Analyst warns Aust telcos to shift focus

Telecomms analyst Paul Budde delivered a stern warning to Australian telco players last week to shift their focus from technology to markets and customer service.

Speaking at the launch of his 1999 Telecommunications Reports, Budde said telcos offering specialised services, such as value-add applications, and focusing on niche markets will be the survivors as the industry evolves over the next three to five years.

Meanwhile, he said, competitive pressures will force Australian telcos to move to new technologies such as code division multiple access (CDMA) and cut call costs, which will put a dent in their financials thus making them vulnerable to acquisition.

"There is no room in the world for national operators the size of Telstra," Budde said, predicting global mergers in Australia and New Zealand within three to five years. The top 12 telcos will merge into six within two to three years, possibly earlier, he said.

In the mobile telecomms arena, Budde said market growth was below expectations due to high call charges, with seven million subscribers expected by year end.

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