Strategic Foresight - Insights in Business and Technology

First, what I wrote about ABB's FY23 Results last year.     Update on ABB's Business  ABB's Acquisition Spree - Ongoing Tussle and Drivers Behind it.  My other post on NBN and its Economics

Australia Telecom Industry in Transition - From Four Pillar to Six Pillar Model  Australia Telecom Industry - Fixed Services  Australia Telecom Industry - Fixed Internet Ranking   Australia Telecom Industry - Mobile Services  Australia Telecom Industry - Mobile Internet Ranking   My previous post on the Global Telecom Industry Evolution to date.

 Generative AI - Framework to Identify Use Case and Investment Application of Framework - Use Cases for Telecom Gen AI - Use Cases for Telecom

 NVIDIA - The Godfather of AI - Why the Market is Bullish Key Message Q2 FY23 -  The data centre business, driven by demand from cloud providers and internet companies, played a vital role, contributing $10.32 billion (76% of total revenue). Gaming revenue also grew positively to $2.49 billion. Products like the H100 tensor core GPU, DGX supercomputers, inference platforms, and AI Infrastructure-as-a-Service in the cloud are poised to transform AI delivery, partnered with major cloud providers. Today Nvidia commands 70% of the AI Chip market. Other Key players are AMD, ARM (Softbank) and Intel.  If you take the other Nvidia divisions separate them out and add them together, revenues were up by 9.9% to $3.18Bn. That’s another way of saying that the Nvidia datacentre business is now 3.2x bigger than the rest of Nvidia, and the datacentre business now accounts for 76.4% of the overall sales for the company. A single chip can cost upwards of US$40K  and Open AI used about 10,000 of them to

How Generative AI Can Transform Communication Service Providers (CSPs)  The global generative AI in telecom market size was at US $150.81Mn in 2022 and it is expected to rise to US $4.9Bn by 2032, with a CAGR of 41% from 2023 to 2032. Response from GenAI tool:  -- Generative AI has the potential to transform Communication Service Providers (CSPs) in several ways, enabling them to enhance their services, improve operational efficiency, and stay competitive in a rapidly evolving industry. Here are some key ways generative AI can drive transformation for CSPs: Enhanced Customer Experiences: Generative AI can be used to create highly personalised customer experiences. Chatbots and virtual assistants powered by generative models can provide 24/7 customer support, answer queries, and offer personalized recommendations, improving overall customer satisfaction. Natural Language Processing (NLP): Generative AI models can process and understand natural language, allowing CSPs to offer advanced

Why Telcos are Struggling for ROI  Response from GenAI Tool -- The telecom sector has faced several challenges that have made it difficult to generate a satisfactory return on investment (ROI). While these challenges can vary by region and market conditions, here are some key factors contributing to the struggles of the telecom sector in generating ROI: High Infrastructure Costs: Building and maintaining the physical infrastructure for telecommunications networks, including towers, fibre optics, and data centres, requires substantial capital investment. The initial costs of rolling out networks and keeping them up-to-date can be burdensome. Intense Competition: Telecom markets are often highly competitive, with multiple providers vying for the same customer base. This competition can lead to price wars, reduced profit margins, and increased spending on marketing and customer retention. Regulation and Compliance: The telecom industry is subject to complex and evolving regulatory fram

 Aussie Broadband's  (ABB) FY23 Results and Why it's Emerging as an Acquisition Target NBN Consumer 2019, 100K customers, unprofitable.  2023, 700K customers, NPAT of $37Mn. 65% of Revenue from the consumer segment. 12% of NBN customers are on >  $100/month plan and 40% of Aussie customers are in this segment. Aussie acquires more than half of all new high value subscribers to the NBN. Business & Govt Business segment grew by 8% to $90Mn Rev. EE is adding to margin growth >800 new deals – SMB is driving it  Both segments utilise wholly owned fibre and an internally built cloud platform to generate 50% GM against residential GM of 30%. As those segments grow, profits will disproportionately rise. Smallest telco to build its own fibre backhaul. Built in house software to manage data loads, billing and other core functions. Wholesale business offers white labelled telco services to 3rd parties like Origin, was its fastest growing segment and a genuine surprise. Revenue r

TPG Heading for a Challenging Future  HY23 Results - Key Takeaways - The merger with Vodafone was a necessary remedy to the NBN, but it hasn’t lived up to expectations. TPG’s plan for the Vodafone merger was to do what it has always done – cram lots of users through a fixed asset base to raise profits. It hasn’t worked out that way. Selling off the wholesale Fibre Business can be likened to relinquishing a fortress, where the installation of the fibre requires minimal capital and new customers translate to higher margins and earnings, with the capacity for expansion being remarkable. This decision can be interpreted as a demonstration of TPG's weakness, rather than one that emanates from a position of strength. The business cannot sustain an expensive multi-brand strategy as it shifts towards a pure RSP play. Hence abandoning it. The emerging trend of choosing Prepaid mobile over post-paid is reemphasised (MVNO Play). Post-paid ARPU increase primarily from price rise in Jan and Feb

