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CANADA WEST
TELECOM
GROUP
Report on PTC Hawaii
Pacific Telecom Council’s Annual Conference January 18-23, 2003
CANADA WEST
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PTC Hawaii• 25th annual conference in Hawaii (www.ptc.org). • PTC brings together operators from different regions of
Asia-Pacific to share their experiences• PTC has evolved to include traditional and convergent
telecom technologies, industries and markets. • The annual conference also hosts associated events on
– China Telecom– Pan Pacific Distance Learning– Pacific Island Telecommunications– Pacific TeleHealth
• CWTG members Telos Technologies and Daniels Electronics participated in the show and Convedia, fSona and Norsat sent product brochures for distribution at the CWTG booth.
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Conference Hob-Nobbing
Ind. Cda. Bruce Drake & Dave Fransen S,R&D Minister Rey Pagtakhan
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Conference Topics
• How to Successfully Deploy Telecom/ Broadband Access– China as the success model
– Regulatory, legal, IP issues
• Distance Learning Case Studies– N.B. MIT OpenCourseWare
• Mitigating Business Risk in Dangerous Times– Bandwidth Economics & Project Financing
• Satellite & Submarine Cable systems
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Conference Highlights
• Telecom demand still growing at 7-8% per year
• Internet still adding 5M+ subs per year• May have to work off an ~10 year Telecom
‘overhang’ (over capacity)• Think of Long Distance as free
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How Telecom Is Becoming A Cyclical Industry
Eli M. Noami, Columbia University, USA - Opening Plenary • Cyclicality will be an inherent part of the telecom
sector in the future– not a one-time recovery from a one-time boom and bust
• To deal with such instabilities, companies and investors will seek consolidation and cooperation
• Oligopoly is likely to be the equilibrium market structure– Government, will need to reassess its basic policy
approach that has long been focused on the enabling of competition
• The future network industry will look a lot more like the old telecom industry and less like the new internet
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Drivers of Cyclicality• Demand growth has slowed.• Investment and regulatory lags prevented
adjustment. • Network externalities and lumpiness in
investments amplified the swings. • Economies of scale and network externalities
created strong incentives for growth strategies, at the expense of profitability. Financial markets encouraged this strategy. Managers benefited from it in the short run.
• While expansion made sense for each firm individually, it created a major oversupply in the aggregate.
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Economies of Scale
Capacity Over-Build
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Future Project Finance StructuresRobert W. Stuart, InDepth Financial Advisors LLC, USA
• Project Financiers will look for simplest financing stories, easily understood both in credit approval and syndication process. – e.g. single project builds serving the well-documented needs
of a finite marketplace– with Management “A Teams”
• Regional aggregation or feeder systems will be financed first (when the financial markets again become receptive)
• Bankers may restrict additional borrowings even those structurally subordinated to its own senior secured debt– Only fully funded Business Plans will be secure project debt
funding;
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Heterogeneous Mobile Networks: Getting a WIFI of 3G
Peter Waters, Hong Kong SAR, ChinaBernadette Jew and Rob Nicholls, Australia
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Conference ReportsConference Papers can be viewed/downloaded from www.ptc.org,
user=ptc25, p/w=broadband Reports picked up at the Conference:• CD - The APT (Asia-Pacific Telecommunity) Yearbook 2002• Newsletter - AsiaCom, Dec 2002 - including Asia Broadband
Subscriber Counts• Magazine - Pacific 2003 Alamanac: Global Broadband, Regional
Divides• Journal PTR - Pacific Telecommunications Report, Q1 2002• Journal PTR - Pacific Telecommunications Report, Q4 2002• Workshop Handouts - Paul Weis: Asia's Telecommunications
Markets (Finance outlooks)• Journal - Preston Gates Guide to Telecommunications in Asia (Legal
summary of national markets)• Workshop Handouts - Gilbert & Tobin: IT & Communications
(WiFi, China CATV, Interconnect)• Magazine - Outside Plant, Dec 2002
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Purchased IEC Reports• CD Web Proforum Tutorials Vol. 9, on ATM,
Broadband Access, Optical Networking, SS7, Wireless • CD/HC Annual Review of Communications, Vol 55, 2002• CD/HC Telecom Outlook Report - Executive Analysis• HC only Telecom Outlook Report: Millennial Edition• CD/HC Telecom Outlook Report on Wireless• CD The New Satellite Industry• CD/HC IP Applications & Services 2003• CD/HC IP and the Intelligent Network• CD/HC The Business of Broadband: Access & Applications• CD/HC Broadband Access and Services in the Local Loop• CD/HC Operations Support Systems 2002• HC only Knowledge Management for the
Telecommunications Industry
* Additional IEC Reports available at 50% of list price
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Trade Show• Conference Attendance was down ~20% from
last year; down 30% from peak in 2001– 1,800 in 2001 1,500 in 2002 1,200 in 2003
• Trade show participation down by similar factor
• Most significant change is reduced participation by larger vendors and carriers– smaller presence and delegations
• But exhibitors still reported making the senior-level contacts the conference is renown for
• PTC also has an aging membership problem
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Trade Show
Layout
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Booth Setup
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Business Results
• In general, there was stronger interest in products offering incremental expansion of, or new services on, existing networks, such as IP Telephony, than in new network builds.
• ~40 contacts, 6 leads (for Convedia)• As for the past year, vendors with business in
China reported good results.Also reports of smaller networks in emerging regions such as Africa and the Pacific.
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