Telecom Trends

Almost exactly a year ago, the cover story on the September 15, 2005 issue of The Economist was entitled "How the internet killed the phone business." If that was so, over the past year, we have seen various signals that indicate a reincarnation.

I think it would have been more accurate to talk about 'energizing' the phone business, not killing it. Indeed, it isn't just the internet that is catalysing change, we see wireless technologies, computer processing, entertainment and societal behaviours also driving a renewal of investment and employment growth.

TELUS has just announced a capital program to upgrade its high speed infrastructure to support TV and other bandwidth intensive services. Earlier this week, Toronto Hydro Telecom launched its downtown WiFi umbrella.

Bell is investing in extending its Optimax offering to more cities, pushing optical nodes closer to the home. Last week, Rogers entered into a multi-media marketing arrangement with Maple Leaf Sports. Most Canadian cable companies have been raising the speed of their basic internet services - in some cases to 10Mbps.

All signs point to active, vigorous rivalry in the market. Prices (at least per bit per second) are falling, at least for wireline services. We have written over the past month or so about the vitality of some companies, investing in new buildings, offering innovative new bundles.

On the periphery, there are IP-enabled companies, some small and some very large, offering voice and TV services riding over customer provisioned internet access streams. A recent CATA/Monster report says that the telecom sector has among the greatest number of job postings.

To paraphrase Mark Twain once said, reports of the demise of the phone business have been greatly exagerated.

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Update:
Mike Urlocker has a good post-script that looks at The Economist story a little more and asks some good questions.

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