Wednesday, 29 February 2012
Monday, 27 February 2012
Where to for public mail operators?
Postal operations around the world are facing the same issues - declining revenues as letter mail is replaced by online mediums and underutilised labour forces that are legacies of more manual operations.
Two mail operators have recently showed how they plan to reshape themselves in the new era. Canada Post has stated that it is looking towards e-commerce and Australia Post has appointed an ex-Telco executive to run a newly created e-commerce division.
The CEO of Australia Post also noted that it's not his entire business that's in decline. The volume of parcels handled is in fact increasing, largely thanks to a boom in online shopping. Looking deeper into the market it appears that this may be the result of temporary phenomena - imported goods of less than $AU 1000 in value are exempt from local sales tax (quite a high value) and the Australian dollar has been exceptionally strong (equal with the USD). Last year, retailers pressured the Government on the value of the exemption such that it tasked its independent economic think-tank to conduct a review of the market. Ominously the Productivity Commission judged that there were "strong principle grounds for the LVT [low value tax] to be lowered significantly, to promote tax neutrality with domestic sales".
However, if we remove these external factors from the analysis by looking specifically at national parcel deliveries, we find that parcels are still likely to be a strong performer. Looking to the UK, a country in which retailers have a well developed online presence, we see that Ofcom believes that eight in ten internet users ordered goods online in 2010 (which also happened to be the highest usage of any other European country).
I believe that the most valuable strategic lever for the postal sector may be the relationships with the retailers themselves. That this, the acquisition of exclusive arrangements to deliver goods for specific retailers, akin to the fight for content in the telecoms space. This would be a neat fit, especially as the incumbent postal operators tend to have an uncanny ability to deliver anywhere, a feat most private operators would struggle to match.
Thanks to their unparalleled end-to-end reach the national incumbent postal operators still own a very valuable asset. The question is whether they can they reduce their fixed costs and re-invent themselves in time before the competition moves in.
Two mail operators have recently showed how they plan to reshape themselves in the new era. Canada Post has stated that it is looking towards e-commerce and Australia Post has appointed an ex-Telco executive to run a newly created e-commerce division.
The CEO of Australia Post also noted that it's not his entire business that's in decline. The volume of parcels handled is in fact increasing, largely thanks to a boom in online shopping. Looking deeper into the market it appears that this may be the result of temporary phenomena - imported goods of less than $AU 1000 in value are exempt from local sales tax (quite a high value) and the Australian dollar has been exceptionally strong (equal with the USD). Last year, retailers pressured the Government on the value of the exemption such that it tasked its independent economic think-tank to conduct a review of the market. Ominously the Productivity Commission judged that there were "strong principle grounds for the LVT [low value tax] to be lowered significantly, to promote tax neutrality with domestic sales".
However, if we remove these external factors from the analysis by looking specifically at national parcel deliveries, we find that parcels are still likely to be a strong performer. Looking to the UK, a country in which retailers have a well developed online presence, we see that Ofcom believes that eight in ten internet users ordered goods online in 2010 (which also happened to be the highest usage of any other European country).
I believe that the most valuable strategic lever for the postal sector may be the relationships with the retailers themselves. That this, the acquisition of exclusive arrangements to deliver goods for specific retailers, akin to the fight for content in the telecoms space. This would be a neat fit, especially as the incumbent postal operators tend to have an uncanny ability to deliver anywhere, a feat most private operators would struggle to match.
Thanks to their unparalleled end-to-end reach the national incumbent postal operators still own a very valuable asset. The question is whether they can they reduce their fixed costs and re-invent themselves in time before the competition moves in.
Friday, 24 February 2012
UK broadband rollout
Intriguing map of the new NGA network from Point Topic. First time that I've seen BT's rollout presented geographically.
The map shows NGA coverage as at the end of 2012 with approximately 35% of the UK population covered.
The map shows NGA coverage as at the end of 2012 with approximately 35% of the UK population covered.
