A new era for PTTs…

The most happening news story in the telecom industry where billions of dollars are being invested today is obviously that of the National Broadband Network in Australia. The investment is happening as a Government initiative leading to the creation of an open-access service provider (Australian NBN Co.) which turns the conventional belief that PTTs never did any country any good on its head. This is not the first Government to have gone back to the PTT era temporarily to give its citizens a jump-started communications facility – Singapore and, closer home, New Zealand too have embarked on similar initiatives, with Singapore, not surprisingly, being in the more advanced state.

NBN Co.’s charter is to provide FTTH based broadband access to over 90% of Australian homes at 100Mbps and the remaining 10% through wireless. That is over 20 million connections! NBN Co. intends to provide Ethernet based products in a wholesale model to all other telco’s who could avail of this service from one of the 200 odd points of interconnect that is being setup pan-Australia. After operating for an initial stabilization period, the Government intends to hand over the NBN Co.’s to private players through a process that is not yet fully defined.

As with Government initiatives in a multi-party or bi-party democratic setup, this is not without its share of controversies. Casting aside all the controversies, if one was to look at what this initiative portends one can see that the Australian consumer is likely to win in terms of whatever comes out of this initiative.

The availability of copious bandwidth will start getting exploited by all the service providers. World-over, bundling to get better wallet-share has been the technique used by service providers to deliver high bandwidth services to end-users. Towards this, most of the retail service providers (RSP) would start offering new services that bundle other merchandise along with telecom. RSP’s would bring these in the form of new applications and content services.

While, this would mean that the end user is likely to get a good choice of applications and content services when the RSP’s rise to the occasion, the end user is not entirely dependent on this. They could still get a good Internet experience with the kind of bandwidth that is being made available.

Of course, that may or may not mean a better Personal Computer penetration in the country; with 3G services in place, high bandwidth Internet experience is already available on wireless devices. In certain geographies, we have seen that users are happy to use their wireless personal computing device instead of a PC.

Applications that have the best earning potential would typically be those aimed at Small-Medium Businesses and the so-called, SOHO setups. To these segments, applications that provide business support and safe storage for their data would be a logical add-on if they were to get 100Mbps connectivity. This would provide a fillip to data center business in the geography leading to a slew of hosted services and potentially pave the way to a pay-as-you-use model as envisaged in SaaS/PaaS/IaaS offerings (aka Cloud Computing models).

On the home front too, with the availability of such a bandwidth, home security and entertainment services can really come up in a big way leading to the establishment of home networks and bringing in multifarious gadgets and devices into the home. The home network could also serve as the capillary network for utility computing and eventually lead to home automation.

Thus, we see that this investment in setting up an open-access network could lead to a new genre of service providers emerging who in turn would make the lifestyle of the consumer into a completely new and desirable experience.

One can conclude that PTTs as they existed in the past may have been huge white-elephants that were unable to modernize in time and ended up being anachronistic in their business approach in an era of consumerism; but if Governments were not to repeat the mistakes of the past and create PTT look-alikes with a developmental agenda, the end consumer would benefit immensely.


One thought on “A new era for PTTs…

  1. Another good article from Balaji. But I would like to differ on just one perspective. The concept of PTT providing open access network will work only in few countries. There is a sea difference between PTTs (or for that matter any PSU) of developed countries & the rest (irrespective of Emerging or not-so-emerging !)

    For eg, BSNL has been a sinking ship for quite some time – reeling under enormous debt due to mismanagement & corruption (esp in the area procurement from NE vendors – interestingly the same vendors seem to have supplied products to private CPs at a much lesser price !).

    Emerging countries may look at a model where Private CPs invest in superior access network with a strong regulatory framework that mandates UNBUNDLING, EQUAL & OPEN Access to other CPs. Such a model will be win-win for the CPs and consumers as well. Cheers.

    Btw, dont see articles from u since an year – pls do keem them coming…Cheers !

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