OXFORD, United Kingdom-Romances don’t always last forever. Mostly they decay gracefully at the close of a seemingly predetermined life cycle. Sometimes they blossom into universally admired permanent relationships. Other times they collapse suddenly and acrimoniously, leaving bitterness and recriminations.
The telecommunications and financial industries have been enjoying a period of romantic involvement. The telecommunications sector managed to retain its glamour while other industries lost their emotional appeal to investors. The fixed network sector is still a relative favorite, wooing the financial markets with a series of mega deals that owe little to trading performance but a lot to maximizing asset value. Just the sort of scenario the financial markets like.
The wireless sector has been less fortunate. The wireless sector seems to have been suddenly jilted in some quarters. Wireless operators no longer find funding easy to come by; the presence of established competition and the burden of outrageous license fees has destroyed the appeal of their business case. Wireless operators are increasingly being funded by infrastructure manufacturers, reducing the vendors’ margins and in turn destroying their appeal to the financial community.
The financial community can relate to the fundamental changes affecting the fixed network world. It’s a world that has been turned upside down by the Internet, and the Internet is still sexy and full of promise. Massive opportunities in the fixed world arise from the combination of globalization, massive demand and the need for new technologies.
The wireless world is also about globalization, massive demand and the need for new technologies. But that message has somehow not goten across. The wireless vision is nowhere to be seen.
Manufacturers are suffering. Alcatel has seen its share price plummet by almost a factor of two. L.M. Ericsson is implementing yet another massive reorganization plan. Nortel also has reorganized, dropping out of the wireless terminal market and pulling away from the radio access business following the Ionica debacle in the United Kingdom.
Lucent Technologies Inc. and Philips Electronics N.V. abandoned their wireless handset joint venture. Motorola Inc. is struggling, suffering badly from the glut in semiconductor manufacturing.
The list goes on.
The root causes are complex. Repositioning for the shift from a voice-centric to a data-centric world, from a circuit-switched to a packet-switched environment, is not an easy task for traditional telecommunications vendors. Changing the culture of the slow-moving, standards-dominated telecommunications community to encompass the rapidly changing, anarchic environment of the IT and computer worlds is even more difficult.
But the biggest challenge is to convince the financial and investment communities that wireless is still an area of unfulfilled promise. The wireless vision needs to be promoted if the romance is to come back into the industry.
Promoting visions requires visionaries. Where are they? Where are the Bill Gates and the Rupert Murdochs of telecommunications? You may not like these gentlemen or even admire what they do, but you cannot deny their effectiveness in promoting the computing and broadcasting worlds. Such people are needed. Effectiveness matters; effectiveness gets things done.
Outstanding candidates for telecommunications visionaries within the industry are hard to find. I can think of a few possibilities from the fixed network sector. I have more difficulty with wireless. Who is there within our industry who could really drive it forward, who could communicate the vision to the outside world, who could provide a focal point for the industry’s ambitions?
It’s a serious question. Answers on a postcard please. Better still, send me an e-mail. stuart_sharrock@compuserve.com