  NBN Co FY 23 Results - Key Takeaways  -- NBN Co’s Revenue has increased by 4% in FY23 and is facing headwinds for increasing the revenue.  CAGR stands at 8.7%. WACC - 3.18% (heading upwards) Has the highest EBITDA margin (68.2%) among telcos globally. Consumer uptake is at a snail's pace with only 40K net additions in the last 12 months.  12.3 Mn customers ready to connect  8.56 Mn are active (30% idle network) 6.64 Mn (78.2%) users are on <= 50 Mbps 2 Mn (24.2%) users < 50 Mbps, 4.52 Mn users on 50 Mbps 1.83 Mn (20.7%) users are on >= 100 Mbps (risen by 2%) 6.6 Mn premises ready for Ultrafast (incl 2.5 Mn on HFC) Poor uptake – only 50-60K has upgraded In all 1.83 Mn users are using Ultrafast (>=100 Mbps) internet. Facing heat from Starlink and 5G providers in remote areas Starlink In Australia > 120K subscribers Sky Muster has declined from 108K to 96.1K In the Enterprise 35K EE SIOs are active.  It seeks to improve its top and bottom line by implementing price i

Exploring the Digital Services Landscape and Opportunities for the Telecom Industry in Australia . Consumer: Financial Services across Insurance, e-commerce and Fintech have an addressable market of > $100 Bn and Telcos are eager to increase their wallet share to the mid-20s.  Enterprise:  The potential for growth in areas like IoT and Smart places is immense, with minimal infrastructure investment required in comparison to 5G.   Private 5G and SD-WAN are currently in high demand across various industries including Mining, Tourism, Energy, Heathcote, and Supply Chain. These verticals are the focus due to their increasing need for advanced technological solutions. My previous post on IT Services Opportunity across the Telecom Industry   

Australia is Lagging in Internet Speed While Price is Going Up.  There are valuable takeaways from New Zealand's fibre optic infrastructure rollout, which boasts faster spee ds and more affordable pricing. Why Australia's Internet services are so expensive compared to other countries. A quick Big Mac Index test reveals why What the Industry Experts Paul Budde, John de Ridder and Bob James are saying  about why Australia is Lagging.  Source: Comms day The NBN Pricing Construct by Tony Eyers is a worthy read to view the four-tiered structure.   AVC - Connection Cost  CVC - Bandwidth or Capacity Cost POI - Connection Cost  POI - One-Off Set-up Fee      Snippet from the note below.  Source: TekTel 

Mapping of Tech Spend and Technology gives a good view of IT spending in 2023 Mapping of Digittal Services across Consumers and Enterprises gives a good view of Telecom spending in 2023 My Other Post on  -"Telecom Industry Australia - Where the Money will be spent in the next two to three years", can be read here .

Starlinks Growing Presence in Australias Telecom Sector and Transforming Connectivity in Remote Areas.  Source AFR : Telstra announced a deal to offer internet and voice calls via Mr Musk’s Starlink service on Tuesday, which uses a constellation of small, lower-orbiting satellites providing faster speeds than the NBN Sky Muster.  Telstra’s broadband deal with Starlink is non-exclusive, meaning the challenger could still pitch its services to NBN. However, Telstra has exclusivity in providing voice call services through Starlink . Optus Deal The second-largest Australian telecommunications company announced a deal on Wednesday that will let users access the internet and make calls on their phones via Starlink’s satellites from late 2025.  Beaming signals from space would also help Optus compete with Telstra’s superior regional tower network. The Optus-Starlink partnership also poses a risk to the NBN Co because the same SIM cards that a phone uses to connect to a satellite could al

How Australian Telcos are Outperforming their Global Peers  Globally telecom players are facing cut-throat competition from various players across Tier 1-3 operators and OTT players, here in Australia there is an Oligopoly of operators across fixed lines and mobile, hence services are expensive and they command better margins on their service. Enterprise Value and Market Cap. of NBN in Jan 2023 - Without deferring the debt of $32 Bn. If NBN is sold today it will get around $24 - $26 Bn and that is less than what govt has infused as equity ($29.5 Bn).   Other Key Points: With the highest EBITDA Margin among the major Telecom Players in Australia keen to know why the wholesale price can't be reduced, esp when govt has deferred $32Bn in debt and in effect, IBL is only for $12 Bn.  With the change in direction of NBN rollout from Economies of Scope to Economies of Scale, NBN will benefit across the value chain. Benefits in terms of pro

Telecom Engagement Model for Private 5G  Key Message  Private 5G is about transforming business operations and driving new revenue opportunities via the application layer.  Telcos are adopting different engagement & deployment models for Private 5G.  An increase in the footprint across the engagement value chain leads to an increase in the complexity but reduces time to market  Jio in India is heading for end-to-end value chain control  The ecosystem is getting more complex as partners are also competitors. Edge Continuum Edge Computing is a decentralised mechanism done at the edge of the network, close to the data source, as opposed to on the cloud or away in data servers.  With the rise of the Internet of Things (IoT) devices more and more smart devices connect to the network, hence businesses are facing demanding and diverse data challenges.  Key Strategies are  Retail – Sell directly to Enterprise  Retail – Sell via Partners like HPS Wholesale - become Wholesale pr

Australia and Indias Internet Speed Ranking  - 2023    Australia and Indias Mobile Speed Ranking  - 2023