Around the world the telecoms industry is reaching new heights, this time it includes the developed markets as well. In these countries the latest boom has just surpassed the one of the late 1990s in both profits and new investments.
This time, of course, the boom is led by the Internet companies, but the telcos (Telephone Companies) who have embraced the structural changes that the telco bust generated are also in the lift again.

Interestingly, there are significant differences between the developments in the USA and those in the rest of the world.
The two US telcos, AT&T and Verizon, have moved into the interactive entertainment world and are trying to look more like their cable counterparts. But, despite previous predictions, the cable TV companies are dominating the broadband market. This clearly shows that the Internet is very much seen as an entertainment product.

In the rest of the world broadband is developing from a broader base. While entertainment plays a key role here as well, it is the community-based networks and services - based on personalised interactive communication - that are the driving force, with regional social and economic development, healthcare and education being other major leading forces in the process.
Europe is the global leader in broadband and the case studies coming out of that region are more relevant to most other countries than those coming out of the USA.
Interestingly, however, the web-based services are predominantly led by US companies. This, in itself, is a very interesting phenomenon, as web-based developments often undermine proprietary based broadband infrastructure-based applications from the telcos and cable TV companies.

While most fixed network operators are now moving towards structural change, the mobile world is still light years behind. Their days are numbered, but they have a great incentive to hold on for as long as possible to their lucrative voice and SMS charges. The last thing they want is for VoIP and email to challenge their business models.

Nevertheless changes are underway. New wireless spectrum auctions will be needed to get this market moving. Left alone no innovative changes will come out of this industry. They keep on throwing out the biggest hype in the world and are prepared to spend millions of dollars setting up smokescreens, such as mobile TV, to try and persuade us that new innovations are just around the corner. What a farce!

New wireless broadband spectrum auctions will bring in new players from other industries such as the media and the Internet companies. However the incumbents are using everything in their power to lobby the regulators and the government not to open up that spectrum for innovative services and new business models. It is to be hoped that governments will do what best for their countries, but, again, this could be a long process, and the results could easily be watered down.

All of this doesn’t make us feel very hopeful about speedy structural changes in the mobile industry – if it can be done by 2010-2012 that would be a positive achievement.
So the telco industry is back in favour and many financial institutions are eagerly watching this space, ready to become involved again. Fingers twitching when they see unnecessary costs and missed opportunities, they are ready to step in and do the work for the telcos if they fail to act.
We expect that this boom will continue till at least 2012-2015, so there’s still plenty of time for those lagging to jump aboard.