Tuesday, February 21, 2006

The Power of Cables

Something we noted recently when comparing the UK and Australian markets, is the similarity. Interesting as one has been deregulated for a number of years and the other moving quickly to further deregulation.

For instance:

The players: BT, Verizon(MCI) and C&W in the UK, and Telstra, Optus(SingTel) and PowerTel in Australia. One local former PTT incumbant, one large international and another local player struggling in 3rd place, then whole raft of others going into a consolidation phase.

In both countries the profile of service providers looks the same. A service provider is either excellent at Internet Access, or Data Centre Solutions e.g. Web Hosting, but never both.

What predicates success, well curiously those companies with cables in the ground are winning hands down on the Access services, those without are romping ahead in the provision of DataCentre solutions. Our research shows that this trend is accelerating with companies taking their access services from those who own the cables and hosting from companies that offer specialist services, or more personal approach.

When you have the data in front of you it makes a lot of sense, but the concern for the Cable guys is that with the growing dependency of business on Online services and the coming boom in consumer focussed content the value in the chain is moving more toward the Data Centre. All the fabled 'sticky services" are in the data centre and the cables are becoming a utility.

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