Thursday, 23 February 2012
How to win and then lose public favour
It was an interesting couple of weeks in the EPL with Luis Suarez returning to the field for the first time since his 8-match ban. The controversy began with the (lack of) pre-match handshake. Regardless of what one may have felt before the game, it would be fair to say that at this point public opinion clearly shifted in favour of Evra.
However this was not the end. After the final whistle Patrick Evra decided to settled the score by hovering around Suarez, celebrating the win and wildly gesturing for support from the crowd. Suarez didn't take the bait but the referee thought it this was a bit too much and moved Evra away.
Now at the end of the game one could take the view that 2 relatively equal wrongs occurred - unsporting behaviour and enticing the crows - and so neither player left the field looking particularly honourable. However, the key message is that the following day one of these parties apologised for their actions, and that was Suarez.
Regardless of who was right or wrong on match day, or even in the previous incident, it was a smart move by Liverpool to publicly apologise afterwards. A good PR team realises that a strong and prompt apology can go a long way to taking the heat out of even the most difficult situation, potentially even shifting the balance of power. Too many organisations fail in their crisis management strategy.
In most cases prompt and direct response is the best course of action, even so far as to say that it's better to act quickly and make a mistake than to fail to act until it's too late (or, the delay makes your ultimate response meaningless). The risk from delaying a response, even if it is in the interests of seeking clarity on the issue, is that in the absence of information the public will make their own conclusions. In this void fear and doubt can swiftly shift the public's opinion in a very negative direction. At the same time it would be naive to hope that your issue will be passed by. There are very few secrets in public life. Take the approach from the start that it will 'come out in the wash' some time in the future. Not even a super injunction is secure.
The ability to come out on top in a PR crisis situations is therefore a function of speed - speed of decision making and action. Far better to be on the front page for a day than part of a week-long scoop.
(In the end the Football Association took no action against either player)
Tuesday, 21 February 2012
Low tech still has a role to play
SMS (or 'text' as termed in some countries) is still going strong despite the proliferation of alternative forms of communication. As a short list of alternatives would at least consist of skype, twitter, email, instant chat, facebook, linkedin and then 'normal' voice calls.
In the face of this apparent competition, according to Ofcom the volume of SMS sent around the world is still increasing year-on-year above natural growth (population related), even in mature markets.
No doubt price-related factors have an effect on consumers' willingness to text, especially the incidence of bucket and unlimited-use plans which have shaken up the market over the last 5 years.
However, retail prices are in fact still relatively high in most jurisdictions. Benchmark retail price data from BEREC illustrates that in the EEA at least prices are actually relatively high across most of Europe which ensurers they are a revenue bonaza for the operators:
There's clearly something to be said for the personal touch and accessibility of plain old SMS which modern forms of communication have been unable to supersede. Old doesn't always mean out of date.
In the face of this apparent competition, according to Ofcom the volume of SMS sent around the world is still increasing year-on-year above natural growth (population related), even in mature markets.
No doubt price-related factors have an effect on consumers' willingness to text, especially the incidence of bucket and unlimited-use plans which have shaken up the market over the last 5 years.
However, retail prices are in fact still relatively high in most jurisdictions. Benchmark retail price data from BEREC illustrates that in the EEA at least prices are actually relatively high across most of Europe which ensurers they are a revenue bonaza for the operators:
There's clearly something to be said for the personal touch and accessibility of plain old SMS which modern forms of communication have been unable to supersede. Old doesn't always mean out of date.
Monday, 20 February 2012
Incentivise me
Today I got a note in the mail informing me that my gym membership is going to increase by 5%. This got me thinking about the business model that underpins gyms...
The gym owner has a high fixed-cost (equipment, building rent) and therefore needs to sign up a lot of members to cover these costs.The best case outcome for an owner is that a high proportion of members are casual users (in terms of attendance), even up to the point of being non-users. This means that there will be less over-crowding (better 'customer experience') and, potentially, lower O&M costs (reduced wear and tear).
