Updating the 'Hype' cycle...

I spend quite a bit of time watching various technology stories emerge and I've learnt that you need to develop a couple of skills if you are going to maintain both your focus and sanity.

It is very easy to believe everything that you read and soon you come to realise that:

a.   A lot of the breathlessly announced new technologies never see the light of day

b.   A lot of progress is incremental and each subsequent release brings an increasing sense of disappointment as products and services approach the boring nirvana of some kind of long term 'steady state' existence

c.   How do you pick the winners?

There are a couple of models that I have found really useful over the years, the first is Geoffrey Moore's 'Crossing the Chasm' model which helps to explain why so many products never make it beyond the early adopters and then I came across the Gartner Hype Cycle which I came across through my long term addiction to Wired magazine.

So I'm very curious to what the 2014 edition of the hype cycle contains:

The 2014 Gartner emerging technology Hype Cycle graph

The 2014 Gartner emerging technology Hype Cycle graph

 

Gartner have actually analysed over 2000 emerging technologies and placed them on this curve and they've been doing it for over 20 years so they have pretty unique depth in this space.

I love this model for several reasons, one is that it makes sorting the wheat from the chaff a lot easier, the second is that I now cynically wonder what the real purpose of a lot of announcements truly is. You know that they are usually about money, When concepts are at the 'innovative trigger' stage it can be about research grants, then attracting angel investors and venture capital, once the delightfully named 'peak of inflated expectations' is reached its often about attracting investors to an IPO or increasingly now part of a 'crowdsourcing' push this is followed by the aptly named 'trough of disillusionment' where it maybe about keeping grumpy investors or bankers on side long enough to reach the golden shores of the 'slope of enlightenment' which lead to the 'plateau of productivity' and its then our money that they're after as consumers.

So what do you think of their picks?

 

2Degrees future?

In the last 24 hours 2 stories have broken that cause me to pause and look a bit closer at 2Degrees, from a TUANZ perspective we have encouraged the competitive impact of having a 3rd mobile network and we have walked much of the journey with 2Degrees.

So here are the stories, the first is a blog post by Australian (Global?) telco commentator Paul Budde which asks a number of hard questions about 2Degrees and challenges a number of key assumptions about their performance and their future prospects.

Five years on and to a certain extent it is a bit of a wonder that the company still exists.

Most operations launched, similar to 2Degrees but in other parts of the world, have since been gobbled-up by others or have simply disappeared.

Of their one million or so customers perhaps as much as 80% are people visiting the country, many only for a few weeks or months.

if the country believes it is in the national interest to have effective competition in the mobile market the only way to achieve that is to change the market structure through regulatory intervention.

Over all the years we have discussed these issues nothing has happened at a regulatory level to improve the market structure in New Zealand, and this would indicate that it is most unlikely the government will step in any time soon to address the situation. That being the case, it is with considerable certainty that we predict very little future for 2Degrees, and this is a very sad story indeed – from the perspective of economic development, competition and jobs.
— Paul Budde - Buddeblog

The second story broke in this morning's edition of industry newsletter TechDay about Indonesia's largest telco being about to buy a 27% stake in 2Degrees as the second largest shareholder in 2Degrees after Trilogy Partners looks to sell out.

Indonesia’s largest telco is reportedly about to buy a 27% stake in 2degrees.

Earlier this week, Syarif Syarial Ahmad, the chief executive of Telekomunikasi Indonesia International, or Telin – a subisidiary of Telekomunikasi Indonesia, or Telkom – was reported in Indonesian media as saying the company was negotiating with an unnamed New Zealand telecommunications operator.

Sources within 2degrees have confirmed to Techday that the Kiwi telco is in negotiations with Telin and Telkom.

Meanwhile, Netherlands-based Tresbrit BV owns 27.07% of 2degrees, according to Companies Office Records, sparking speculation that it could be the party exiting 2degrees. Tresbit took over the shares of UK-based Communications Ventures Partners in 2011.

