It’s always a tricky business to get into telecommunications finances because they’re more tangled than the wires behind your home entertainment center and harder to read than the instructions that came with that do-it-yourself bookshelf from Ikea. Still, a couple reports issued this week shed a little light on world markets in general and cable markets in particular and where the money is and will be.

Oliver Wyman – that’s the name of a telecommunications analyst organization – released a study that said the best shareholder value can be found in companies operating in emerging markets. That had to be a stick in the eye to Comcast shareholders, who have been uncharacteristically squirmy lately about getting some money out of Philadelphia’s largest skyscraper.

The Oliver Wyman report said Bharti Airtel in India and China Mobile, neither of which is probably headquartered in a glass house that climbs up into the Quaker City clouds, are two companies leading the pack in performance. Their success is fueled by tapping into greenfield opportunities and pushing innovative business plans.

That sort of innovation, while increasingly more common in these emerging markets, should be an ingredient in the more developed world where "you really have to look for design innovation," said Reuben Chaudhury, senior partner at Oliver Wyman.

It could be the innovation that lifts the cable industry out of its current subscriber-losing doldrums via some form of new service that’s not necessarily tied to Hannah Montana’s next hairstyle. It could even be a voice-over-Wi-Fi (VoWi-Fi) offer, probably in conjunction with a mobile operator (Sprint, anyone?) and using 802.11n Wi-Fi. Big business to come VoWi-Fi is going to be big business through at least 2012, according to ABI Research. And that’s with or without competition from femtocells. T-Mobile is already innovating in the space with a combination 3G-Wi-Fi network play.

"They’re (T-Mobile) very clever because what they’re saying is, ‘We’d just as soon pull this data traffic off our infrastructure anyway, so go ahead and use Wi-Fi,’" said Stan Schatt, vice president – research director at ABI Research.

That’s not the best news for cable operators who will be providing the broadband connection onto which the T-Mobile Wi-Fi network gloms.

Cable, though, instead of worrying about this, should be thinking of ways of getting into the game, Schatt said, especially since voice seems a more likely business for the future than video.

"The main problem they have with voice is that most people aren’t really comfortable with the reliability of cable, and you don’t want your voice to go down when your cable goes down," Schatt said. "That’s their Achilles heel."

As it happens, back on the landline front, this week Charter Communications announced that it had surpassed 1 million Charter Telephone customers, with estimated total savings for consumers of $150 million annually against what they would have paid the traditional phone companies.

So while reliability – and innovation – could be a weakness, price-point appears to be a counter-balanced strength.

– Jim Barthold

The Daily


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