BETWEEN THE LINES
GEOFF LONG
Last week I was fortunate to be in a place that provided fantastic preparation for writing a column for the 20th anniversary edition of Database - Malaysia's Muzium Telekom. If you ever want to see how far the telecom sector has come in a short space of time, then head to your local telecom museum (unfortunately the closest is probably Kuala Lumpur, as we don't have one here in Thailand).
Muzium Telekom is housed in an old telephone exchange built in 1928. While it's dwarfed by the surrounding skyscrapers, the two-storey building is large enough to house a museum showcasing 120 years of telecommunications development, a movie theatrette, event and conference facilities, resource centre and canteen. In fact, the size of the building is an example of just one of the many ways telecoms has changed in the past 20 years - massive telephone exchanges are a thing of the past, as the clunking electro-mechanical gear has been replaced by ever-shrinking solid state components and, more recently, many tasks can even be done in software.
However, it's not just the physical facility and network that's changed - government regulations and business models are in constant flux, while the emergence of the Internet is causing massive disruption in the telecom sector. Not only that, but the rate of change is increasing at a mind-boggling rate.
Telecommunications goes back a long way and arguably has a richer history than computers and IT. At Muzium Telekom one of the more historical pieces was the ketuk-ketuk, basically a large chunk of wood that they could bash out Morse Code for transmitting messages with. Morse Code was how the whole "telegraph" business got started way back in the mid-1800s, but the interesting thing is that it was still being used for maritime communication up until 1999. If you look at the whole telecom industry, you'll find similar themes - much of the technology evolved but didn't change that radically over more than a hundred years. Until now.
Alexander Grahame Bell went one up on the telegraph in the 1870s with the telephone - he got the patent, but there's a lot of competing claims on who invented it - while Guglielmo Marconi got his patent for radio communications towards the end of that same century. Add in the work being done on undersea cables during those years, starting around the 1850s, and you more or less have the essence of telecommunications as it would exist right up until around the time Post Database was getting started.
I first started covering the telecoms beat around a decade or so ago, and back then many of the operators were still known as "PTTs" - for Post, Telegraph and Telephone department. Most were government owned and had a monopoly position in their respective markets. They were not what today you'd call a "service-oriented" company, as witnessed by the months or even years you'd have to wait to get a basic telephone line (some would argue that it's not much different today here in Thailand, but that's another story). But then things started to change - slowly and along different timelines, depending on the country, but the change was evident.
Looking back, there are two clear catalysts that have remodelled the telecom industry: mobile telephony and the Internet. While the Internet's role gets more media attention, the influence of mobile communications should not be underestimated. And it wasn't that long ago, either - the first GSM network only went commercial in 1988, in Finland. Here in Asia the mobile revolution happened in the 1990s.
Perhaps the biggest impact of mobile communications is that it often introduced an alternative operator in each market, and in many cases multiple alternative operators. As a result, it brought in much needed competition and often new and more creative ways of serving customers. Governments sometimes also saw the positive results of competition and introduced alternative carriers for the fixed line sector as well.
Another thing that mobile communications brought was new services, sometimes without realising it. For example SMS. It now seems like a great idea to send text messages from a phone, but the phone companies didn't plan it that way. Rather, users started playing with it and soon realised that it was an effective way to communicate, creating a nice little money-spinner for the operators in the process. That was perhaps the start of a trend where the user is now more in control of the features and services that they want than ever before. In the jargon of the industry, the power is going out towards the edges of the network.
Around the same time that mobile communications was coming into play, the commercial Internet and the World Wide Web were also in the mix. Again, one of the less obvious things it brought was competition - in many countries there were far fewer restriction on the number of Internet service providers that were allowed into the market. If the Internet had been controlled solely by the government-owned telcos of the day, you can guarantee that it wouldn't have been as widespread - if they had let you use it at all!
The mobile phone brought the user more choice and power, but it's the Internet that has put the user firmly in control. Just use the obvious example of Skype. Now anyone with an Internet connection can make "free" calls to anyone in the world. In just over three years it's managed to get 9 million users. And it's not just the cost of the calls, but also the features and tools that the user community around Skype has created that makes it appealing.
Skype is just one of many such services, and it's also just the start of what's happening in the telecom sector. Take another example in the form of a company called Fon. It's rolling out what it calls the world's largest wireless network through a concept dubbed "user-generated infrastructure."
In less than a year Fon has created what it calls the largest Wi-Fi network in the world using the social networking concept. Users buy a Fon wireless router, then agree to share their home broadband connection with other users. In this way, Fon users have free access anywhere they go in the world, or at least anywhere there is an open Fon router.
The problem for the traditional telco is how to make money when the likes of Skype, Fon and plenty of others are giving their services away for free. They also see companies like Google and Yahoo making piles of money without owning the telecom infrastructure. That's why today some telcos are trying to re-invent themselves in areas such as content, media or business services. Some of them will succeed, but others - particularly the ones that continue to operate the way they did 20 years ago - will fail.
Whatever the outcome, you can guarantee that if Post Database happens to celebrate another 20 years, your telecommunications company will look a lot different than it does today.
Email: geoff.long@gmail.com
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