Speculation has been running high for a while that 2degrees was likely to be sold. The company was a late entrant to the Kiwi mobile market, entering a market that was a duopoly between Telecom – now Spark – and Vodafone, and despite some positive inroads, has largely struggled to compete alongside the two, much larger players.

— Techday NZ

 

Read together both stories are in sharp contrast to the quite celebratory piece that appeared in the print edition of last weeks NBR, its not online but I've got a scan of the articles here. and here.

This is a story that is going to develop so I'm not going to speculate much further about what's happening at 2Degrees, what I want to quickly reflect on is what this means for our overall market structure and system.

There have been 2 really big telco issues this parliamentary term beyond those set in train by the 2011 Telco Act (ie UFB, RBI, Copper Wars & the Chorus Crisis) and they have been the Vodafone purchase of Telstra Clear and the 700Mhz spectrum auction.

In both cases we have seen light handed approaches from the political and official realms often citing the success of 2Degrees as proof of a robust competitive market. The Vodafone / Telstra Clear deal has created a seriously capable, vertically integrated telco with no regulatory constraints or oversight and the spectrum auction again has taken the cash over the wider needs for a balanced mobile market moving forward.

There are additional issues around the long term success of the Maori spectrum and subsequent investment in 2Degrees. 

Personally I've been a 2Degrees customer for the last 5 years and I want to see them prosper, we need agile and innovative challengers, I hope the new investor shares this desire.

Onto RBI 2.0...

Well I've had a night to sleep on yesterday's announcement and I'm still pretty excited, its a clever piece of policy work, by extending the TDL (Telecommunications Development Levy - successor to the much derided TSO) the Government has given itself an extra $150 Million to play with that is fiscally neutral (I think they'll be hoping that the Telco's paying the TDL won't notice that they're going to keep paying a wee bit longer.

Politically its very smart as it does 3 things, firstly it gazzumps Labour's $9.6 million contestable fund for very similar rural initiatives, secondly it deals with genuine heartland concern about broadband and mobile coverage and finally it is actually quite ambitious for rural New Zealand.

To be really successful it needs a target and I think it needs to be an ambitious target - funding projects that will have the capability within 10 years to deliver 1 gigabit/second to rural New Zealand.

Thats not a pipe dream. it can be done today with 2 technologies fibre and point to point wireless and by 2024 5G should be gigabit capable as well. 

As a former rural New Zealander (I'm just currently an economic exile in #gigatownporirua) one thing that really pisses me off is hearing that old technology is good enough for country folk. Its up there with the now 30 year old refrain about farming being a sunset industry, I'm glad its such a long sunset as without the 'white gold' boom we would be in a far worse position.

Farming is developing into a very sophisticated data intensive business, it is the starting point for the worlds food based supply chain and consumers increasing demand for more detail about their food & where it comes from. But not only that, rural New Zealanders are entitled to all the good stuff that comes with ultra fast internet, tomorrow see's the launch of Spark's 'Lightbox' service and I'm sure plenty of rural Kiwi's are up for a bit of 'Global mode' too.

The devil as they say is in the detail and it will be the same with yesterdays announcement, there are many questions to be asked and a lot of capacity to be rebuilt. In its first broadband schemes the Government favoured large monolithic structures run by contract, in fact it believed that contracts would work better than regulation.

Councils and small regional operators were sidelined by both the UFB and the RBI and massive waste and overbuild has occurred, the situation in Palmerston North is a prime example where pioneering work was done by James Watts and his team at inspire.net and he had an effective partnership going with the Palmerston North City Council, James was even running fibre to the farm 7 years ago.

Now the Government recognises that local is often best and will need to re-engage players who still have much to offer. This will require both sides to re-establish dormant relationships and a number of plans can be dusted off and updated.

Who will run the new scheme? is it best suited to MBIE or could it function out of CFH with an expanded mandate? Nearly all of the old team at MED who used to run these projects have moved on or retired.

