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Tipping Point of the ICT Industry -- ITU Telecom Comes to Asia [23.01.07]

Malcolm Gladwell’s bestseller “The Tipping Point” unveils the secrets behind the “social epidemics” of change, when a simple factor might instigate a wave of volcanic change.  What is that “tipping point” for the ICT industry?  What made it tick again? Is it the gargantuan technology and product offering, oiled by mushrooming advertising billboards, banners and SMSs? Or is it the other way around? What can and should technology do to decrease an enormous digital divide between “gold billion” and developing economies?

We’re Living in a Digital World

“We’re living in a digital world”, proclaimed ITU as a major theme of 2006.  We must embrace the “Thumb Generation” crowd, omni potent broadband connections and struggling technologies for every single user’s attention.  The future of voice lies in operators’ hands, where voice gets bundled as a mere application, without a “killer” in it.  Skype is almost a new religion, with operators falling like ancient gods from their pedestals rocked by the crowds of its admirers and menacing IP scriptures in the network universes.  In the meantime, the content’s new clothes are as old as Adam’s natural outfit.  Moguls of the content business are talking about sports and infotainment as new drivers of ARPU, while sheepishly hiding the No. 1 “killer” content that is too obvious to name, adult content.  After all, the old good practices never fail to deliver. 

Will Mobile TV actually jump out of its shell or perish under the weights of some new value preposition?  While webbing ourselves into new gadgets and technologies we must not forget that the great digital divide separates some anxiously waiting minds from presenting their best.  And undoubtedly, that was the main concern of ITU World Telecom in HK.

Top CEOs forecast the future

The ITU Telecom World event held December 4-8, 2006 in Hong Kong, brought together the globe’s biggest telecom leaders to discuss these and other issues.  The bouquet of CEOs, presidents of Fortune 500 companies, and government officials unveiled their future vision at ITU Forums.  According to Ed Zandler, CEO of Motorola, “the future is a seamless mobility, enabling people get anywhere at anytime”.  While speaking at the ITU Forum Zander emphasized that today “everything is digitized, assets get connected, people get connected, events get connected”, and “achieving seamless mobility from home to enterprise” is in fact the way to success for all telecom ecosystems.   Yet mobile does not equal the death of wireline.  Addressing fixed mobile convergence, Zander pointed out that the “wireline industry will resurge”.   In fact, the real battle is happening not on a pure technology level.  A “home is the hub where we have our content”, said Zandler, and “the real battle will be between PC and any other potential device” that might take it over. 

Echoing Zandler’s remarks, Sanjiv Ahuja, CEO of Orange said that “the industry’s experiencing a radical change”, and the mobile industry is reshaping the world as we speak, and it is happening “faster than evolution of telegraph, Internet and television.”  Most importantly, Ahuja pointed out that “the barriers between fixed and mobile are going away” and be it 2G, 3G, 4G or 5G, “our consumers are saying – don’t talk that technology alphabet soup to us, solve our need.”  

The CEO of newly branded Alcatel Lucent (AL), Patricia Russo voiced AL’s vision of the world “at the most simple and noble level we’re helping to enrich people’s lives” and the company is “driven by focus of usercentric experiences”.  Today “it’s all about VAS”, as “people want to collaborate, share the content with friends and family”.  Overall, Russo summarized that the industry’s experiencing “services transformation; network transformation; and business transformation.” 

K-H. Svanberg of Ericsson stated that while many assume that a “network becomes commodity”, in reality “it becomes a complicated technology” where a “quality factor becomes crucial” for success.  Calling his company a successful “plumber”, CISCO CEO John Chambers pointed out that “service providers have to reinvent themselves, moving from charging for calls to determining how to charge for bandwidth and services on top”.  Stating how fast the industry is changing, Chambers coined a phrase that “if you agree with all I said today you are failed”.  Chambers also had no doubts that “if there is a killer app for service providers and businesses as a whole it is video.”

Still, despite rapid industry consolidation, regulatory changes are always behind. What should regulatory authorities do to enable the industry to move ahead faster? Ahuja said that the regulatory authorities should “ keep a light touch” and not “overregulate” operators on issues which the market can solve on its own.  According to Orange’s CEO, the industry is so competitive now, there is no need for extra regulations, another barrier to its development.  Reflecting on regulatory problems, Russo said that “one of the challenges is that the regulation has to keep up with the change”.  She pointed out that in the U.S. the latest telecom regulation was adopted back in 1996, and “our world doesn’t look a bit like the world in 1996”. 

“Four billion people do not have access to the ICT industry” said Jafari of NeuStar.  “The digital divide is a symptom and the economic divide is the cause”, he insisted.  Both Motorola and AL took part in providing basic, affordable mobile phones for developing countries.  This is another proof that bridging the digital divide not only a noble task, but also is profitable. Yet, as Russo noted “without incentives no one in business will do anything”.  “There must be right economic model”, she said.  Russo said that AL invested into a cost efficiency program to create devices that are reasonably priced for developing countries, helping to remove the digital divide.

After all, the ICT industry shook off the burden of past failures and slow existence.  With courage to face new challenges it is moving to the rewarding direction – our future.