Under this 'traditional' model the fact that a proportion of members don't actually use the gym keeps the business afloat. At the same time such 'non-use' is quite costly for the gym member, both in terms of finance (money spent, opportunity cost) and health.
A group of students at Harvard have approached this issue from the perspective of motivation by applying principles drawn from behavioural economics. They set up an experimental company called Gym-Pact where members to pay fees according to the gyms sessions they don't attend. Under this scheme gym members agree to a visit schedule that states how many days a week they will exercise. They then set a monetary fine that they will pay if they miss a session. Gym-pact suggest a minimum fine of $US 5 per day missed and there is some leniency for sickness.
According to the their website the scheme has been successful, at least from the perspective of getting people to go to the gym, with 90% of users keeping to their gym schedule.
On the business model side it's unclear whether this concept is sustainable without significant tweaking. Putting aside how the fines are distributed (at the moment they are handed over to the gym's themselves and so there is little in it for Gym-Pact themselves other that the experiment), if everyone went to the gym then there would be much less of a revenue stream. Regardless, it's healthy food for thought about the power of incentives.
Wednesday, 15 February 2012
At least they're trying to clear up the mess
After the drama that was the Indian 2G spectrum auctions the Government is trying to pick up the pieces and define a path forward.
2G-only operators will be a little concerned about what will happen to their spectrum investments and whether they will continue to have viable businesses. The rest of the sector will take some comfort from seeing terms such as transparency and consistency associated with the policy process.
It would be very easy to be critical of the regime but, before you do, don't forget the size of the market. According to the TRAI's most recent report there us somewhere around 600 million active mobile subscribers across the 22 states. That's a huge governance responsibility for any organisation, let alone a single department in an emerging country, closely flanked by well-resourced operators.
Full credit to the administration for trying to draw a line in the sand, learn from their mistakes and put in place a more robust framework to support the future development of the sector.
The only real mistake is the one from which we learn nothing ~ John Powell
2G-only operators will be a little concerned about what will happen to their spectrum investments and whether they will continue to have viable businesses. The rest of the sector will take some comfort from seeing terms such as transparency and consistency associated with the policy process.
It would be very easy to be critical of the regime but, before you do, don't forget the size of the market. According to the TRAI's most recent report there us somewhere around 600 million active mobile subscribers across the 22 states. That's a huge governance responsibility for any organisation, let alone a single department in an emerging country, closely flanked by well-resourced operators.
Full credit to the administration for trying to draw a line in the sand, learn from their mistakes and put in place a more robust framework to support the future development of the sector.
The only real mistake is the one from which we learn nothing ~ John Powell
Tuesday, 14 February 2012
Cost of living data released
According to a study released by The Economist the 10 most expensive cities in the world are currently (in order):
1. Zurich (Switzerland)
2. Tokyo (Japan)
3. Geneva (Switzerland)
4. Osaka Kobe (Japan)
5. Oslo (Norway)
6. Paris (France)
7. Sydney (Australia)
8. Melbourne (Australia)
9. Singapore
10. Frankfurt (Germany)
Usual suspects take up most places but Australia's two listings are a little left field. Amazing what a mining boom will do.
Full report available here.
1. Zurich (Switzerland)
2. Tokyo (Japan)
3. Geneva (Switzerland)
4. Osaka Kobe (Japan)
5. Oslo (Norway)
6. Paris (France)
7. Sydney (Australia)
8. Melbourne (Australia)
9. Singapore
10. Frankfurt (Germany)
Usual suspects take up most places but Australia's two listings are a little left field. Amazing what a mining boom will do.
Full report available here.
Friday, 10 February 2012
No connection without juice
In some places getting a phone is only half the battle. This little piece of equipment could transform the lives of many who have a phone but no power at home to charge it.
Thursday, 9 February 2012
IP protection is not as international as you may think
Apple is facing a patent challenge in China over the use of the "ipad" product description.This will be a little tough for the company to swallow given the proliferation of copy-cat products in the local market. Consumers (gullible tourists) even have the the ability to purchase their very own iPhone 6. Although to be fair to the unfortunate purchasers of such devices as it can be reasonably difficult to detect the authenticity of less far-fetched replicas, apart from their rock-bottom price.
