Friday, February 09, 2018
Back to the future?
When Racal and British Telecom launched mobile telephone networks in the UK in 1985 they were separated from the customer by Service Providers. The Economist in a leader thinks that when it comes to 5G it might be an idea to return to because the business case does not work for current networks to build multiple overlapping infrastructure.
Don't cry for Charles Dunstone...
Yesterday TalkTalk reported it's results to the City and people were not happy with what they were telling them.
The once wonder of the telecoms industry is turning into his idol Richard Branson, but not in the way he dreamed. It's only a question of time when TalkTalk is no more rather than one of if.
Dunstone has built his fortune on the spin that with him you get the best price be it Mobile phones, fixed line telephony or broadband like some spiv working the crowd in Romford Market. The problem with TalkTalk is that the customers are now not prepared to pay the actual cost of delivering fibre broadband and having seen an exodus of customers because of poor service and hacking it has had to offer contracts at below cost to keep the numbers respectable. The perfect storm has also seen it now having to fix the holes in its finances with a cash injection almost equal to 12 months income.
Since the days of FreeServe I have said that the issue with UK Broadband investment that needed to be addressed was that the Retail Price never reflected the cost of the service or offered a Return on Investment that justified major spending. The TalkTalk partners in a project to bring superfast fibre to York have got their fingers burned from working with Dunstone to the extent that don't wish to undertake anymore work with him. Dunstone thinks that because he has a large customer base someone else will provide the money. that might have worked 20 years ago but not today.
As others invest in the building of Superfast Broadband Dunstone will be on the sidelines shouting that its a rigged market and BT has failed to invest in Wholesale services that would allow him to stay in business. TalkTalk's strategy in terms of maintaining it's customer numbers means that he will invest in marketing and promotions at the expense of infrastructure and customer service which means that he will have difficulty in get those customers to pay more. Thus we are looking at decline to the point of bankruptcy nobody will buy them out of the hole they have dug for themselves.
The once wonder of the telecoms industry is turning into his idol Richard Branson, but not in the way he dreamed. It's only a question of time when TalkTalk is no more rather than one of if.
Dunstone has built his fortune on the spin that with him you get the best price be it Mobile phones, fixed line telephony or broadband like some spiv working the crowd in Romford Market. The problem with TalkTalk is that the customers are now not prepared to pay the actual cost of delivering fibre broadband and having seen an exodus of customers because of poor service and hacking it has had to offer contracts at below cost to keep the numbers respectable. The perfect storm has also seen it now having to fix the holes in its finances with a cash injection almost equal to 12 months income.
Since the days of FreeServe I have said that the issue with UK Broadband investment that needed to be addressed was that the Retail Price never reflected the cost of the service or offered a Return on Investment that justified major spending. The TalkTalk partners in a project to bring superfast fibre to York have got their fingers burned from working with Dunstone to the extent that don't wish to undertake anymore work with him. Dunstone thinks that because he has a large customer base someone else will provide the money. that might have worked 20 years ago but not today.
As others invest in the building of Superfast Broadband Dunstone will be on the sidelines shouting that its a rigged market and BT has failed to invest in Wholesale services that would allow him to stay in business. TalkTalk's strategy in terms of maintaining it's customer numbers means that he will invest in marketing and promotions at the expense of infrastructure and customer service which means that he will have difficulty in get those customers to pay more. Thus we are looking at decline to the point of bankruptcy nobody will buy them out of the hole they have dug for themselves.
Thursday, February 01, 2018
BT Broadband plans, to little to late?
Woke up this morning to CEO of BT Openreach talking on Radio 4 about the plan to accelerate his Fibre to the Premises build programme so that he has a chance of hitting 3m homes and buildings by 2020. In order to work 50% faster than it is at the moment BT will be hiring 3,000 engineers. It would seem that HR Director Kevin Brady has massive task on his hands given that candidate require very little in entry skills if this is anything to go on.
When you look at the investment made to deliver Fibre to Milton Keynes by rival CityFibre it looks like the plans of BT are not aggressive enough and by the time they have hit the 10m target the technology they are deploying is unlikely to be capable of serving needs of 5G mobile.
When you look at the investment made to deliver Fibre to Milton Keynes by rival CityFibre it looks like the plans of BT are not aggressive enough and by the time they have hit the 10m target the technology they are deploying is unlikely to be capable of serving needs of 5G mobile.
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