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Viodi View Menu<\/strong><\/p>\n Current Issue<\/a> Fiber to the Dorm<\/a> Predicting the Future of Telcos<\/a> <\/p>\n Previous Issue<\/a> <\/p>\n Viodi View Subscribe<\/a> <\/p>\n Viodi Forums<\/strong> Club Viodi<\/a> Local Content<\/a> <\/p>\n Multimedia Search <\/a> <\/p>\n Viodi Workshops<\/strong> Local Content<\/a> Telco Video 101<\/a> Incremona Training<\/a> <\/p>\n Industry<\/strong> Industry Calendar<\/a> Favorite Links<\/a><\/p>\n About Viodi<\/a> Contact<\/a> Biographies<\/a> <\/p>\n Interested in Sponsoring the Viodi View? Send an email to: sponsor@viodi.com<\/strong><\/p>\n Please forward<\/strong> this free publication to anyone you know who is involved in some way with independent telephone companies. <\/p>\n Mission of the Viodi View:<\/strong><\/p>\n In this on-line publication, we share our analysis, opinions and direction on the interactive television news and views that we believe will be of interest and use to our friends associated directly or indirectly with independent telephone companies. For more information as to the various ways Viodi works with independent telephone companies, please go to http:\/\/www.viodi.com\/alliance\/<\/a><\/p>\n Disclaimer:<\/strong><\/p>\n The Viodi View [Viodi, LLC] and its associates used their best efforts in collecting and preparing the information published herein. However, the Viodi View [Viodi, LLC] does not assume, and hereby disclaims, any and all liability for any loss or damage caused by errors or omissions, whether such errors or omissions resulted from negligence, accident, or other causes.<\/p>\n All displayed trademarks, logos and service marks are the property of their respective owners. \u00a9 2005Viodi, LLC<\/a>. All Rights Reserved. Viodi View Newsletter – August 17th, 2005 <\/strong> <\/p>\n Predicting the Future of Telcos<\/strong><\/p>\n By Ken Pyle, Viodi, LLC<\/strong><\/p>\n Industry Telephone\u2019s Delbert Wilson<\/strong> set the tone of the TSTCI Futures Retreat<\/strong> with his invocation that asked for guidance as to how he and his telco colleagues can improve service<\/strong> for their customers. This dedication to the customer and community is such a refreshing change from the short-term view that permeates so much of the business environment. So, it was appropriate that Bob Treadway<\/strong>, President of Futuretrends<\/strong>, provided a framework for telcos to develop long-term strategic plans. <\/p>\n Treadway uses a methodology that is based on what he calls a \u201ccone of uncertainty<\/strong>.\u201d This approach does not attempt to create specific predictions. Instead, the \u201ccone of uncertainty\u201d leverages the uncertainty<\/strong> associated with the future by accounting for different scenarios that could happen. The further out in time that one looks, the more possible scenarios there are and the more difficult it is to predict which scenario will actually happen.<\/p>\n Treadway suggests that as the future turns to the near-term, plans can be adjusted <\/strong>to meet whatever scenario unfolds. He suggested that front line employees are good sources for helping to develop the scenarios. He emphasized the importance of having good communication channels<\/strong> to get input from employees and customers to help develop future scenarios and drive innovation.<\/p>\n He prescribed innovation<\/strong> as the way a company can turn their plans into action and prevent their products from turning into commodities or, as Treadway put it, moving to the \u201cultimate value poin<\/strong>t\u201d. The ultimate value point is that point where the product has essentially become a commodity<\/strong>. <\/p>\n Treadway pointed out that ultimate value point is great for the consumer, but, using the airline industry as an example, it can be devastating for the suppliers\u2019 ability to make a profit. Treadway emphasized that innovation<\/strong> is required in all parts<\/strong> of an organization<\/strong>, including process, customer service and product features in order for an organization to remain competitive and viable. <\/p>\n Treadway further suggested that, \u201cInnovation comes from experimentation, talent, management and implementation.\u201d He reminded the audience that the, \u201cSolutions lie within your organization<\/strong>.\u201d He highly recommended finding ways to tap the hidden talent and knowledge that exists within an organization to foster an innovative climate. <\/p>\n Is Telecom a Good Investment? <\/strong> <\/p>\n Frank Gallagher suggested that investors are still scared of the telecom market<\/strong>. The prevailing thought is that, \u201cTelecom \u2013 great for the consumer, terrible for the investor.\u201d His data showed that the RBOC, IOC and Cable MSO sectors are valued at 6.4, 7.1 and 10.4 times EBITDA. He suggests that over time these valuations will tend to converge with the most likely scenario that cable\u2019s valuations will drop. <\/p>\n Further, he suggested that telcos are splitting into two camps<\/strong> characterized as \u201cTriple Play Implementers<\/strong>\u201d (e.g., SBC, Verizon, SureWest, WVT) and \u201cFree Cash Flow Generators<\/strong>\u201d (e.g., Valor, Fairpoint, Iowa Telecom, Citizens, Madison River). The Triple Play Implementers tend to be in areas which have more competition, while the Free Cash Flow Generators tend to be in rural areas. The Free Cash Flow Generators, such as Valor, are even employing the as old school utility trick of guaranteeing a dividend<\/strong>. <\/p>\n One of the other financial tidbits, which should be of great interest to any independent telco<\/strong> that is butting up against a larger telco\u2019s underserved rural operations, is the challenge these larger telcos face in selling off systems. It is just too much of a hassle<\/strong> for these larger entities to sell small properties on a piecemeal basis. The marginal cost of keeping these properties is quite low (since most of the operational overhead is already absorbed nationally), but the price they require is still quite high. The take-away is that is it is probably better to overbuild<\/strong> than to even try to buy, as you will get new plant. But, if you do try to buy, Gallagher suggested the consortium approach, so enough subscribers can be aggregated to interest the larger telco. <\/p>\n Back to Top<\/a><\/p>\n Previous Issue<\/a><\/p>\n Viodi View Subscribe<\/strong><\/p>\n Network PVRs Are Desired, But Operators Have Doubts<\/strong><\/a> <\/p>\n Click Here to Get the Report<\/strong><\/a> <\/p>\n IP Video @ SC What You Missed<\/strong><\/p>\n
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