Johannesburg, 14 Feb 2007
The telecommunications industry continues to enjoy a period of rapid development and changing regulatory environments. This is fundamentally changing the way in which businesses and individuals communicate, work and play - and at the core of development and change is the accelerating concept of convergence.
According to Andy Brauer, CTO, Business Connexion, almost all aspects of telecommunications are changing rapidly in today's environment. "This is an industry in flux - from the technologies being used, to the legislation that governs it, to the business models used to make money from it," he says.
"Previously, clear lines existed between telco carriers, mobile operators, Internet service providers, broadcast providers and outsourced enterprises. Those lines are blurring rapidly and, in many cases, disappearing."
There are other disruptive market forces, some of which have grown from complete obscurity to become powerful market forces. "The volatility and the opportunity that exists in this market has been demonstrated by the rise of open source and 'free' applications like Skype and what can be termed the 'Google effect', where competition has appeared for market leaders as if from nowhere," continues Brauer.
The key driver for the changes in technology is convergence. "The convergence of technologies is a global trend, which is also driving the convergence of business models. There are numerous, rapidly evolving telecommunications packages, and operators are looking to provide multi-play (converged) services (voice, video, gaming and data) over the same medium, in order to effectively maintain or grow their market presence and profitability," he says.
This effect means "traditional" operators are increasingly being compelled by customers and by competitors to broaden their service offerings, carrying not only voice, but also Internet and TV into the home via the same medium, whether cable or wireless. "These models will be challenged by on-demand services, which in turn will be challenged by blended services," Bauer adds.
While the world of telecommunications has enabled the delivery of advanced connectivity solutions for the wealthy, there remains a requirement (typically enforced by the universal service obligations imposed by governments on operators) to extend connectivity and communications to under-serviced areas. "This reflects the critical nature of telecommunications. Access is considered a fundamental human right by governments," says Brauer.
He believes low earth-orbiting satellites may in future become a dominant technology for the provision of services into low income regions, which might have the effect of stimulating the growth.
Meanwhile, demand for technology-enabled services will continue to increase. "However, for the end-user, the focus and the interest are not on the technology but on the service delivered. If the service is perceived to be of value, the operators providing it will survive and prosper. The onus in this increasingly globalised and competitive market remains on the operators to create and deliver such services effectively."
As the services business evolves, Brauer believes a hybrid understanding of technology and business will emerge as the traditional views of infrastructure, applications, information and business are challenged by customer intelligence.
"In the medium term, the challenge is that participants in this market will be competing with one another in a similar game. However, all the rules are changing and collaboration between service providers will ensure their survival in an unpredictable and ever-changing world."
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