One may think that companies would be afforded protection under IP rights however it's not so clear cut. In reality there appear to be no international patent laws to support 'global' patent rights. The best that businesses can hope for is protection under the umbrella of a WTO framework.
But that's not the end of the story. Setting aside the likely (or unlikely) enforceability of any such WTO-created rights, a company may still be without a case to begin with as there plenty of countries with exemptions from the general framework under what is termed TRIPS (trade-related aspects of intellectual property rights) agreements.
Certainly not easy to protect what you create.
One may think that companies would be afforded protection under IP rights however it's not so clear cut. In reality there appear to be no international patent laws to support 'global' patent rights. The best that businesses can hope for is protection under the umbrella of a WTO framework.
But that's not the end of the story. Setting aside the likely (or unlikely) enforceability of any such WTO-created rights, a company may still be without a case to begin with as there plenty of countries with exemptions from the general framework under what is termed TRIPS (trade-related aspects of intellectual property rights) agreements.
Certainly not easy to protect what you create.
Wednesday, 8 February 2012
The old girl leads sales but that's about it
Nokia still leads global handset sales followed by Samsung and then Apple....
However in terms of profit it's a very different league table...
Clear opportunity for improvement and it appears that Microsoft are acutely aware of that potential.
However in terms of profit it's a very different league table...
Clear opportunity for improvement and it appears that Microsoft are acutely aware of that potential.
Tuesday, 7 February 2012
Time to better define the rules of the content game
A big decision down-under with the Federal Court ruling that Optus mobile could record and then transmit TV services to their customers. Seems innocuous enough, but, Optus hadn't paid for the rights to the sports content that it was transmitting.
The operator that held most of the rights (Telstra) has appealed the decision with strong support from the sports' administrative bodies. The lobbying process has also begun in earnest and it appears the Government is minded to alter the legislation to extinguish Optus' claim.
This initially raises a question around the role of Government and whether it is appropriate for it to be changing the rules retrospectively - it could be argued that Optus’ product was innovative competition. However the bigger issue is perhaps whether it is reasonable to tie up content with a single provider?
Parallels can be drawn between Optus TV and ongoing hearing in the EU over the viewing of sport on alternate feeds. In the later case a British publican was alleged to be circumventing Sky's control over EPL broadcasting rights by utilising a Greek satellite feed to televise live football. The European Court of Justice is now testing whether it is appropriate for rights holders such as the Premier League to legally license their content on a country-by-country basis.
In both disputes it is clearly important that Government (and the Courts) play a role by protecting property rights. At the same time there is an equity issue at play around whether it is reasonable (or efficient) for content to be allocated to single providers.
In the world of wireless spectrum Governments realise that there needs to be a balance amongst the outcomes and benefits (public/private). Whilst trying to extract every last drop of value from spectrum auctions they also ensure that there are limits to the total amount of bandwidth that can be held by an operator.
In the digital age maybe it's about time that broadcasting regulations were similarly thought through.
The operator that held most of the rights (Telstra) has appealed the decision with strong support from the sports' administrative bodies. The lobbying process has also begun in earnest and it appears the Government is minded to alter the legislation to extinguish Optus' claim.
This initially raises a question around the role of Government and whether it is appropriate for it to be changing the rules retrospectively - it could be argued that Optus’ product was innovative competition. However the bigger issue is perhaps whether it is reasonable to tie up content with a single provider?
Parallels can be drawn between Optus TV and ongoing hearing in the EU over the viewing of sport on alternate feeds. In the later case a British publican was alleged to be circumventing Sky's control over EPL broadcasting rights by utilising a Greek satellite feed to televise live football. The European Court of Justice is now testing whether it is appropriate for rights holders such as the Premier League to legally license their content on a country-by-country basis.
