Skip to main content

Assessing Telco Strategic Foresight Abilities

Recently U.S. carrier AT&T announced that it's DSL-based U-verse IPTV service had hit the 18,000 subscriber mark, with a current run rate of about 2,000 new subscribers a week.

According to Pyramid Research, the announcement gave way to the now inevitable comparisons against Verizon's fiber-to-the-home (FTTH) deployments. Verizon will spend $18 billion between 2004 and 2010 to fully deploy its FiOS service. By contrast, AT&T plans to spend $5 billion on rolling out a lower investment architecture built around "fiber to the node" and ADSL.

The notoriously short-sighted U.S. stock market investor has appeared to prefer AT&T's plan -- financially, it is more conservative than Verizon's push, and its payback period is much shorter. In contrast, according to Pyramid's assessment, in this high-stakes game Verizon's FiOS bet is the least risky of the two.

However, I believe that Pyramid's comparison of the Western European market is without merit. It's apparent that an open free-market approach to incumbent infrastructure utilization has given carriers in the region a sustainable business and technology advantage -- when compared to the closed duopoly of the relatively under-regulated U.S. market.

Therefore, it's my opinion that the lack of a decisive U.S. policy means that continued NGN global leadership from the Asia-Pacific and European markets is virtually assured.

Pyramid's analysis summary includes:

- Verizon's and AT&T's fiber rollouts are two antithetic bets on the evolution of broadband supply and demand. Verizon is taking a risk that is primarily financial; AT&T is taking a risk that is primarily strategic.

-
AT&T's bet is the riskiest, because the long-term strategic and financial consequences of being wrong are much greater.

-
The Verizon vs. AT&T contrast also makes for an interesting juxtaposition with what is happening in Europe. What was the basis of Western Europe's strong broadband growth over the past few years, local loop unbundling and increased competition, will be the source of its falling behind in the next-generation network (NGN) era.

Popular posts from this blog

$4 Trillion Digital Transformation Upswing

As a C-suite leader, you're constantly bombarded with investment opportunities. In today's large enterprise arena, few initiatives hold the same potential as Digital Transformation (DX). Yet, securing ongoing buy-in from the board and other key stakeholders hinges on a clear understanding of market momentum and the return on investment that DX promises.  A recent IDC worldwide market study sheds valuable light on this critical topic. Let's delve into some key takeaways and explore what they mean for your organization's tech strategy. Digital Transformation Market Development The IDC study describes a market surging toward investment adoption maturity. Worldwide spending on DX technologies is forecast to reach $4 trillion by 2027, reflecting a compound annual growth rate (CAGR) of 16.2 percent. This exponential growth signifies an opportunity for industry leaders to leverage digital business tools and strategies to gain a competitive edge, with Artificial Intelligence (A