Thursday, January 26, 2006

Making it happen

The current session is an interesting mix. Jonatan Svarvasson from Reyjavik Energy presented his case study, of a multi-utility which tried powerline and dropped it in favor of fiber, and tried end-to-end service provision and abandoned it in favor of being an enabler. (The company just expanded into its fifth area of operation, sewage services, so take heart telcos, your business still ranks above some others in attractiveness!) He also highlighted a central dilemma for companies answerable to the financial markets - a 25-year depreciation period (though de facto asset life is much longer) and a 6 - 7 year total project period - parameters familiar to utility investors, but maybe not telcos (unless of course telcos recast themselves as utilities).

Toivo Praakel of Elion in Estonia presented the incumbent viewpoint, which was, "If we don't do it first, the municipalities and utilities will." He also pointed out the apparent contradictions inherent in Estonia - GDP per capita of only EUR6000, post-tax average monthly earnings of EUR400, but 6% of GDP expended on telecom services and 4% on IT services (indeed Elion's 5Mbps internet/voice/TV product costs EUR30 per month), 90% of consumer financial transactions are electronic, and the Estonian government no longer uses paper. He basically made the case that given this background, in Estonia exclusion from access to the internet genuinely constitutes social and economic exclusion.

Helmut Leopold outlined Telekom Austria's pilot project in the Carinthia region, which is committed to deliver the potential for 10Mbps access for every home in the region by 2008, and will incorporate the local media creation approach pioneered in Engerwitzdorf.

Herman Wagter from Citynet gets the quote of the day award for his presentation: "The infrastructure owner must not be allowed to hold economic growth hostage in the interest of shareholder value." He also challenged Viviane Reding's view that infrastructure based competition is a rational approach. Unfortunately, she had already left for another appearance elsewhere.

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