Portugal Telecom covers 100% of the country with broadband
Friday, October 28, 2005
Telecommunications connect people from all continents. This element served as theme for the edition of FLEIT 2005, which is taking place on 27th and 28th October in Lisbon. At this event, Miguel Horta e Costa, Executive Chairman of the PT Group made a first-hand announcement of the coverage of 100% of national territory in broadband terms.
The importance of telecommunications in countries and regions in which they are present favouring clients, co-operators and society in general brought to Lisbon the third edition of Forum Luso-Espanhol de Inovação em Telecomunicações (FLEIT) – Luso-Spanish Forum for Innovation in Telecommunications. This is an initiative of the Luso-Spanish Foundation organised together with Telefónica and Portugal Telecom under the theme “The internationalisation of telecommunications”.
Ernâni Rodrigues Lopes, Chairman of the Luso-Spanish Foundation said that the theme is “an example of turning point and re-establishment of strength” within the sector. As enhanced “telecommunications are a superficial factor within the world economic system of the third globalisation, resulting from the integral mobility of information”. Giving the example of PT and Telefónica, the Chairman of the Luso-Spanish Foundation stated that the “telecommunication companies that could afford a starting point, seek internationalisation as an answer to the new market situation”.
For the future in the world economy of telecommunications, Ernâni Rodrigues Lopes considers that the internationalisation process “can present two outcomes with deep incidence on operators’ structure”. On the one hand “the operations’ field outside origin economy will no longer be seen as an extension of the origin field”. On the other hand as a consequence “the international component is no longer an appendix and will become the main reference in which the origin field is yet another component although with special relevance”. A general rearrangement of the positions of current operators, that will imply, according to Ernâni Rodrigues Lopes, “the formation of national or foreign corporate structures of operators, with the continuous loss of relevance by smaller local operators with no international dimension”.
New PT Inovação technology takes broadband to areas of less populational density
Miguel Horta e Costa presented Broadband as a fundamental pillar in the construction of the Information Society and highlighted the existence of four base conditions deemed necessary to reach the generalisation of broadband. They are: coverage of national territory; prices; info-education and the penetration of PCs, in which Portugal Telecom assumed an active participation.
An effort which led to the definitive fall of the first obstacle. It was here that Miguel Horta e Costa, the Executive Chairman announced that Portugal Telecom is going to render available, until the first quarter of 2006 coverage of 100% of national territory in broadband terms, thus eliminating the first obstacle for the stabilisation of broadband within national market. Any house within national territory, however distant it may be, will be able to access broadband. “Every single house will have a window open to the world. It is more than 10 million people, 26 900 localities, 561 towns and 141 cities with broadband access. We are the third European country, following Holland and Belgium, to accomplish this historical mark, which clearly expresses the effort and mobilisation of Portugal Telecom in this ambitious project”, states Miguel Horta e Costa.
The PicoDSLAM8 technology developed by PT Inovação and which will allow the coverage of broadband Internet in areas of less populational density was a determining factor in the accomplishment of this objective. An important project not only for the country but also for export. “This is a network of broadband highways for individuals that will cover via ADSL the most distant and rural areas”, he stated. This is innovative equipment at world level that places Portugal Telecom once again in the leadership of Innovation. Similarly to what happened in the 60s with the complete automatisation of the telephone network, when Portugal was pioneer at European level, now thanks to the Innovation of Portugal Telecom, the country will be one of the first at European level to render available 100% broadband access to its citizens. “The fact of being constantly in the field, through initiatives such as the recent PT Escolas, seeking to understand and getting to know better the profile and needs of the Portuguese led us to the accomplishment of this project. We are thus aware that in addition to the commercial dimension this is an achievement of unequal social importance and dimension”, adds the Executive Chairman.
Throughout the last decade, Portugal Telecom invested more than three billion euros in this development pillar of the Information Society.
Following the challenge of the broadband coverage, Miguel Horta e Costa highlighted another challenge: to place a PC in each and every house. “We must endeavour to attain the level of homes with computers of the European countries”, he says.
Telefónica: Accelerates to become leader
Accelerate to become leader was Telefónica’s motto for this presentation. Luís Lada, Director-General of Telefónica presented the internationalisation theme as a vigorous factor within the telecommunications sector. This importance is visible in the fact that 45% of earnings come from outside the original market of said operator. Approximately two-thirds of the operator’s clients are already outside Spain.
The internationalisation process was adapted to each market where Telefónica is present with a competitive advantage. “The dimension reached in the last 15 years has been a critical factor for our competitiveness, allowing investment in a technology which will afford a policy of constant reduction in prices.
The international dimension of Telefonica is also illustrated in its presence in various stock exchanges. In Madrid, admitted approximately 80 years ago, in Tokyo, New York, Frankfurt, Lima, São Paulo, amongst others.
