Monday, February 05, 2007

KPN will shut down PSTN in 2010 - The Interview 

The interview Eelco Blok gave to the "Wirtschaftswoche" (in German) has been translated already in English by D.H van der Woude (see below).

What is interesting here is that KPN goes a different path here then Deutsche Telecom:

Mr Blok further implies that KPN has reached an understanding with OPTA that the network
will be open from day one. And he says in quite clear terms that KPN does not agree with
DTAG that there should be a regulatory holiday.

However, last week OPTA published a study by Analysys that concludes that the result of
KPN's All-IP net quill be that even its largest competitors will end up with no business case.

Which would mean that KPN's open network only will used by... KPN.

The translated interview:

‚ÄěComplete switch off "

Eelco Blok, board member at the Dutch market leader KPN, in an interview over radical fixed net reconstruction and new Internet competitors.

WirtschaftsWoche: Mr. Blok, have you already cried today?

Eelco Blok: Why should I?

The day moves closer, when KPN will shut down the old telephone network, their implicit basis of contracts in the past 100 years.

(laughs) much more I mourn the customers we lose to the competition. In order to stop the customer decrease, we not only must completely change our net, but also the enterprise with all its coworkers.

Is the old telephone network is no longer good enough, in order to develop new products for the customers?

In the future we can exist in the competition only if we offer with greatest possible bandwidth offer the entire product spectrum from VOIP up to IPTV to our private and business customers. This functions only in an ultramodern fixed net, which only uses IP to transmit. In the year 2010 we want to switch off the traditional telephone network completely. In order to guarantee data transmission rates from 30 to 50 megabit per second, we must everywhere in the Netherlands roll out glass fiber to the street corner. For the coming three to five years this suffices to be competitive.

Is such a megaproject worthwhile?

We made additional means available to a level of 1,0 to 1.5 billion euro until 2010. Perhaps we will supplement these investments. A large part of these means originates from the sales of buildings, in which we house our today's switching centers and that we will not need any longer. At the same time our costs can be lowered significantly. The new net needs less technicians. Until 2010 we want to ax 8,000 jobs. Those are 50 per cent of our fixed net workers.

Deutsche Telekom makes the billion-investment dependent on a Regulatory Holiday and wants to force that the competition does not get an entrance to the new high-speed net.

We pursue a completely different strategy. It is clearly in the interest of all to open the new net immediately for the competition. We have aready reached an understanding with the Dutch Regulatory authority. Alternative fixed net companies can share the new net immediately. Thus we are on a line with the European Union commission.The real profiteers are nevertheless Internet companies such as Google and Yahoo, which use your infrastructure almost free of charge in the future for the spreading of videos and television.

We are convinced of the fact that Google, Yahoo and Apple in the private customer business, and in addition, IT-services from the like of IBM, EDS and Microsoft in the business customer market, form a very important part of the competition landscape. We fight no longer only against other telecom companies and cable system operators. Nevertheless we will defend our position in the communication market.

How do you want to achieve that? The competition will be even harder in the new net. Research concludes that Google, Yahoo & co can offer their services in the same quality as infrastructure operators. Which right of existence will you than have?

It can well be that there will no longer be recognizable quality differences and the customers will use these web services exactly like what we offer. But for us there is no alternative. Already now the turnover in the fixed net business decreases each year. We hope that with our television offer this trend can be stopped. That can only work when we renew the entire infrastructure and lower the costs


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