I think it could well take several years to get back in shape for this challenge, the current RBI advisory structure needs to be revisited and updated to provide genuine governance and oversight.

We also need to make sure that it remains consistent with our market structure, that is that new access networks are structurally separated and open access and the the correct regulatory settings are applied.

I'll leave with the insights I've just gained from the engineer behind the very successful Northpower fibre rollout. 

Our beyond UFB plan is to roll gigabit capable fibre out to all our electricity subscribers within 10 years, the GPON technology we use can reach out 30km and we can push it further if needed.
— Graham Dawson - Northpower


$150 Million Boost for Rural Broadband & Connectivity

This afternoon the Government announced additional funding for rural broadband and connectivity, the detail is here:

https://www.national.org.nz/news/news/media-releases/detail/2014/08/26/$150-million-boost-for-rural-broadband-initiative

National’s Communications and Information Technology spokeswoman, Amy Adams, today announced a re-elected National-led Government will establish a new $150 million fund to extend the Rural Broadband Initiative (RBI).

Ms Adams made the announcement in Greymouth with Prime Minister and National Party Leader John Key.

“The RBI is making an immense difference to the way our rural firms do business, the way our kids learn and the way our health services deliver to us as patients,” Ms Adams says.

“Already, nearly 250,000 households and businesses have access to faster broadband under the RBI. However, National wants to see more rural homes and businesses benefit from faster, more reliable internet.

“Therefore, if re-elected, we will legislate a three-year extension of the current Telecommunications Development Levy of $50 million a year to create a new $150 million extension of the Rural Broadband Initiative. The levy is currently set at $50 million a year until June 2016, and will now be extended at $50 million a year until June 2019.

“Of that $150 million, National will make $100 million available through a contestable fund for communities to improve their connectivity through fixed broadband to homes and businesses. We expect communities, councils and service providers will bid into the fund.

“The criteria for the fund will focus on enhancing connectivity across areas outside the Ultra-Fast Broadband footprint.

“This extension will mean a greater number of rural New Zealanders will be able to improve their connectivity.”

In addition to improving broadband in rural areas, National will also create a $50 million fund to extend mobile coverage in the more remote parts of New Zealand, and fill black spots on main highways and in key tourist areas. 

“State Highway 6, which runs along a significant proportion of the West Coast, would be a top candidate for this fund. So would State Highway 73, the main route between Christchurch and the West Coast. Both are major tourist routes and improvements to mobile coverage would be welcome,” says Ms Adams.

“Mobile phone coverage is an essential form of connectivity, and can be even more important in our rural and remote towns, where it has benefits from a public safety perspective.

“Boosting mobile phone coverage also has the ability to help grow productivity in our regions.

“Today’s announcement is part of National’s programme to deliver world-class connectivity to drive innovation, create jobs and grow New Zealand’s economy.”

Ms Adams says the Telecommunications Development Levy was set up primarily to provide higher-quality broadband and internet connectivity for rural New Zealanders. The levy is paid for by large telecommunication providers.

“The levy means more New Zealanders – particularly those in rural and remote areas – can stay connected to the rest of the world. It has funded the creation of the $300 million Rural Broadband Initiative, along with other projects like the relay service for the deaf and hearing impaired.  Its extension will allow further major improvements in rural broadband to the benefit of all New Zealanders. ”

 

 

TUANZ welcomes the focus on rural connectivity, especially the $100 million contestable fund which recognises the fact that many innovative solutions are going to be needed to get serious broadband into all the places in rural NZ that really need it.

my recent travels have shown me that the RBI has yet to make a real impact and even when it is available it's is decidedly average in its performance, because it is basically delivering last decades broadband at best and often less than our innovative regional wireless ISP's have been doing for years.

The expansion of rural wireless coverage is welcome by all kiwis who use the state highway system, but it needs to be done in a way that doesn't penalise any operator, otherwise we maybe heading for a need to review how rural mobile roaming operates.

I'll blog more on this later, but I'll leave you with this thought, will this lead us to rural gigabit access within the next decade?