Telco networks underpin digital comms

Media companies muscle into the market

In 2008, telco networks will underpin digital communication, the credit crunch will drive Asia/Pacific acquisition of global telcos, and the mobile GPS industry will undergo rapid transformation according to Ian McCall, lead telecommunications partner for Deloitte's technology, media & telecommunications industry group.

Ian McCall commented: "Most of the contention in our previous telecommunication predictions has been around which protocols and technologies will set the scene for the foreseeable future. These issues have now faded as we enter the era of true convergence, where digital content is ubiquitous and the platform debates are of less consequence.

"Though there will continue to be skirmishes on the platform front, the most interesting issues facing the industry surround the emerging battle between players from the telco and media industries and the developing world and the developed. It is going to be an interesting few years of competitive tension," McCall added.

Deloitte's Telecommunications Predictions 2008 identified the underlying demand for communications, enabled by new media websites as a key trend. Though this has been encouraging, the international experience is that telecommunication companies' share of revenues from new media is disappointing.

McCall commented that telcos may consider in 2008 that they are still allowing new media companies too large a share of communications revenues. This is an area of opportunity as their networks underpin all digital communications.

"In Australia, telcos need to make a fundamental decision on how they should monetise the demand for new media," said McCall. "There are two clear strategies in the market today: those that are staying chained to their incumbency as carriage companies and those that are transitioning into media services companies." Stuart Johnston CEO of Eclipse, Deloitte's online advisory and implementation practice said that the development in technology with traditional media companies may also create opportunities for them to bypass telco's completely and deliver rich content.

"Developments such as this are bringing media companies into the competitive landscape for telcos," said Johnston. "It is important for them to identify and utilise new technology to meet consumer needs."

Len Rust is publisher of The Rust Report

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