Share assets to survive, expert tells NZ firms

Sharing network resources is the way for telcos to survive as new high-speed networks are rolled out, says a global telecommunications executive.

Alcatel-Lucent's France-based executive vice-president in charge of global government and public affairs, Gabrielle Gauthey, said the telecommunications sector faced challenges.

The growth in demand for mobile connectivity will see the need for traffic to be off-loaded on to fixed-line networks as quickly as possible to avoid a capacity crunch, said Gauthey.

Flat revenue growth and the threat of players such as Google and Facebook combined with the need to invest billions in new access and mobile networks will force telcos to change, she said.

"I think [telcos] are going to be relevant but they have to change the way they invest. They have to accept to share more on the passive [networks]," Gauthey said.

European regulators have stipulated the final connection to customer premises will need to be shared.

Even new, high-speed wireless networks will be shared, particularly in rural areas, she said.

Overseas this sharing extends from basic tower infrastructure through to mobile spectrum assets.

"Sharing is the new way for next generation access. That doesn't mean you don't have differentiation on top," Gauthey said.

"That's really the shift for service providers."

The advantage telcos have over some new internet players is the existing relationship with customers.

"They bill them, they know them and there is also perhaps the question of trust. When you have a problem, they are local as opposed to the over-the-tops such as Google," she said.

"I do think there is room for service providers in being what we call smart pipes, not dumb pipes.

"They should be proud to provide connectivity but intelligent, managed connectivity."

She said there also opportunities to co-operate to provide a smooth interface for application providers over multiple networks.

Gauthey has witnessed incumbent telcos, such as Telecom, go through a phase of despising new network initiatives, before ridiculing, then opposing it and finally joining as a partner in the scheme.

Gauthey was in New Zealand meeting local customers, Crown Fibre Holdings representatives and government officials.

Before joining Alcatel-Lucent two years ago Gauthey was the French telecommunications regulator having also worked for the French equivalent of the New Zealand government's investment vehicle Crown Fibre Holdings.

She said countries around the world are envisaging public initiatives to accelerate and foster new investment models for sharing the basic network infrastructure.