2007: Let the crystal ball gazing begin

commentary Trying to predict the future of the Australian telecommunications industry always seems like an exercise in futility.

Renai LeMay, ZDNet Australia The pace of technological change alone ensures that today's hot property can quickly fade away into just a fond memory.

For example, to those of us who have been using the Internet to place voice calls at no charge for some time, the traditional telephony network certainly falls under this category.

And then there's the extremely dynamic business environment, which can see significant new players flourish and die with equal rapidity. Can anyone say "One.Tel"?

Yet perhaps it is human to wonder, as each year ends and becomes a new one, what that new annum will bring.

In your writer's opinion, the year ahead will be characterised by a continuation of heightened tensions between the nation's former monopoly telco Telstra, the competition regulator and the federal government.

According to an article published in the Australian Financial Review this morning, Telstra's campaign against regulatory constrictions may even result in a High Court challenge to the Australian Competition and Consumer Commission under constitutional law.

Although Telstra's antics will grab headlines, behind the scenes the rest of the industry will continue to quietly build out its own next-generation fixed and wireless infrastructure to challenge Telstra's dominance.

Players like Optus, iiNet, Vodafone, Hutchison, Internode, PowerTel, Macquarie Telecom, Unwired, Commander and more will continue to put infrastructure out there to provide additional facilities-based competition in the market.

2007 might see significant consolidation among the ranks of these players, but odds are it won't.

The larger telcos with cash to burn seem to have been looking recently to diversify their offerings rather than simply buying customers with large acquisitions in their home territory.

Examples of this behaviour include the Alphawest and Volante buys that respectively gave Optus and Commander bigger, pure IT systems integration assets.

However, big question marks remain over Telecom New Zealand's troubled subsidiary AAPT, as well as upstart telco iiNet, which has been playing it safe since a sharp profit downgrade early last year.

With the big picture out of the way, now we can get down to the nitty-gritty details of which technologies will be hot and which will flop in 2007.

Hot:

  • Broadband: The entrance of HSDPA wireless and new wholesale ADSL2+ options will push broadband adoption to new highs.
  • Voice over Internet Protocol: The adoption of VoIP by both consumers and enterprises will accelerate -- particularly as more ISPs start to bundle it with broadband to consumers.
  • Mobile data: 3G pioneer Hutchison has already proved customers want to access data through their mobile phone -- now the other carriers are following the money.

Flop:

  • Video on demand: As with music, most consumers won't start to buy video online until an innovator like Apple makes it easier to do.
  • WiMAX: Large-scale WiMAX rollouts will fail to gain traction as they face competition from entrenched mobile broadband plays such as Telstra's nation-wide Next G network.
  • Fibre to the node: Regulatory difficulties will ensure neither of the two fibre to the node proposals floated by Telstra and its rivals will get off the ground.

2007 -- do you agree with my predictions or not? Drop me a line with your opinion at renai.lemay@zdnet.com.au or post your thoughts below.

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Talkback 19 comments

    Broadband Connect Anonymous -- 18/01/07

    One thing you fail to consider in development of genuine alternative to the incumbent is the billion dollar program to fund an national broadband solution.

    I would think the outcome of those tenders would have a great bearing on the broadband technology to emerge in 2007 (eg. AUSAlliance)

    Wrong about WiMAX Scott Ensor -- 18/01/07

    You bring up some valid observations. If history is any great indicator, and we all know it is, then we can expect nothing from the industry in Australia in the near future. I do like to think you are wrong about WiMAX though. It's been a long while since I have been excited about a technological advance like this. After all the letdowns - if they can come through on WiMAX, I am willing to forget history.

    wimax Anonymous -- 18/01/07 (in reply to #320073203)

    I agree there is a lot of inertia worldwide wimax will be to the internet what gsm was to the phone

    Hot - ADSL2+ in 2007 Anonymous -- 18/01/07

    It was HOT back in 2005 when it was released, 2 years later it is warm.

    adsl2 totally hot Anonymous -- 18/01/07 (in reply to #320073218)

    "It is HOT in 2006, now it is STILL HOT."

    Hey Renai Anonymous -- 18/01/07

    Has anyone ever told you that you resemble 'Finch' from American Pie?

    Hey Renai... Anonymous -- 24/01/07 (in reply to #320073241)

    I'd say a cross between Finch and The Sherminator. A girl can only dream...

    Hey Renai nick chu -- 24/01/07 (in reply to #320073566)

    What about Francis Foo. She reminds me a bit of Stifler's mom.
    but seriously. love your work Renai
    ignore these ignoramuses

    Hey Renai Anonymous -- 24/01/07 (in reply to #320073567)

    pfft nick, I think you've overlooked Ella Morton's milf qualities.

