy with Windows 8 where the aim is to have the same system running on phones, tablets and personal computers.

Apple and Google have chosen to modify their systems, or even have totally different ones such as iOS and OSX, to suit different sized devices.

Supporting the Blackberry view is the famous survey by the now defunct Nortel Networks in 2008 that found one third of workers would rather lose their wallet than their mobile.

When that survey was carried out five years ago, smartphones really hadn’t made much of an impact in the marketplace as Nokia and Blackberry dominated the handset industry.

Today, with smartphones from Apple and Samsung dominating, there’s no doubt the mobile phone is even more important to the typical user. So maybe Thorsten and the Blackberry team are onto something.

Even if the smartphone does turn out to be most peoples’ main computer, it’s unlikely tablets like the iPad are going to fade away as the larger format is too handy for many uses.

Like most things in life it’s a matter of choosing the right tool for the job and in many cases a tablet, or a Personal Computer, is the better device.

What is clear though, is that Blackberry has to make some big bets to survive, so Thorsten’s talking big is quite understandable. You have to give him points for chutzpah.

Disclaimer: I was given a Blackberry Z10 to trial while travelling in Tasmania. I couldn’t figure out how to use it.

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Can Huawei come in from the cold?

Can the Chinese communications technology vendor come in from the cold?

Last Friday the Parliamentary Joint Committee on the National Broadband Committee met in Sydney, I’ll have a story on this in tomorrow’s Business Spectator.

An interesting exchange during the meeting was  between the committee’s chair Rob Oakeshott and Mike Quigley, the CEO of NBNCo.

Rob Oakeshott: “You have advice that either as a department or a statutory body that says there are certain companies that should not be involved with the National Broadband Network build? If so, is that advice still in place?”

Mike Quigley: “Well chair, we work very closely with the appropriate government agencies in this area, obviously there are things we can and things we can’t say, but we have a very close working relationship with those entities and we obviously take their advice on things we should and shouldn’t do.”

“Their advice is still in place and we’re following it.”

I’m going to be in Melbourne tomorrow attending the Australian Davos Committee’s China Forum where, among other luminaries, the Prime Minister and various key people in the Australian-Chinese relationship will be talking.

The company in question is Chinese communications vendor Huawei and their banning from Australian contracts adds an interesting dimension to the discussion on trade relations between the two countries.

Australia has followed the US lead in blocking the Chinese communication hardware company from key contracts like the NBN on security grounds and it’s hard to see how this doesn’t test the patience of the PRC.

We’ll see how this issue plays out as it’s one that seems to be largely overlooked when we discuss trade ties and relationships with Chinese companies.

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Door to door blues

How short term management thinking caught energy suppliers and telecommunications providers short.

The news that energy companies have decided to drop direct door to door selling in the face of prosecution is the latest example of poor thought out performance metrics and managers unsuccessfully trying to shift risks out of their business.

Electricity and gas distributors Energy Australia and AGL embarked on a door-to-door sales campaign to gain more customers. Like most modern corporations, they don’t do this stuff themselves and engaged outsourcing companies who in turn took on commission salespeople to do the ground level selling selling.

It didn’t work well and in face of complaints, both companies had to back away from their campaigns after suffering legal and reputational damage.

The sad thing this has happened before, at the time of telecoms deregulation in the 1990s telcos did the same thing to grow their market share. Door to door sales teams fanned out across the suburbs to sign households up to telephone plans.

In one example, a company hired dozens of backpackers, bussed them to outlying suburbs and sent them out on the streets to sign up as many households as possible.

Initially the campaigns were a success with providers reporting increased signups, greater market share, fat executive bonuses and happy commission earning salespeople.

Then the complaints began.

Customers discovered they’d been lied to, or in some cases falsely signed up, as hungry salespeople did everything they could to get a commission.

At first the telcos thought they could throw the problem over the fence so they blamed the contractors. Eventually the damage became so great the telcos had to back down on their door to door selling as problems multiplied and consumer protection agencies expressed their irritation.

At the heart of the problems with this type of door to door selling is the mismatch of incentives – for managers, contractors and the teams going door to door in the suburbs.

Door to Door Blues

At the coalface are the salesteams trudging around suburbs. In the 1990s telco boom they were largely made up of backpackers whose interests were to sign up as many customers as possible in order to fund the next stage of their travels.

Often, the telco or its contractor would only discover a sign up was the family dog or toddler long after the traveller was sunning themselves at Koh Phi Phi.

Using Indian students as the energy contractors were doing largely fixed some of the worst excesses of the 1990s but it didn’t address all of the problems

Management misalignment

Driving the rush for sign ups are usually poorly designed  management Key Perfomance Indicators – a dumb set of executive benchmarks rewards poor  behaviour and creates unforeseen risks. Particularly when those KPIs are focused on short term metrics.

Very quickly the risks in the short term focus become apparent and managers back off from these programs.

In this case it appears Energy Australia’s managers heeded the early warnings and backed off before the problem became too great, unlike the telcos who let the sales teams run rampant before reigning them.

What’s saddening about Energy Australia’s and AGL’s problems is they were totally forseeable and those who warned of the risks in a door-to-door customers acquisition strategy – and there were almost certainly some in these organisations – were overuled by enthusiastic executives aiming to bust their sales and market share metrics.

Sometimes we are condemned to repeat history repeatedly in business.

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Dealing with the data explosion

Supply the mobile base stations for data hungry customers is one of the great challenges for telcos. How they resolve this will create some unusual alliances.

“Last year’s mobile data traffic was nearly twelve times the size of the entire global Internet in 2000.”

That little factoid from Cisco’s 2013 Virtual Networking Index illustrates how the business world is evolving as various wireless, fibre and satellite communications technologies are delivering faster access to businesses and households.

Mobile data growth isn’t slowing; Cisco estimate global mobile data traffic was estimated at 885 petabytes a month and Cisco estimate it will grow fourteen fold over the next five years.

Speaking at the Australian Cisco Live Conference, Dr. Robert Pepper, Cisco Vice President of Global Technology Policy and Kevin Bloch, Chief Techincal Officer of  Cisco Australia and New Zealand, walked the local media through some of the Asia-Pacific results of Virtual Networking Index.

Dealing with these sort of data loads is going to challenge Telcos who were hit badly by the introduction of the smartphone and the demands it put on their cellphone networks.

A way to deal with the data load are heterogeneous networks, or HetNets, where phones automatically switch from the telcos’ cellphone systems to local wireless networks without the caller noticing.

The challenge with that is what’s in it for the private property owners whose networks the telcos will need to access for the HetNets to work.

One of the solutions in Dr Pepper’s opinion is to give business owners access to the rich data the telcos will be gathering on the customers using the HetNets.

This Big Data idea ties into PayPal’s view of future commerce and shows just how powerful pulling together disparate strands of information is going to be for businesses in the near future.

But many landlords and wireless network owners are going to want more than just access to the some of the telco data — we can also be sure that the phone companies are going to be careful about what customer data they share with their partners.

It may well be that we’ll see telcos providing free high capacity fibre connections and wireless networks into shopping malls, football stadiums, hotels and other high traffic locations so they can capture high value smartphone users.

One thing is for sure and that’s fibre connections are necessary to carry the data load.

Anyone who thinks the future of broadband lies in wireless networks has to understand that the connections to the base stations doesn’t magically happen — high speed fibre is essential to carry the signals.

Getting both the fibre and the wireless base stations is going to be one of the challenges for telcos and their data hungry customers over the next decade.

Paul travelled to the Cisco Live event in Melbourne courtesy of Cisco Systems.

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