Unless you work in the telecommunications sector, it’s always been hard to stay informed about where telecommunications is now and where it is headed. This gets harder when competition between suppliers hots up and supplier choices, albeit welcome, add to the confusion.
So what’s going on, and what do New Zealand managers need to know about the local telecommunications industry and its emerging services to make informed decisions about the next 12 months?
The three main network providers still compete vigorously. Telecom, which controls the national telephone network, has more than 6000 employees and more than two million customers spread across its New Zealand and AAPT Australian companies. Australian-owned TelstraClear provides respectable competition with 1200 employees and bold plans to create and extend digital telecommunications networks and IP services throughout New Zealand. In the mobile network space, British-owned Vodafone New Zealand competes successfully with Telecom and now has more than 1.2 million Kiwi customers.
Several smaller telecommunications suppliers have presence in New Zealand, supplying single or smaller parts of wider telecommunications system. These include wireless, software and IP telephony specialists and satellite service providers.
What are they up to?
Telecommunications companies don’t progress technology for technology’s sake. To grow, compete, reward shareholders and parent companies, telcos respond to customer demands.
In the business space, they demand cheaper, more secure, more mobile, more global, more flexible and more manageable telecommunications systems and connections. And while larger organisations already realise the potential of telecommunications tools to market and deliver customer service, the sheer volume of small businesses in New Zealand drives telcos to also develop products and services that allow SMEs access to sophisticated telecommunications products without actually owning them.
What products?
There are three key areas of current tele-communications development which New Zealand businesses should watch in 2004: IP (internet protocol) telephony, wireless telecommunications (which include mobile networks) and telephony software products.
IP telephony (or voice over IP) describes using an IP data network (a data network that uses the IP) to carry voice in data packets. This is departure from the way voice is traditionally carried – over switched circuit networks as signals.
The advantages of using data network to carry voice are simple. Voice that travels between branch offices over wide area IP data network avoids toll costs. The business simply pays its normal data network connection rate. The data network can also carry data alongside voice, and be set up to also carry video. Eventually, voice, data and video will be accessible together in one device; leaving just one network and fewer devices to manage. This isn’t happening yet, but savvy companies are awake to the possibilities and thinking about restructuring their data and telecommunications networks to seize maximum business benefits in the near future.
To IP or not
IP telephony is hot. In February, US-based ABI Research, which researches the wireless, automotive, electronics, broadband and energy industries, found while many businesses still had legacy switched circuit systems, nearly all new telecommunications deployments had some degree of IP component to them. ABI expects that by 2006 more than 90 percent of new IP-PBX seats will be on all-IP systems.
Closer to home, according to the 2003 MIS magazine’s Top 100, which annually ranks IT activity amongst New Zealand’s largest information technology users, interest in IP telephony has ballooned. In 2004, New Zealand organisations extending an IP telephony investment include Fonterra, the University of Auckland, New Zealand Steel, Whitireia Community Polytechnic, travel firm Gullivers Pacific, Waikato Institute of Technology, financial services group IAG, and the Auckland University of Technology.
Ernie Newman, chief executive for the Telecommunications Users Association (TUANZ), says IP telephony has moved from “bleeding edge” to leading edge technology.
“Many larger organisations are moving to IP and that is sensible decision. IP telephony works for companies that have vast flow of information going across wide area network,” says Newman. But smaller businesses still see telecommunications as just another bill to pay instead of an area of strategic advantage. “A lot of them are wrong about that,” he adds.
There are certainly small business friendly IP telephony options. Patrick Carson, head of solutions management for TelstraClear, says TelstraClear is concentrating hard on making IP affordable to smaller businesses by leasing its IP infrastructure and services in hosted IP service it calls Private Voice.
The benefits of Private Voice include businesses not being physically constrained to desks by devices. “People can access devices on the IP network from anywhere using PIN number. Eventually, businesses will be able to determine the status of people connected to the network and an upcoming technology called SIP (session initiation protocol) will let them deliver telephony sessions using voice, video or data. Messages will be able to be left as text, voice, email or .wav files,” says Carson.
Investing in IP infrastructure is still the domain of larger organisations. But, according to Carson, some organisations opt for hybrid solution in which part of their IP telephony infrastructure is hosted by telco and some is owned. “We can offer gateway between virtual private networks using IP telephony; bit like having an extranet for IP telephony with rules and policies for access and exchange.”
Russell Locke, head of product development and management for Telecom New Zealand, says Telecom’s hosted IP service, IP Centrix, still provides PBX-like functions for businesses over Telecom’s own IP networks. Telecom has invested heavily in its IP services and security. “You have to get security right; when several customers share an IP switch [through telco hosted service] it’s quite complicated ensuring they can’t see each other,” says Locke.
Some businesses want to IP-enable their PBXs and invest in their own IP telephony infrastructure. However, the cost of doing that takes some swallowing. In addition to an investment in IP-capable PBXs, switches, routers and handsets; existing IP data networks often need to be re-engineered to carry voice satisfactorily.
New telephony infrastructure can also cause human resource problems. The merging of voice and data technologies can also deliver redundancies.
Wireless and walking
How well telco meets the mobility needs of its customers is competitive issue. Many benefits spring from being able to access internal and external networks while not “hard wired” to telecommunications service. For example, the Ports of Auckland shipping pilots (using Compaq ipaqs with Vodafone’s GPRS service); agriculture industry training examiners (Compaq laptops with Mobile JetStream); sales representatives roving rural New Zealand (South Island based Amalgamated Food Distributors using Palm Pilots, smart phones and Mobile JetStream for on-the-spot ordering); insurance and financial services agents and manufacturing supervisors on site.
Two types of wireless service are expanding: existing cellular phone networks with the capacity to carry data as well as voice; and WiFi, which transmits data and voice over radio waves at set frequencies. WiFi can be set up to form private, secure wireless network. And telcos are expanding their WiFi “hot spots” so workers on the road can access WiFi connection in, say, airports and cafés.
Mobile battle
Vodafone and Telecom are battling for mobile data supremacy with respective networks GPRS and CDMA 1XRTT (Mobile JetStream). Vodafone will begin rolling out true third-generation digital mobile n
