2005 is the year of brave sentiment. Software players are firmly nailing their colours to new standards such as Linux. In the telecoms space, Cable & Wireless (C&W) is in the vanguard of established giants that are wholly embracing the promise of internet protocol (IP) communications. C&W’s new local country director, Noreen O’Hare, plans to embrace IP to make the company one of the top three telecoms players in the country.
The technology downturn got a lot of press in 2001 in such a way that it overshadowed a much larger downturn that swept the 150-year-old telecoms industry and cost hundreds of thousands of jobs worldwide. UK telecoms giant C&W was just one of a number of established giants that ran close to the wire and by 2002 had nearly run out of cash.
Rigorous cost cutting, job losses and a redrafting of the business plan saved the company. In 2005 the company is now in the vanguard of a fundamental revolution driven by IP that will influence not only data but voice communications too.
Since taking the helm of C&W’s Irish operation in 2004, industry veteran O’Hare has beefed up the local management team and refocused the company on emerging opportunities in the IP arena, particularly in the corporate and government market space. Examples of moves in this direction include a €500k deal last year to provide IP networking to the Department of Social and Family Affairs and more recently an €8m contract running over five years to roll out and manage a wide area network to more than 100 Ryanair offices and destinations across Europe. It is also implementing an IP contact centre in Dublin and is routing all Ryanair’s inbound customer calls from the UK across C&W’s network to the new IP contact centre.
O’Hare is firmly convinced that the IP revolution sweeping telecoms will make an impact on Irish Government and corporate business market. “Many companies are looking at convergence from a ‘when’ not ‘if’ perspective and the maturity, availability of IP is driving this. Voice over IP (VoIP) is often the first step that companies take on the journey to convergence. It’s a natural, evolutionary step for them, as communications are fundamental for any business. VoIP can deliver some tremendous benefits to an organisation, such as reduced communications costs, increased mobility and productivity. It can support business transformation and effectiveness.
“VoIP has matured quite significantly and this means that its stability and robustness as an alternative communication method to traditional PSTN lines has grown with it,” O’Hare believes.
O’Hare also believes that the telecoms industry itself has not been doing a great job in selling the vision of VoIP — being obsessed the speeds and feeds rather than the possibilities — and that inspiration could come in the way that consumers are embracing VoIP to reduce call costs. “We are seeing terms such as IP, convergence and VoIP entering the psyche of the mass market. Consumers are using Skype, a freeware internet-based VoIP service to call their friends and family around the world. Once this happens, awareness of the tangible benefits — usually cost and user experience — grows quickly.
“For example, kids tend to use technology earlier than their parents. If the child of a CEO uses Skype to call friends and the CEO sees a reduction in the phone bill, then he or she can see the positive benefits of using IP-based communication first hand. Three years ago, IP was far more high level and conceptual and tended to be a technology-driven discussion. But IP, convergence, transforming business effectiveness are no longer simply an IT issue, but a business issue. Therefore CEOs, chief information officers, financial directors and commercial directors are all interested in the positive benefits they can gain from IP-based communications,” she said.
While IP communications are certainly the topic de jour, the harsh truth is that unless Ireland can resolve its current broadband deadlock, consumers and businesses will not be able to get their hands on the technologies or their inherent benefits. O’Hare readily agrees: “Availability, accessibility and cost are the overriding issues. As an industry we need to do more to invest in infrastructure to provide access for home users and businesses. As soon as more people start to use broadband, then economies of scale would suggest that the costs could come down. The market also needs to be more competitive; the greater number of players should equate a more competitive cost structure.
“It is a slow journey, but the benefits will be tremendous for our economy, our business and personal lifestyles. My own experience of having broadband in my home and that of others I know has instantly changed the whole user experience of the internet. Everybody should be able to benefit from that. And once we have solved the accessibility issue, then we need to look at the bandwidth issue, driving down contention, so that we can provide businesses and homes with greater power to run IP applications, such as VoIP.”
Returning to the topic of the recent telecoms industry downturn, O’Hare believes that the recovery is on but it is far from complete and consolidation in the industry is set to continue. “Having been a part of the IT and telecoms industry for the past 20 years, it has been an interesting journey for all concerned. It is possible that we will see further consolidation in 2005. MCI is the most visible example at the moment. There are a number of smaller, mostly national players throughout the world who have struggled to turn around and are looking to quickly exit in as positive way as possible. There are also a number of resellers and start-ups that have established a great presence post-turndown and they could be looking to acquire or be acquired.
“Many global players are focused on the job in hand, growing a business, controlling operational costs, investing in the right infrastructures and applications. The fog in the industry is clearing. We have seen many global telcos, reengineer their entire operations so that they can move quickly and nimbly to take advantage of the growth curve when it arrives. 2005 will see global telcos continuing to execute that strategy and chasing the convergence/IP opportunity,” she said.
In conclusion, O’Hare is optimistic about Ireland’s prospects in terms of embracing new technologies and telecoms business models. “Any changes in the global telecoms sphere will have a positive effect on the Irish marketplace. From a C&W perspective, Ireland represents great opportunity and we have set our sights on becoming one of the top three players in the market in Ireland. This will bring greater choice to the Irish business community that can only be of benefit to business growth.”
By John Kennedy