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NewsGlobe: Financial
More Technologies, More Investment Deals
But Who Will be the Winners and Losers?
by Ken Wieland
As technology innovation continues apace in telecom, and
new business models are tested in the market, VCs operating
in this sector are usually asked about winners and losers.
Understandably, their answers are invariably guarded,
particularly about whom the winners will be. One reason for
that hesitancy is that they don’t want to over-hype a market
before they invest in it. A less charitable explanation is that
they genuinely don’t know.
Peter Gardner, global sector head for communications at 3i,
was certainly keeping his cards close to his chest at the
TelecomFinance session today on emerging
technologies. “Because of the vast size of the telecom
market, it only takes a very small take-up for any one
technology to be successful,” he said. “In that sense, every
technology can be a winner.”
Perhaps a little bit vague but Gardner was much more
assertive on what he thought wouldn’t be a success in the
market. “Operators can’t work in silos anymore,” he said. “It’s
no use to say, ‘we are a fixed player’ or ‘we are a satellite
player’ or ‘we are a mobile player’,” he said. “Customers are
leading the demand for converged services and that, in turn,
will lead to more consolidation.”
During the session, there were multiple technologies and
business models to consider from various companies --
WiMAX and WiMAX-meshed networks (Telabria); VoIP for
consumers and business (Vistula Networks); peer-to-peer
video streaming over the Internet (Rawflow); and cross-
operator delivery of QoS-enabled services (Nexagent).
However, it was on the emergence of the managed services
market that there seemed to be most agreement. “This has
become a big area,” said John Yeomans, director of
FirstCapital. “It could be in the future that revenues are
generated more from equipment providers that deliver those
services, rather than the operators themselves, on a licence
fee basis.”
Less hypothetical, perhaps, is the growing role of systems
integrators or VNOs (virtual network operators) to ‘knit’
networks together -- on a bespoke basis – to deliver
managed services to the business customer.
“The VNO model, where services are managed over different
networks, is definitely an important industry trend,” argued
Charles Muirhead, Nexagent’s CEO. “When MCI won the deal
with ABN AMRO [in December 2005] to manage its services
across the networks of its own choosing, that was big moment
and a surprise for the industry [and further vindication of the
VNO model]. BT, using its own network, was widely expected
to get that contract.”
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