Play nicely, now

commentary The one thing that 2005 made clear is that nobody can predict exactly what's going to happen in the highly volatile Australian telecommunications market this year. Telstra's late December admission it had put its plans to build a billion dollar next-generation optical fibre network in major cities on hold -- just one month after they were announced -- demonstrated that fact admirably.

commentary The one thing that 2005 made clear is that nobody can predict exactly what's going to happen in the highly volatile Australian telecommunications market this year.

Renai LeMay, ZDNet Australia
Telstra's late December admission it had put its plans to build a billion dollar next-generation optical fibre network in major cities on hold -- just one month after they were announced -- demonstrated that fact admirably.

That volatility is certain to see a raft of innovative new products and services introduced -- while others are consigned to the history books.

We'll probably also see the major telcos, the regulators and the politicians continue flinging acid at each other in vitriolic attempts to get their way, but one can always hope the debate will kick off soon with a more polite tone.

Reflecting on this uncertain environment led your writer to ask telecommunications analyst Shara Evans what her advice would be for businesses befuddled by all the spin.

The analyst's response was clear: keep your eagle eye on the contracts and service level agreements (SLAs) that govern your relationship with your telecommunications providers.

"The message to business customers would be to ensure you have sufficient flexibility in your contracts, that if the service is withdrawn for whatever reason, that you have the ability to cancel the service if they can't deliver what you've contracted for," said Evans in the wake of Telstra's December announcement.

She further advised businesses signing up for multi-year contracts for provision of broadband services to make sure they had so-called "benchmarking clauses" in place to ensure future prices could be adjusted downwards to reflect market rates.

"Prices have been going down quite rapidly, particularly on DSL types of connections as higher speed technology becomes available," said Evans.

"And you want to be able to trade up in speed, even if you're not churning your provider, you may want to churn your plan that you're on. Make sure that you've got the capability to do so."

This advice is particularly useful to Australia's 800,000 small to medium businesses, the majority of whom use DSL-level connections if they use the Internet at all.

For larger companies who are more likely to sign longer-term multifaceted deals, Evans' advice still applies, but they also need to keep an eye on wider industry trends to make sure they don't get left with legacy services and pricing.

According to telecommunications analyst Paul Budde, two of the hottest technologies that will make waves in 2006 are Voice over IP (VoIP) as an alternative to fixed-line telephony, and WiMAX as a wireless replacement for broadband.

"Telstra will launch its activities in the WiMAX market before the end of 2006," Budde wrote in a recent e-mail outlining key trends he predicts this year. And ANZ Bank has reportedly become the latest giant to signal its interest in replacing some of its tens of thousands of desktop phones with a VoIP solution.

What advice do you have to offer those signing telecomms contracts in 2006? Will the sector stabilise or is it rough seas ahead? Send your thoughts to renai.lemay@zdnet.com.au