Business Spectator 18 October 2012

Australia’s telecoms landscape is undergoing a significant change as the fibre revolution swings into action but what will Australia's premier ICT provider Telstra look like in 2020?

Some might hope that Telstra will be a smaller company than it is now; a few might even hope that Telstra no longer exists. It's likely that both groups will be disappointed when 2020 rolls around to find Telstra still holding on to the number one spot. However, for that to happen the telco will have to negotiate a few bumps in the road along the way, caused not by competition but by some of the underlying internal structural issues that Telstra has yet to resolve.

By the end of this decade the information revolution will be at a higher plateau and the rapid rate of change in the ICT marketplace would still be underway. There will be industry winners and losers and it is likely that there will be one high profile casualty in Australia – Vodafone, in part because of Vodafone’s poor performance which has hurt the Vodafone brand but also because of Vodafone’s failure to move beyond being principally a mobile cellular provider.

Telstra in 2020

By 2020, Telstra will have completed an upgrade of its mobile network to the “Next 4G” network (LTE-Advanced) which would be fully ITU-T IMT-Advanced compliant. Customers will be experiencing download speeds of just over 100 Mbps and the range of services available over the Telstra mobile network continue to dwarf alternate mobile offerings.

There will also be a couple of other advancements along the way. Here’s one possible scenario.

In 2016, Telstra releases the Telstra “Car-T-Box” which integrates the customer’s car into the Telstra network using either Wi-Fi or the Next G network and provides customers with triple play (movies, telephone and Internet) as they drive around within the Telstra network footprint. The Car-T-Box will be software upgradeable to ensure it is compliant with the introduction of the Telstra integrated Wi-Fi capability. It will automatically connect to the Telstra T-Box when in Wi-Fi range or over the Next G network and permit customers to download movies and music to their cars.

The ITU-T IMT-Advanced feature set promises Wi-Fi integration and facilitates seamless mobile handover to Telstra integrated Wi-Fi networks. By this time Telstra has entered into Wi-Fi infrastructure agreements with fast food outlets, shopping centres, airports, sporting facilities and so on.

By 2017, Telstra has rolled out 50,000 IMT-Advanced compliant Wi-Fi access points at approximately 6500 venues around Australia.

By 2018, over four million cars are fitted with the Telstra Car-T-Box and in early 2020 four out of five vehicles on Australian roads were fitted with the Telstra Car-T-Box making it Telstra’s third most successful product of all time.

This is just one of many possible pathways that Telstra can take to maintain its market dominance.

Leaving the silos behind

By 2020, Telstra will have moved from a silo based organisation, where every product is managed and operated separately, to a customer focused organisation.

Customers will be able to view and manage every aspect of their interaction with Telstra through the customer portals. They will also be able to add, change and remove services through the portal and then view the internal Telstra processes of making the service changes in real-time. A call to Telstra will be to a person who has access to all of Telstra’s products and services and can carry out every aspect of customer support without having to forward the customer to another call centre.

As things stand now, Telstra is still  on a long road to identifying and rectifying the many anomalies brought about by being a silo based organisation. Current gems include:

• Telstra Business ADSL customers do not have access to Telstra Bigpond yet residential customers connected to the same DSLAM pay the same amount as the business customer, get more downloads and have access to Telstra Bigpond. 
• Telstra business mobile customers can have data share plans yet Telstra business mobile customers cannot share data with their family members who also have mobiles and tablets on the Telstra network.

That's two in a long  list of anomalies that will most likely be reported in 2020 by an interested historian to have been longer than a ball of string.

NBN delivery a big hit  

By 2020, Telstra will report that the delivery of service offerings through the NBN has been a major success story. This success will be anchored by an aggressive campaign to grow the number of services available to customers over the NBN, a process that should start next year.

This process will also be instrumental in ensuring that Telstra Bigpond’s dominance prior to the NBN is not affected as the network is rolled out – in fact Telstra will hope that Bigpond’s subsequent growth will reduce the influence of smaller ISPs.

The separation of Telstra’s wholesale and retail arms has been one of the driving forces behind the NBN and the future of the telco’s wholesale arm could be dictated by a move away from reselling fixed, backhaul, international and other infrastructure access to include wholesale service provision.

This new direction will be based on realising the growth potential of the surge in specialised service providers entering the market and wishing to gain access to customers by piggybacking onto Telstra’s bundled products.

It’s likely that Telstra will negotiate exclusive license agreements with specialised service providers and begin offering the services to Telstra and non-Telstra customers through the wholesale division.

Another potential growth area for Telstra’s wholesale division will be the growth of customer choice products. As part of Telstra’s new customer focus mantra, customers will be permitted to request services offered by Telstra’s competitors and vice versa. Customers will have the ability to request access to services offered by companies within Australia or overseas. Some potential scenarios may include, Telstra offering AFL football coverage to non-Telstra customer’s mobile devices or permitting  customers to request access to the Optus library of old movies – secured by Optus under license from Google.

The separation of Telstra’s wholesale and retail arms will change the landscape, improve competition (partly due to the NBN effect) and ultimately contribute to Telstra becoming Australia’s premier ICT customer focused organisation.

So what will Telstra look like in 2020? Well, it will still be the biggest player in town but the overall size of the ICT market will easily be three times the size it is now. Most importantly, customers will have more choice from a larger number of service providers, greater satisfaction and the benefits of the fibre revolution will be there for all to see. 

Mark Gregory is a Senior Lecturer in Electrical and Computer Engineering at RMIT University