Telecom concentrates on technology, TelstraClear on the market

Flags and runaway bicycles colour Moutter's pitch

The telecoms sector may still not be as competitive as customers might wish, but it’s rapidly converging with the IT industry, says Telecom chief operating officer Simon Moutter, and the IT industry is competitive. “That means telecommunications competition.”

Addressing the Tuanz Telecommunications Day, Moutter naturally pointed too to the areas of the pure telecoms business that are undeniably competitive, such as mobile.

He is concerned at the increasing impact of regulation on the industry now and in the future, he told his audience “I’ve never seen a market succeed through heavy regulation,” he said Vodafone had built a mobile network entirely in a free-market environment. At present, regulations are applied to “yesterday’s technology”, but it would be even more potentially distorting and “hazardous” to “regulate the future, even lightly.”

He called on the user community to “put the brakes on the regulatory bicycle.”

All this came after a rather strange opening when Moutter proclaimed himself “a New Zealander, [who] loves my family and love being part of telecommunications innovation. I care about New Zealand’s slide to mediocrity,” he proclaimed, standing beside a back-projected NZ flag.

After an exhortation to New Zealanders to “look outward” and connect with the rest of the world, he subsided to a matter-of-fact recital of current and upcoming innovations on the Telecom network – T3G third-generation mobile technology and EVDO which will provide 500 Kbit/s average bandwidth to a mobile, but “will peak around 2.4 Mbit/s if you’re close to a cellsite.

“Speed does matter; you want the same applications through your mobile devices in the airport or the coffee shop as in your office,” he said. But alongside business and access to information anywhere in the world, game-playing and taking and transmitting photographs still seem to be a strong element of Moutter's picture of the future.

TelstraClear chief Rosemary Howard contended that the Telecom-influenced idea of "broadband" as 256 Kbit/s downstream and 128 up, with the absence of full unbundling, effectively pushes the market down into residential for the near future, and to a focus on the "consumer" rather than the business market. "You can't do business videoconferencing on that bandwidth. New Zealand's productivity improvement will be impeded."

She attacked Telecom's "broadband" growth target of 250,000 users by the end of this year as unambitious - "we need 400,000 now" for anything like a critical mass of users, she suggested. Growth rates are lagging well behind countries such as the UK.

Even the spread of mobile was something of an illusion, she said. While 73% or the population uses mobiles, only 7% of the total voice minutes are on mobile, reflecting discouragingly high tariffs.

On stopping Moutter's bicycle, she said regulation can only be rolled back when the incumbent accepts wholesaling as an integral part of its business as important as retail. "[On the NZ market] we still have control by the incumbent; we've not yet really rolled regulation out, so we can hardly roll it back."

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