40% of telcos to vanish soon, analyst says

Telecommunications companies won't exist in their current form at the end of the decade; rather, they will look like an IBM or a Hewlett-Packard, according to Australian analyst Paul Budde.

          Telecommunications companies won't exist in their current form at the end of the decade; rather, they will look like an IBM or a Hewlett-Packard, according to Australian telecommunications analyst Paul Budde.

          Speaking at the ATUG (Australian Telecommunications Users Group) New South Wales (state) November 2000 meeting, Budde estimated that 40 percent of all telcos would disappear within the next five to eight years.

          "It could include an AT&T or a Telstra. In the next three years we will start seeing the winners and the losers. I see the next three years as vital as we will start seeing profits go down and the financial market will demand structural changes."

          Budde said the telecommunications industry is typically just an information technology and telecommunications (IT&T) industry.

          "And if telcos don't change into IT companies they won't exist any more. I see telcos as business partners rather than technology partners in the future," he said.

          Budde believes that the industry is "bogged down" in mobile at the moment and should be focusing all efforts towards broadband.

          "Mobile is just another narrowband service -- forget about 3G and m-commerce, these are just peanuts," Budde said.

          "Less than 20% of all e-commerce by the end of this decade will be on mobiles. There will be room for m-commerce, but it will not be the sort of thing the Ericssons, Nokias and other mobile operators would like us to believe now."

          However, access to broadband is scheduled to be severely limited in the near future for Australian users.

          Budde said Telstra is forecasting 650,000 Asymmetric Digital Subscriber Line (ADSL) users by the year 2005. This would put Australia three years behind the rest of the world, he said, instead of leaders with the Internet as we were in 1996, "if Telstra gets its way."

          "If you compare Australia with Holland, which has a population of 16 million people, by the end of 2001 they will have 500,000 broadband users. People should revolt against Telstra's predictions," Budde said.

          "We are a country that would profit far more than any other from the e-economy. We are far away, we have a fantastic lifestyle and people can live here while doing work for a company in Europe (if we have enough broadband access)."

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