In both disputes it is clearly important that Government (and the Courts) play a role by protecting property rights. At the same time there is an equity issue at play around whether it is reasonable (or efficient) for content to be allocated to single providers.
In the world of wireless spectrum Governments realise that there needs to be a balance amongst the outcomes and benefits (public/private). Whilst trying to extract every last drop of value from spectrum auctions they also ensure that there are limits to the total amount of bandwidth that can be held by an operator.
In the digital age maybe it's about time that broadcasting regulations were similarly thought through.
Monday, 6 February 2012
Mobile first, TV second
ESPN are leading the way in adapting content provisioning to the digital age by designing their website based on a 'mobile first' mentality. Forgetting about the content itself per se', this is a useful strategic insight for all content providers, especially those in emerging markets.
For the middle-income consumers mobiles tends to be a supplementary device amongst a clutter of other 'enabling technology' choices including laptops, pads, readers and even the humble television.
However in many parts of the world mobile phones are more prevalent that other device. Take Sub-Saharan Africa for example. Although the ownership of television sets is rising year on year, even if we look forward to 2017 it will still be the case that less than two-thirds of the population will actually own one. Yet mobile penetration is already above 50% and closer to 100% for all but a few African nations.
Part of the reason for the choice of mobiles above other devices will likely be wealth, however part of it is simply due to technology choice.
5 years ago Vodafone picked-up on the unique role that mobiles have in people's lives when they combined with other parties to introduce M-Pesa mobile payments. The system cleverly circumvented the unique bottlenecks hindering the the developing world (persons with no fixed address, poor record-keeping) which had previously impeded the growth of more traditional financial transactions based on debit and credit cards.
Back in the developed world things aren't all that different. Mobile phones have evolved well beyond 'supplementary' and now seen as utterly compulsory.
The message is clear - all around the globe we are moving towards a mobile-centric environment.
Most organisations are acutely aware of the importance of having an on-line presence. Even the local butcher now has a site. In the modern world if there is no home-page to review then you simply don't exist. Yet technology doesn't pause long and with the prevalence of Facebook and Twitter, presence in these forums is quickly becoming standard practice as well.
However behind all of this social networking noise it is important to recognise that mobile devices will be the enabler. We are moving towards a mobile-centric environment and businesses that base themselves around this core will be set to benefit.
ESPN is making sure we can enjoy its services on the small screen - customers need to be able to utilise your service as well.
For the middle-income consumers mobiles tends to be a supplementary device amongst a clutter of other 'enabling technology' choices including laptops, pads, readers and even the humble television.
However in many parts of the world mobile phones are more prevalent that other device. Take Sub-Saharan Africa for example. Although the ownership of television sets is rising year on year, even if we look forward to 2017 it will still be the case that less than two-thirds of the population will actually own one. Yet mobile penetration is already above 50% and closer to 100% for all but a few African nations.
Part of the reason for the choice of mobiles above other devices will likely be wealth, however part of it is simply due to technology choice.
5 years ago Vodafone picked-up on the unique role that mobiles have in people's lives when they combined with other parties to introduce M-Pesa mobile payments. The system cleverly circumvented the unique bottlenecks hindering the the developing world (persons with no fixed address, poor record-keeping) which had previously impeded the growth of more traditional financial transactions based on debit and credit cards.
Back in the developed world things aren't all that different. Mobile phones have evolved well beyond 'supplementary' and now seen as utterly compulsory.
The message is clear - all around the globe we are moving towards a mobile-centric environment.
Most organisations are acutely aware of the importance of having an on-line presence. Even the local butcher now has a site. In the modern world if there is no home-page to review then you simply don't exist. Yet technology doesn't pause long and with the prevalence of Facebook and Twitter, presence in these forums is quickly becoming standard practice as well.
However behind all of this social networking noise it is important to recognise that mobile devices will be the enabler. We are moving towards a mobile-centric environment and businesses that base themselves around this core will be set to benefit.
ESPN is making sure we can enjoy its services on the small screen - customers need to be able to utilise your service as well.
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