Telephony changes will affect your business as profoundly in the future as the computer has in the past.

© Dr. Terry J. van der Werff, CMC

Four powerful forces are converging to alter the global telecommunications landscape, which in turn will profoundly impact your business: (1) regulatory reform; (2) cross-border alliances; (3) emerging infrastructure; and (4) technological advances.

The path of telecom's future is set by on our insatiable desire for information: already, more data travels over the wires than voices.

Lowered regulatory barriers. Stripping away all the legal techno-babble, regulatory reforms here and abroad open wide telecom markets that were heretofore restricted. In the last generation, we experienced the transition from the old AT&T as a nationally integrated monopolistic system to the present AT&T, MCI, and Sprint as long-distance carriers with the regionally monopolistic Baby Bells and GTE as local providers. The landmark Telecommunications Act of 1996 dramatically changed this and unleashed fierce competition everywhere by these companies and others. On January 1, 1998, the European Union introduced regulatory reforms at least as great. It remains to be seen whether consumers, personal and corporate, are better served.

Global alliances. Everyday the business press writes about another potential or real telecom alliance reaching across national borders. While most link established companies in developed countries with the needs of emerging nations, others are solely within the developed countries. Think, for instance, of the year-long battle for control of MCI by British Telecom. Wishing to expand their 20% share, BT made a bid of $24 billion for full ownership. While the regulatory wheels were grinding, MCI's poor earnings report caused BT to have second thoughts, whereupon they dropped their bid to $19 billion. Suddenly, WorldCom (who!?) came out of nowhere to offer $30 billion, principally in stock, followed soon by GTE's offer of $28 billion in cash. When the dust settled, in just a matter of days, WorldCom emerged the victor in history's largest corporate takeover, valued at $37 billion.

Emerging infrastructure. Two decades of strong economic growth, especially in China and South Asia, has generated a huge need for new communications systems, while simultaneously providing much of the ability to pay for them. The beauty is they are not stringing copper lines like North America and Europe did in earlier times. Rather, they are building systems from scratch based on entirely new wireless technologies. Some countries now have more wireless phones than wired ones.

Ambitious satellite systems becoming operational in the 1998-2002 timeframe will provide new global telecommunications infrastructures for all. The four key satellite consortia are Iridium (led by Motorola), Globalstar (led by Loral), ICO Global Communications (led by BT, Inmarsat, and TRW), and Kirkland-based Teledesic. These systems, ranging in cost from $3.5 - $13 billion and funded by private money, works massively to the benefit of emerging nations, though not under their control.

Infrastructure is not cheap. Funding the remaining infrastructure is beyond the capability of most governments, even those in the developed world. From China to Macedonia, from France to Australia, government owned telecom companies are being privatized to raise the capital to match their systems with tomorrow's needs.

Technology. Moore's Law states that computer capability doubles every eighteen months. This law has held true for 50 years and shows no signs of abetting. Today, a bewildering array of new technologies, straddling the lines between computers and telecom, is spilling out of research labs onto the marketplace, described by an alphabet soup of acronyms no one but an aficionado comprehends.

The Internet's explosive growth is a key driver of these technological advances. Indeed, Bell Canada's recent reorganization assumes the present telephone network will be swallowed by the Internet! The Denver-based start-up Qwest Communications is based on the same assumption.

What should you do? The lessons of the Telecommunications Revolution extend around the globe, impacting every business. For example, the WorldCom/MCI/BT takeover struggle suggests that your biggest threats and opportunities may come from business "upstarts," not from your traditional competitors. Upstarts see future possibilities; established companies encumber themselves with legacy thinking. Ask yourself, which company - WorldCom or AT&T - looks like a world leader?

Don't rush into rewiring your company without rethinking how communications - data, information, knowledge, and wisdom - should flow so you can prosper in a dynamic future. This is tough work, as it cuts across strategy, ideas, data, materials, paper, money, and people. Only then decide on a framework for communications which weds business requirements with technological capabilities.

There is no better time than now to look beyond the horizon for any development (economic, technological, business, political) which could conceivably affect your business. Charge a "future issues group" - the more eclectic the better - to do this. Host regular brown bag lunches, company-wide forums, or intranet chat rooms to brainstorm the impacts of the more improbable issues and strategies to respond to them. (I assume you already deal with the probable ones.) Set in motion a mechanism that works for you, and jealously protect it. Your future may depend on it.

 

Sign up for e-mail alerts to new Global Future Reports™.