    Telstra to Trump the rest. Sydney Lawrence -- 18/01/07

    If you want a world class high speed fast fibre network of which Australia can be proud step out of the way and let Telstra do the job. How many second rate telcos will be after a share of Coonan's (the taxpayers) 600 million just to stay alive.

    I dont want to pay thru the nose with Telstra owning everything Anonymous -- 19/01/07 (in reply to #320073260)

    back to the days of monopoly- give me a break. everyone knows that its more efficient for one company to own and manage everything but it comes at a cost of higher prices down the track!!! If there was no competition- at what price would telecommunication be in Australia!!!!!

    Its a trade off of short term and long term efficiency

    adsl 2 - I wouldn't mind it ! Anonymous -- 18/01/07

    But Ashgrove, Brisbane, Queensland doesn't have it ! ! !
    : (

    Telstra no Trump the rest Anonymous -- 18/01/07

    Just correcting a spelling mistake.

    What good is ADSL2+ if you can't get ADSL1? alex marchard -- 19/01/07

    Thanks to Telstra many residents only 20min west of Melbourne's CBD can't get any kind of wired broadband.
    Yet, they keep talking about faster speeds and new technologies. How about they fix up those areas that they conveniently keep ignoring?

    That's the way a commercial entity operates Martin Hamilton -- 27/01/07 (in reply to #320073298)

    Unfortunately, they will service an area from which they can get a return on their investment in the infrastructure, in other words, it seems your area is not profitable. Though they might make wired broadband available in that area if they can get government funding for it.

    Now who was it who made Telstra a commercial entity?

    why... Anonymous -- 23/01/07

    Why has your opinion of Video on Demand changed from July?
    http://www.zdnet.com.au/news/communications/soa/iiNet_opens_the_broadband_floodgates/0,130061791,139259007,00.htm

    Video on demand Renai LeMay -- 24/01/07 (in reply to #320073505)

    hi there,

    my opinion has changed because no really credible or attractive video on demand services have launched yet. Six months ago they were threatening to.

    Kind regards,

    Renai

    Wifi woes Anonymous -- 23/01/07

    I had this problem, here in Sydney. So they sold me a nifty little antenna to velcro to my laptop. that is why they do this, to sell them to you. at $30 a pop its a good deal. Wish I could think of a business model like this.

    What good is ADSL2+ if you can't get ADSL1? Bill Caelli -- 24/01/07

    Spot on!!
    Tell Sol - Tell Optus - Tell any vendor - BUT most importantly tell your local Federal Government politician!!

    Even the Australian Financial Review some time ago reported on a better telecoms policy that clearly separated the base carrier network (the "roads") from the value added services (the "cars" and "trucks"). As a large developed and modern nation of 23 million people, simple "market forces" just DO NOT WORK in this vital, critical infrastructure area.

    As a Telecom/Telstra RIM/Pair Gain VICTIM from the era of another American CEO (Blount) I am sending in this note at around 40Kbits/sec MAX. And all that Telstra countrywide is offering is - wait for it - a satellite connection at 800Kbits/sec (wow!!!) for over $400 per month.

    Oh - by the way - like others on this stream - I am only just a little West of the Gold Coast in Queensland. (Hon David Jull's - Liberal - electorate and congratulations to him for clearly pointing out the ridiculous situation for a nation such as Australia in the 21st century in his latest electorate newsletter !! Oops - he is the government!)

    BUT - what's the remedy - wait for the long term Coonan plan?? At Internet speed, many centuries will pass before anything happens!

    Question:
    1. Just how many Internet users are stuck with dial-up only nowadays? (Forget using NextG etc in your home server at their prices - even if it is available.)

    2. Just how much pair-gain is really installed in this nation?

    3. Has Telstra stopped installing more of it - and more RIMs? Just how many RIM boxes are really out there limiting broadband service (forget what they say about an exchange being ADSL2+ enabled if you are connected via a RIM box)
    PS: DCITA should have all these figures to form any real policy platforms.

    4. What is the Rudd opposition's plan in this vital and urgent area?

    At least I don't have to worry about "YouTube", "Second Life" or anything else - forget them on dial-up.... but more worrying - try keeping up with patches, virus signature updates and the like at these speeds - a REAL SECURITY concern - and - yes - the new "web services" applications emerging globally are being created with the overriding assumption that ALL users are connected to their servers at real BROADBAND speed.

    For a real broadband-backward Australia - that's a recipe for a true mess!

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