The 1310 Law of Telecom Infrastructure Returns

 

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.

 

 

 

 Published by WebStory

Self Managed Teams

  Like many of us, who are part of today’s  business workforce, you must have encountered  a colleague or a boss , who drains all the capabilities out of a team.  This is typically achieved by anti-team behavior by their onemanship,  unilateral & dictatorial decisions and by cutting off debates in about anything.     Don’t take me wrong, most of the time their intentions are for the common good. This is often a syndrome with people in leadership positions.

  Some ways to let teams work :

1.       Let the team members do the thinking. They may have a better answers and collectively enable superior end results.

2.        Let the team get involved in the decision making process, as much as practically possible. The team members are the best devil’s advocate. Remember they all want to succeed individually and be part of a winning team.  Hyper communication helps not just in arriving at the best decision but also enables ownership. Never short circuit your team.

3.        Control your excitement. Hear them out. Remember the wise owl : “ the more he hears, the more he learns’  Enable sharing of ideas.

 If the above is achieved , you have an assured high performing self managed team. 

Solving Leadership Conflicts

It will surprise anyone, if your next rung leaders does not have conflicts. Being groomed through diverse organizational cultures, educational background  and social upbringing, it is natural to have differences in leadership styles, which lead to  conflicts.

As their leader, the task in hand is to manage your leadership chain and ensure the best is brought out from each one of them to serve the best interests of the organization and it’s shareholders.

  

1.    Focus on what is in common , not on the differences. If you have a detailed look, you will find the shared values and goals.

2.    Hyper Communicate. Be open and discuss the differences, this will enable management of expectations.The

     differences are mostly to do with how things should be done, not on what is to be done.

3.    Diversity brings in the best in a team. The devil’s advocate benefits everyone in the team. This enables superior end results.

Super Resiliency as a Human Resource Characteristic

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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Dare to Trust , the most RARE Asset!

Dare to trust .. this is the most basic yet the most blaring deficiency in today's corporate.   Tell me one corporate where there is pure unadulteraed trust, among peers, among subordinates. The rarest is of this attribute is found in the seniormost of the  management heirachy  .. ahem ,   hair get's rarer as you age and air get's rarer as your altitude rises.

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..

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As you solve so shall you grow

While executives and managers in companies of all age grapple with the ways and means to make their respective business grow, the ways and means of achieving business growth are utterly simple.

There are issues and challenges in corporates, small or large, in the day to day business execution. These could be pertaining to sales and marketing, operations or technology or production. This is given.


The successful companies are the ones who are able to solve these problems, rather then shove these problems by shoving them below the carpet. Executives and managers, will have to pull themselves up and understand the issues , why they have happened , what are the root causes and what can be done to fix them.


And this is easier said then done, because it requires a habit to be created to thing as a team , to go to a higher level of thinking on an ongoing basis.


As you solve, so shall you grow

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Managing Talent is a Strategic Priority

Organisations are made up of people , products & process. But the most important ingredient is their people. It's the people who create and deliver the products & processes. Then why does so many organisation fail to get the  critical talent management piece correct?  A billion dollar question and the solution is not too tough. 

It begins with making Talent Management a strategic priority. 

Many  organisations turns a blind eye to this critical aspect and let's  'HR' run through the motions. HR in many organisation is  single dimension division within , whose sole objectives is to justify the 'bell curve' , give 'affordable' increments and some standardisation of incentives and polies within the industry of the organisation. And there are many organisations , where HR is busy 'recruiting people. This is one of the biggest trap an organisation can get it. 

If talents are managed well, they will attract the right talents to come and thrive in the organisation and make the organisation excel.

Few often missed out factors in making an environment talent condusive:

# 1 Consistency in Management Processes: management by objectives

# 2 Cultural Diverisity : if everyperson in the organisation have the same background then who will be the devil's advocate, how will the organisation innovate?

# 3 Developing & Managing Leaders:  teaching people to fish, as against catching fish for them .. and letting people understand the concept of teaching people to fish

# 4 Hiring people better then what you already have, including yourself!

 

As Jack Welch  says  "If you pick the right people and give them the opportunity to spread their wings and put compensation as a carrier behind it you almost don't have to manage them."