Telcos' 'largest problem': Politicians

Politicians' lack of understanding of the telecoms industry is one of the biggest challenges, and results in uncertainty for telcos with regards to investment planning, according to an analyst.

In a Tuesday statement on 2010 predictions for the telecoms market, Strand Consult said that in almost all countries, operators face challenges of not knowing how political systems will handle allocations of frequencies, refarming and the digital dividend associated with the switch to digital terrestrial TV.

"Operators around the world face a period where a number of frequencies will be allocated and they will have to start redesigning their networks to use a combination of different frequencies and technologies," the Danish firm said, adding that this hinders operators' plan for investment.

The impracticality of the situation will see "many operators rebel against the political system and demand a long-term telco strategy" in 2010 to help them better plan their investments, predicted the analyst.

Strand Consult added that network sharing will increase next year as telecoms operators endeavor to limit investments and achieve flexible operating costs.

To solve the industrial-political divide, the analyst advised politicians to employ the following means:

• Clarify and explain to operators the terms for network sharing agreements.
• Ensure that agreements are neutral both regarding technology and frequency.
• Publish a roadmap that shows when different frequencies will be available and the terms under which they will be offered.
• Allow the market to drive mobile development.

Mobile broadband, added Strand Consult, will be a big winner in 2010 as more users switch to wireless mobile technologies. The company noted that the share of broadband market subscriptions to plans of up to 5Mb, will increasingly shift from fixed line to wireless connections.

Competition between fixed broadband providers and mobile broadband providers will be based on the price of mobile broadband connections and not quality of service, it added.

Operators will have to rely on aggressive pricing and wide distribution to attract customers, even to the extent of customers "receiving more than they pay for", said Strand Consult.