EXECUTIVE
FORUM John Hibbard Since 2001, John Hibbard has been a consultant with his own company, Hibbard Consulting Pty Limited, focusing primarily on the many facets of international telecommunications. John spent most of his career with Telstra and OTC. In the 7 years prior to his departure, John was Managing Director, Telstra Global Wholesale responsible for a team maintaining and growing Telstra’s international carrier business around the globe. John was also the Chairman of the Australia Japan Cable from its formation, having conceived the project and oversighted its execution. He was also elected by the industry to the Executive Board of the prestigious Pacific Telecommunications Council and is currently a member of its Advisory Council.
Are business conditions improving or getting worse, and are you optimistic or pessimistic about the future?
me very optimistic about the future as its power should swamp the negative aspects, such as oversupply, still pervading the industry.
2005 looks like being a much improved year for the submarine cable industry. Clearly it won’t be the bonanza that was 1999 and 2000 but it looks like being a whole lot better than 2002 and 2003, and modestly better than 2004.
What do you see as the short term and long term health of the international telecoms industry?
The rollout of broadband internet connections is reason for the positive tone. The emergence of cost effective offerings affording increased speeds at near to the same price as 56Kbps dial-up is causing a mass migration to the higher speed connections, whether effected through cable modems or ADSL. Measurements indicate that the average monthly download by a broadband customer is between 8 and 15 times that of a dialup customer. But more significantly, measurements suggest that the number is increasing when intuitively it should decrease as “less interested” users migrate.
The Australian experience, of which I am familiar, is that in the year 2004, international capacity activation has exceeded 100% growth. The signals are that this could be at least a further 80% in 2005, which on the larger base means an increased quantum of activation over 2004.
“With internet connectivity being the prime driver, then the ISPs and those carriers who provide the interface to the submarine system Heavy activation means that currently spare operators will be the key capacity is being put to customers in the submarine use. In many cases, it is utilisation of already cable market.” owned capacity but in
As much of the download can result from accessing foreign websites, the demand for submarine cable capacity is being fuelled. It is magnitude of this tsunami of demand that makes
some cases, it involves the purchase of new capacity. In both cases, there are O&M payments so more money flows into the coffers of the submarine cable system owners. But most significantly it consumes the spare lit capacity, bringing forward the day when more capacity will need to be lit. This is a positive sign for the manufacturers. However with so much unlit capacity in existing cables, it seems still a 8