Tuesday, January 15, 2013
To start with they should let submarine economics of waves rule, why bother about stm1s & stm4 and leases, when submarine cable capacities are waves 10G moving to 40G to 100G. This will not only allow the right ones to be in business but also unable the not so right ones to meddle the business and twist things. This is wholesale business, let it remain such.
Handling at wave level will ensure that there is none or minimal cost overheads or complications.
Second, let the prices be left at a reference level only a, and free the cable landing station owner be allowed to make a demand-supply based business out of it. Policy makers should focus on enabling the industry , fairly , not by replacing a erroneous policy with another, not at the cost of few to the benefit of others.
Thirdly and most importantly, let the government ensure land/ facility is allotted for landing submarine systems. What about policies that allows single window permits for all agencies to ensure a cost and time deterministic way of setting up one? Too much to ask to ask for simpler policies! Huh?
And for heavens sakes lets not behave like crabs in a bucket !
Sunday, January 13, 2013
In 2006 , when India declared that all telecom operators who had a submarine cable landing capability must share with all other telecom operator, as per a set of regulated set of rules , which included reference commercial, based on government governed rules and approved commercial rates.
And so it went for the past 5 years. Surprisingly, 12 submarine cable lands in India, but 95% of India’s International Data traffic is served by the cable gateways of two companies, Tata Communication ( India’s incumbent monopolistic International Telecom Co, until Tata’s bought the controlling stake in early 2000s.).
So between the sides of privatization of telecom industry over the last 10 + years, no one other then Airtel , invested heavily on developing cable landing infrastructure.
Yes, BSNL ( the other incumbent Indian operator), wasted tax payers money on the behest of a handful of European Telecom operators, to build a wasted system called Bharat Lanka Cable or Indo-Srilanka Link (BSL or ISL, makes no difference what you call it , as it is of no business value).
Reliance Communication ( RCOM), post their acquisition of FLAG telecom & their quasi failure in getting access to the CLS which was with TCOM ( VSNL), went on to build FALCON , which landed in Versova.
Post that, the only notable mention is SIFY, who made a brave strategic investment in a CLS , and went on to successfully land GBI & MENA systems into India, which is a commendable job, considering the scores of Global Carriers playing in the Indian market, rather chose to spend their shareholder dollars in lobbying for getting access to infrastructure built by the couple of telecom operators , who had invested their time & money on these strategic areas.
Getting a cable system to land in India, is not just expensive & time-consuming but it’s a huge effort & drain in precious resources of a telecom company, a game of patience & uncertainty, as neither the TRAI like any other government agency has any set procedure or concessions for developing one.
One has to go around and circumnavigate the multiple agencies and bodies, sometimes for months, to get the necessary permits for getting in the experts, materials, fisherman permits, municipal permits, naval permits, coast guard permits, security clearance et al.
Not to mention the amount of undertakings one has to provide in the process.
Now in 2006, when TRAI , mandated that all ‘IITE’ ( Indian International Telecom Entities) , be allowed ‘non-discriminatory’ access to any Cable Landing facilities in India under a TRAI regulated process.
The commercials for access, is based on a cost and based on a process & methodology , defined by TRAI. There were flaws, but it still allowed open access to any IITE.
But there are whiners, who were trying to sell a 100 buck note for 10 buck and in the process they managed to get the prices of a US to India telco circuit price, down below the cost of one from Mumbai to Bengaluru.
And in continuance of this, these bunch of telecom operators , were gifted by TRAI , what appears to a beach holiday , the cost of which will be have to be paid the country, India.
It appears, two of the CLS owners, were also lobbying against the current access charges, they apparently were the ones who never had success on driving traffic through their facilities.
The ignorance of telecom economics by the policy makers is evident, when they accept the non Indian telecom operators point that in other countries the cross connect services are far lower than India.
But anyone with even a single digit telecom IQ will know , that the same access fee is charged in many different ways in all countries, unless the government has given concession.
Check the cost of backhaul & cross connect charges in CLS & Meet Me Rooms in Singapore, Europe & US.
A classical case of a bucket of crabs, trying to get the king of the hill down ! ( to be continued)
Monday, March 5, 2012
When I spoke about the Law of Infrastructure Returns, while I was in Capacity Middle East 2012, last month, I was not sure if the telecom industry decision makers were aware of the the not so talked about underlying principles around telecom infrastructure investments.
