Look forward to looking forward

Look forward to looking forward

We’re on the home stretch of a year that’s been very tough for a lot of people.

It feels like it’s been one long year of disaster, with earthquakes, Pike River and the Rena stranding reported globally, and the on-going global financial problems preying on the minds of many. But New Zealand’s had some triumphs too, and not just winning the Rugby World Cup.

It’s always easy to remember the big things, especially the bad, but in doing so we can forget the many little good things that happen every day, whether another exporter doing well, The Hobbit in production, or the kids’ team winning the first game of the season.

I’m not going to dwell on the year we’ve had as it’s better to look forward and try to work out what the next 12 months might have in store. While a year ago few, me included, would have predicted this year’s big events (with the exception of the rugby win, of course) it’s always an interesting exercise.

So, here is what I think the next year or so will bring.

Business will continue to be tough for many, and a key driver will be reducing cost.
Some, though, will see that the best way to position for competitive advantage when conditions improve is to focus on creating value with partners and suppliers, and providing it to customers.

As Andrew Carnegie put it, “Concentrate your energy, your thoughts and your capital”. With technology, and telecommunications in particular, so crucial to modern business, our industry will come under more pressure to prove to our customers that we deliver value for the investment they make.

We’ll also continue to see growth in Internet-connected mobile devices, and a growing move to data-based communication in place of voice calls. Electronic messaging and mobile data use will put pressure on telcos to look more to data plans than minutes, changing the dynamic of how they recover costs. As mobile data grows, but voice drops, they’ll need to look at how they price services that add value yet also allow for network growth and maintenance. Even virtual mobile network operators like TelstraClear will need to grapple with these thorny problems.

Much the same will occur in the fixed broadband market as customers use ever growing amounts of data. Although the cost of the technology needed to run ISPs is slowly falling, the demand for data is increasing much faster. Add increasing demand for higher data caps and lower monthly access charges and telcos are trapped in what WWII generals would recognise as the classic pincer movement. We will need to innovate to survive. And work with customers to ensure win-win partnerships.

Related to this data growth is the increasing trend towards Cloud computing. Fast access, security, and disaster recovery are all key dimensions related to this very different perspective of IT and business.

The telco market must move from operating as a technology-based commodity to a tailored service offering. That means not only telcos operating differently, but customers understanding and accepting the change. Both parties need to agree, and prove, that telecommunications is a solution and not the problem.

Related to the increasing amount of data used will, I hope, be a growing realisation that, although speed does indeed matter, content is actually more important. As New Zealand rolls out the government’s ultra-fast broadband, the question about what it will carry will finally become paramount.

Content innovation and the freedom and ability to access it will start to matter greatly. To quote Bill Gates: “The most important ‘speed’ issue is often not technical but cultural. It’s convincing everyone that the company's survival depends on everyone moving as fast as possible.” In New Zealand, we will also need to convince the government of this reality or ultra-fast broadband will just get us to the roadblocks quicker, or to the ‘not available in your region’ messages that much faster.

The downsides of content held by virtual monopolies that can charge what they like, or even prevent Kiwis from accessing it, will become increasingly apparent during 2012.

So, like 2011, the coming year will bring its trials and problems. But I’m optimistic that Kiwis will rise to the challenge, developing innovations and proposing solutions to deal with these. TelstraClear, for one, is already working on these and other issues.

I know that 2012 will be just as tough a year as this one’s been, and perhaps even tougher. I also know that adversity and diversity drive evolution and innovation and I’ve seen what my team can do when things get tough. They can and do achieve and that’s why, despite what I know is ahead, I feel good about 2012.

I hope you do, too. Have a great Christmas.

Allan Freeth
Chief Executive Officer
TelstraClear

© Scoop Media