Luís Lada highlighted the cooperation between Portugal Telecom and Telefónica within the Brazilian market, stating that they form an indisputable leader within the mobile market in that country with the Vivo brand.
The purchase of Cesky Telecom, the Check operator is an example of the incorporation of operations with growing potential, as well as the strategic alliance with China Netcom that intends on making Telefónica the perfect bridge between China and the telecommunications sector in Latin America. Note that Telefónica has already invested over 30 million euros in infrastructures in Latin America. In 2004 the Spanish operator applied a total of 461 million euros in investigation and development, 23% of the investment in I&D of all the Spanish IT sector and 22% of the total investment of the sector in innovation.
PT and Telefónica are an example of what Portugal and Spain can do together.
Portuguese and Spanish economies are interdependent in terms of investment and exports. The Iberian market is many times referred to as a natural market which according to Álvaro Alabarte, member of the Spanish government, “shows this integration capacity”. Currently some 3000 Spanish companies are operating in Portugal and there are over 300 Portuguese companies in Spain.
He adds that, “there is a field in which both can do more and that is in the triangulations in other markets which Telefónica and PT already carry out in Brazil and North Africa”. Álvaro Alabarte sets the challenge of a new shared adventure in the tourism sector. He reminds that in 2004, 5.5 million Spanish tourists visited Portugal and over two million Portuguese visited Spain.
Telecommunications are the new paradigm of future economy
Mário Lino, Minister of Public Works, Transport and Communicatons, presents telecommunications as the pretext for the new paradigm of future economy, highlighting the importance that the national executive attributes to innovation in the development of both countries and in which Telefónica and Portugal Telecom play an active role. “Today we are living an historical moment in the bilateral relations between Portugal and Spain”, he states. Telecommunications are living a radically new phase in their evolution and broadband is playing a fundamental role in the democratisation of the Information Society. Mário Lino also highlights the emergence of disruptive Technologies that appear with new business models such as Broadband, VoIP, Wi-Max and Casa do Futuro (Future House).
According to the minister, the new paradigm is to position the client as the main business objective instead of the access technology.
PT II: New logic for internationalisation processes
The internationalisation challenge for the Portugal Telecom group and the perspective of economy in an I&D and investment logic were presented by the Executive Chairman of PT Investimentos Internacionais and the Executive Director of the Portugal Telecom Group, Carlos Vasconcellos Cruz. In the latter’s opinion an organisation cannot be founded only in the mother country and it cannot be tempted into exporting the models of the mother house to other places.
“This is wrong and it corresponds to the past phase of international companies. The logic of competitiveness is no longer according to dimension but according to an economy of know-how”, he says. Carlos Vasconcellos Cruz illustrates this theory with the emergence of the VoIP technology which “will bring know-how and rendered services to clients”.
International markets play a crucial role in the development and gathering of experiences pertaining to new technological developments. The PT II chairman states as an example the Group’s operation in Timor (Timor Telecom), where traditional telephony business cannibalisation via VoIP is already felt.
The mother head office is yet another concept that according to Carlos Vasconcellos Cruz, is to be extinct and replaced by competency centres set in various locations. This concept has already been incorporated by Portugal Telecom in cases such as the pre-paid platforms (Aveiro), Call Centers (São Paulo), Triple Play (Cape Verde) and Location Based Services (Beijing).
These factors assume great relevance now that a large part of the PT Group business in its base market is in its maturity or saturation phase. “To develop competitive advantage implies growing outdoors. This affords PT II a fundamental strategic function in the Group’s future growth potential”.
As pertains the next two steps in the internationalisation strategy, the Executive Chairman of PT II highlighted the Brazilian, African and Chinese markets as the main locations to support the Group’s growth strategy.
To conclude, Carlos Vasconcellos Cruz explains that internationalisation has been a key element in the strategy for value creation and affirmation of PT as the main Portuguese corporate group. And to demonstrate this is the number of clients that increase from 6 million in 1988 to 37 million in 2004, as well as the earnings that rose from three billion euros in 1988 to six billion in 2004.
Internationalisation as a source of growth for Telefonica
António Castillo, deputy director general for innovation at Telefonica, presented the internationalisation factors for Latin America. Amongst these, highlight goes to the appealing dimension (500 million people), the mature Spanish market and the high growth potential, the language, the cultural proximity and technological capacity, that have made Telefónica the largest private investor of that region.
This internationalisation has allowed Telefónica to acquire the know how that defined itself in an integrated multinational group culture.
The acquisition of the BellSouth operators strengthened leadership in Latin America and at world level. In the ranking of mobile operators measured in terms of clients, Telefónica occupies the fourth position with 91 million clients. Telefónica represents, in average, 1.8% of GNP of the main groups in which it operates.
These elements according to António Castillo, demonstrate that “internationalisation is a source of opportunities for the Telefónica Group”.
 
 
 
 
|