Telecom Infrastructure is a very complex case for business modeling, as unlike a typical business, where there is a fairly direct relationships of returns to the investments made and to the value created, In in Telecom world, as we are will agree, it is extremely fragmented. Fragmented by regulations, infrastructure availability, seamlessness of policies, governmental and corporate participation, mono-dua-trio polys , entry barriers, level playing field, discrimination, lobbying et al
Because of these elements and forces, over the years some very distinct trends have emerged in telecom infrastructure investments and returns.
Broadly , telecom infrastructure can be divided into 3 distinct categories:
a) Wet Segment or Subsea/Submarine,
b) Backhaul or Land Segment
c) Last Mile or Access Segment
If the investments per megabit of bandwidth is compared over the 3 categories, one would see a magic ration of 1:3:10, a STM1 kilometer costs $1 in wetsegment , it would cost $3-$5 on the Backhaul segment and around $10-$15 on the Last Mile segment.
Surprisingly, on the returns side, a similar magic ratio holds true.
If there is a standalone , unbundled price for each of the segments a) b) c) then the returns ( market price) will be in similar or more stretched ratio. Have seen in some markets 1:5:15
There is a methods to this madness:
1. Why are Wet segments costs/sells at a fraction of the other 3 ? Simple logic, since Wet Segments are more often then other are in not governed by any country or state, hence
a. no regulatory shelter for telecom operators to lobby behind
b. no regulatory restrictions for restricting partnerships
2. Why are Backhaul Segments costlier then Wet Segments?
a. If a Wet Segment has to land, it has to land on a beach. Beach properties are expensive , even if designated by government , like in Hongkong, . So general cost and barriers for landing points escalates costs.
b. Municipalities & Government charges for RoW ( Right of Way) can very opportunistic. Places like Mumbai & Singapore can be as high as $240,000 per km just for RoW.
c. Then the same reason why Wet Segments are at a fraction: lack of partnership within a country or state, blessed by regulatory policies and local nuances.
3. Why are Last Mile costliest?
a. Last Mile is the interface, where the value of telecommunication is delivered, so it deserves to be costly.
b. And again, lack of ducts, clear governmental policies, regulatory policies, stealth monopoly practices by existing players
c. But to be fair, it costs a lot more to do a STM1 Km of last mile then any other piece of telecom infrastructure.
As long as telecom leadership, keep themselves in harmony with this Law, they can avoid heartaches, when they find that the actual vs projection is off because they are off by miles, as they had not applied this law in their business case. And then to hide this, builds a business case to put some fiber on the ground ( backhaul) to capture some of the ‘escaping revenue’ , only to find that still 70% of the returns is in the Access Segment. And I don’t see much of partnership happening there in the medium term to enable the efficiencies to go up and costs down.
Thursday, August 26, 2010
Wednesday, August 25, 2010
Monday, September 21, 2009
Organizations thrive on good leadership and they been surrounded by quality human resources.
One most missed characteristic while identifying future leaders is super resiliency. As Jack Welch says , 'heavy duty resilience'. Everyone makes mistakes, but true leaders learns from these mistakes and comes back with renewed vigor and velocity and confidence. If this characteristic is not there, then the leader cannot give direction in times of need and will fail when things become tough.
Leaders are not just executioners but are orchestrators.
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Tuesday, August 18, 2009
Rare it is to find a corporate without a coterie and a innercircle, however small the corporate be, however profitable or unprofitable they are.
If it's one of the loser category, there is a guarantee the turmoil within will feed the fire with the clingers around. And losers are typically the corporates who have trust averse top management. It's chaos, like a cats in a hot tin roof!
Now is there a way out?
Yes, there is and it is very simple.
It starts at the top.
Start Trusting & Stop Thrusting.
Trust is the way of life, you trust the pilot of the aircraft to trust the air traffic controllers to make sure you fly off and land safely. I bet you will never recognise the pilot , if you see them. But you trusted them right?
So why can't you trust atleast the persons who hired you , who you hired and who works for you?
For once you set the base rules, that trust begets trust, you will find them all trusting you and ensuring you look good amongst others rather then making you feel good.
This is important, as most of us have a short sighted attitude to like to feel good then to look good. I am sure you would have re-read the last sentence to understand that feel good is all about " I , me , myself" , while ' look good' is what you're to to the world.
And that can happen only if you dare to trust..