Friday, February 12, 2010

France & Australia - investment & separation

The FT reports that France Telecom is to resume investment in the country's new fibre-optic network:
"...the significance of this week's French decision to press ahead with an initial €2bn ($2.7bn) of investment in the new network extends well beyond a change of style and tone at France Telecom. It also reflects a new sense of urgency at all European telecoms operators and perhaps the need for a pan-European regulatory framework to facilitate the imminent digital revolution...Telecoms groups still flinch at the memory of the roll-out of third-generation mobile technology when vast sums were spent on new networks without the demand being there to populate them. A decade on, the world could not be more different. Smartphones, social networking, online gaming, remote working and TV over the internet are resulting in a surge in usage which risks overwhelming the infrastructure.

France Telecom has certainly been wise to step out of what was becoming a perpetually escalating conflict with its domestic regulatory authorities and its competitors - a conflict that was increasingly irritating its most important shareholder, the French government. But as much as anything, the decision is an exercise in enlightened self-interest. For even in France, where the network is recognised as one of the more robust in Europe, there is no time to waste in preparing for an all too predictable explosion of usage."
...unless you're in the UK it seems. Australia, on the other hand, currently faces a different issue, in relation to the future of Telstra, the incumbent telco. Also from the FT:
"Telstra is in the middle of regulatory upheaval after Canberra warned last year that unless the telecoms group separated its retail and wholesale businesses its ability to expand wireless broadband operations would be curtailed. Canberra is working on a public-private initiative to create an ambitious A$43bn nationwide broadband network (NBN) and wants Telstra to fold parts of its existing network into the proposed venture. However, talks on compensation to Telstra and the new regulatory environment have been drawn out."
The BBC also reported on this issue last year:
"Telstra is being asked to split its retail operations from its wholesale network. The government says this would help in the roll-out of a national broadband network worth A$43bn ($30bn, £20.9bn). The government has been warning of a major regulatory shakeup of the telcoms industry...Telstra was a state-owned monopoly before it went mostly private in 2006. It owns the country's aging copper telecommunications network. This could be made redundant as the government pursues its plan for super-fast broadband across the country. Roll-out of this new network would go faster if existing telecommunications providers folded into it."
...sounds familiar, but we don't have a venture to fold anything into, unfortunately...

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