Telecomms a state of mind

Sometimes it's hard to tell from the inside, but I think we're in the middle of a clash of cultures and technologies that's going to end in tears.

Sometimes it's hard to tell from the inside, but I think we're in the middle of a clash of cultures and technologies that's going to end in tears.

The only real question I see is: who's going to be crying their eyes out and who's going to be crying all the way to the bank?

Telecommunications had a charmed life for many years. The idea of a 10-year business plan with a steady growth chart and customers willing to pay for voice calls based on the distance between callers was all but cast in stone. Telcos could plan for capacity growth in a staid and conservative manner. There were no sudden leaps or shifts that would endanger their business model and most telcos were run at this plodding pace by national governments who were happy to have customers wait for weeks before getting a phone connected. A waiting list for a phone connection -- can you imagine it? I remember mum and dad pulling the "We're medics and need a phone so bump us up the list" line on more than one occasion.

But the trend toward government sticking to core business (can any tell me what that is?) took hold, and before we knew it they'd flogged off the whole thing -- network, hardware, people, the lot.

Just in time too. Can you imagine the old Post Office trying to cope with the internet? ISPs queueing up to get lines for tens of thousands of customers at a time, waiting lists from here to eternity, debate raging in the nicotine-stained corridors about why it makes sense to avoid the 33.6kbit/s modem speed in favour of a locally developed 28.2kbit/s or some such nonsense.

Instead we've got incumbent telcos around the world struggling to cope with the sudden realisation that their one real product is bandwidth and that theirs is no different to anyone else's. The network operators have been shoved kicking and screaming in some cases into the future they never imagined where "calls" have become "connections" and customers don't worry about dialling an international phone number but want to set up their own virtual private network connection to the office so that they can play games over their lunch breaks.

The internet, as we all know, runs on a packet-based network while the old network operators come from a circuit switched tradition, and some are less than thrilled at making the, er, switch. Telecom has announced it will be moving to an all-IP network just as fast as Alcatel can build it, but it's more than just changing the technology. It's about changing the culture. It's as much a move away from the billing cycles of old to the internet billing model, and that may be a larger leap to make.

The old way makes Telecom a lot of money, so it's reluctant to cannibalise its own customer base as long as there are companies out there still willing and able to do business using a leased line that costs thousands of dollars a month instead of the hundreds of dollars a month of DSL. That's fair enough -- the CEO wasn't hired to reduce income and lower expectations for the shareholders. Her job is to maximise the return on investment, so until Telecom has to shift its charging model, it won't.

But I think Telecom has to move quickly if it wants to avoid getting caught when it has to wholesale its network to competitors who will offer just that kind of pricing model.

The circuit-based way of thinking will have to give way to the new packet-switched simply because of sheer volume of demand. The everything-is-data approach of voice over IP (VoIP) is far more mature than Telecom would have you believe and there are a number of companies happily avoiding toll call charges altogether.

It's telling that Telecom got the government to include VoIP as one of the exclusions in the newly defined Telecommunications Share Obligation (TSO) for dial-up customers. It's still fighting that rear-guard action as the world moves on. Imagine if Telecom were to turn around and start being aggressively progressive instead. This might mean DSL to all and sundry as a starting point instead of the top-of-the-range product; a world-class broadband initiative that put us top of the rankings instead of struggling to make it back into the middle ground.

Telecom would gain a slightly smaller slice of the action, but the pie itself would be larger. Then perhaps we would have a better chance of harnessing IT and telecomms to really compete against other countries.

Brislen is IDGNet’s reporter. Send letters for publication in Computerworld to Computerworld Letters.

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