Thursday, January 5. 2012Adapt Or Die........John Linton ....our planet's inviolable law....for both its inhabitants and their activities. I read this: earlier this morning and thought about how Kodak used to be an icon of the NYSE. I also, I must admit, smiled wryly at the fact that a few months ago Kodak rejected Exetel's proposal to use our data services (despite having had a 'test link' with us that had delivered 100% up time at nothing less than maximum speeds for two years) on the basis that we were not a 'tier one provider'. For Kodak, a 100 year old pioneer of photography for the masses as well as innovation and delivery of commercial and military photographic services, to face extinction is sad. I don't know how many tiny/small/medium telecommunications providers have been bought out or simply shut up shop over the past five years since Telstra decided to get out of wholesaling - but it's a pretty large number. I do understand that the number of blacksmiths in Australia and around the world fell dramatically after WW1 and the demand for typewriters has disappeared along with Smith Corona, Imperial, Olivetti etc. Similarly finding a 'cut throat razor' or a petticoat hoop maker would defy the ingenuity of almost every person in everyday life. Change is omnipresent in every aspect of life. The ubiquity and constant technical/engineering development of the mobile telephone handset and the network it uses has signaled the end of wire line telephone since it was first introduced some 30 years ago and it would be a brave pundit who predicted that any wire line calls will still be made in 20 years time....don't say "fibre will ensure fixed line telephone calls are still being made" - that is a silliness that should be left to lying morons like Stupid Stephen and Juliar Faustus. The Kodak story this morning is a reminder of the fact that when it comes to technology "size" is not any form of protection - in fact it is almost certainly the reverse. It should be a reminder to the people who bleat about 'economies of scale' and 'synergies' that there is only one economy of scale that has ever worked in commerce and that is a monopoly that prevents new technologies from being introduced that disturb the cosy current arrangements. Economy of scale in producing photographic film worked just fine until the 'invention of the digital camera and then its inclusion in a mobile telephone hand set - after that all your film making manufacturing and processing facilities and distribution outlets around the world became so much unused real estate and redundant employees. Of course, it doesn't happen overnight and it is always clearly signaled years/decades in advance. Tragedy only happens when you choose not to see the signals and blindly blunder on doing 'what always has been done'. The current obvious example of this is the Labor government's 'NBN2' business plan that is based on wire line telephone revenue to attempt to make it look viable.In case anyone hasn't noticed the ONLY reason that copper telephone lines are still in use is that they are required to make ADSL available. Will that be the case in 10 years time? Well, no - because by then even the lowest cost wire line telephone call will be made by mobile services and a fair proportion of main stream internet usage will also use mobile devices - read the GSM road map - it has been pretty exact in its predictions for 30 years. Right now most people's wire line telephone call bill (excluding the line) has shrunk from an average of almost $30.00 a month to an average of less than $12.00 a month over a period of less than ten years Telstra has compensated for that loss of revenue by continually raising the monthly rental cost of the actual telephone line. (hands up for those of us who can remember when a Telstra telephone line rental was $10.00 a month?). Just how many benighted residential customers will not be using either VoIP or mobile (or a combination of both) to make 100% of their telephone calls by 2020? I wouldn't want to be basing a residential fibre roll out on receiving too much telephone call revenue beyond this decade. Copyright © Exetel Pty Ltd 2012
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> Just how many benighted residential customers will not be using either VoIP or mobile (or a combination of both) to make 100% of their telephone calls by 2020?
Depending on roll out dates for the NBN and LTE everyone will be using VoIP by some date possibly 2020. More interesting to me is how well (best-effort) 3rd party VoIP services will do in such an environment. The telephony services bundled with mobile and NBN offerings will make use of the underlying QOS features provided by the network and continue to charge a premium price compared to 3rd party VoIP services. It's clear that some providers will need to run higher contention ratios on the NBN than they do today, making QOS more necessary for telephony at peak periods than it is today - conveniently telephony QOS is bundled with the NBN wholesale product. While LTE will be a somewhat better platform for VoIP than HSPA is today, VoIP without QOS over mobile, will still be hit and miss as it is today. Network providers don't seem to be rushing to provide QOS on their networks for residential and small to medium business customers so if one wants good telephony quality all the time one will need to use the bundled services (or at least callback type services which have a cost disadvantage compared to pure VoIP). Moral of the story, one needs to pay for QOS one way or the other. Designed differently, the NBN could have eliminated the need for VSPs for on NBN calls. None of this matters for customers with high enough calling volumes who will always be able to receive the best deals for whatever technology they are using, but lower volume customers will have to live with ever increasing minimum costs. > I wouldn't want to be basing a residential fibre roll out on receiving too much telephone call revenue beyond this decade. I don't know that anyone is, but the NBN and Telstra are relying on the revenues that comes from mandatory bundled line rental rather than simply raising the cost of wholesale internet access. However, I wouldn't want to be a single play VSP provider in that world. It is clear that double and triple play providers will do best in a post-NBN world unless NBN telephony and multicast can somehow be unbundled - which is a pity since we will be eliminating some low cost efficient providers and reducing competition. Comment (1)
I have been using VoIPon my mobile for a long time now and Exetel as a company has solely used VoIP to operate its business for over four years - we have no ISDN nor PSTN lines except for engineering testing in either our North Sydney or Colombo offices.
Will the mobile infrastructures continue to support VoIP as well as they do now into the future? I wouldn't know but I don't see any reason why not. The NBN business plan is quite clearly based on achieving telephone call revenue. Comments (5)
How I love that phrase, "not a Tier 1 provider".
Unless they've subsequently sourced connectivity from one of Verizon, NTT or Tata (the only Tier 1 carriers who operate here in any meaningful way), then they've got no idea what Tier 1 means. And if they have sourced connectivity from any of these providers, there's next-to-zero chance that they're using said provider's own infrastructure for carriage given the extremely limited fibre networks those companies have here in Australia. Comments (2)
It remains something that is going to need to be continually addressed (Kodak had a 50 mbps link from us for two years that performed faultlessly) and is not going to be easy.
It really doesn't matter that much but we will need to become more careful about how we spend our time - we need to stop wasting it putting bids into companies that will never buy from us. Comments (5)
And to think, I was called by staff at Kodak to give a testimonial for Exetel's services in 2011.
The fact that such decisions are so drawn out yet come to some strange conclusion based on perception derived from a lack of understanding of the domestic carrier market is really quite concerning. Comments (2)
Chris,
Thank you for your help anyway - Perhaps part of Kodak's problems are caused by lazy Kodak executives paying far too much for basic services? Comments (5)
It was your Blog which stopped the sharks moving in - well done!
http://forums.whirlpool.net.au/forum/index.cfm?action=reply&r=32530099 Understand was the lessor of two evils but keep in mind, current Copyright laws holds back development of growth of humanity. Nothing released since 1923 has been released to the "free" domain. This means film simply rots in canisters and can never be recovered. Keep up the good work you are doing. Comments (2)
Apologies,http://forums.whirlpool.net.au/forum-replies.cfm?t=1785961&p=93#r1855.
For the full explanation of how Copyright effects growth http://www.authorama.com/free-culture-1.html - a big read but worth the effort Comments (2)
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