Taking a breather: "with stability, the industry will be able to take back some pricing power and then regain a sense of its future." - Commentary - Editorial

Telecommunications International, Sept, 2002 by Stephen McClelland

Frank looked paler than I had ever seen him before. Gone was the cocky exuberance with which so many of our meetings had been punctuated. I knew he didn't drink (alcohol) but when I met him he looked suspiciously like he was having a hangover. In common with the rest of the industry, I thought, and said so.

He was unimpressed at this metaphor. "I suppose you want me to tell you why it is, what it is, and what is going to happen now?" I nodded and waited for some sign of insight from the great guru of global telecom.

As I waited for him to get going, my mind wandered and I saw Frank in various if uncomfortable scenarios. 'Surely, Frank saw this coming; surely, he was not a WorldCom shareholder,' I said to myself. 'Surely he was not caught with everybody else? Perhaps things were even worse and Frank had actually been a consultant to WorldCom. Perhaps he had set their policies. What did he know and when did he know it?'

When he started talking again, sadly, it wasn't anything so specific as the WorldCom debacle. "We are not talking about trivialities like online pet shops and travel agents here," began Frank. "We are talking about the global telecom industry. We are talking about global connectivity. We are talking, dammit," -- and here he paused for effect -- "about global civilisation." He said this last phrase with such emphasis that he hammered his fist into the pub table and his glass of cool boiled water jumped to attention. Several other people looked round. Oblivious to their stares, he continued in a more defiant and angry vein than I had ever detected in him before.

Being British, I was able to smile tolerantly around to smooth embarrassment. In fact, I was about to begin a conversation that compared the red-blooded creative destruction of free market capitalism with the rather more stable (if, dull) world of globally-homogeneous policy and regulation. But then I thought better of it.

"What we need is stability, systemic stability," said Frank as the glass from which he had been drinking continued to gyrate on the table. We both stared at it as if it represented some unpleasant metaphor. "We are not going to get that for a while, so people are going to have to learn to live with cash-based business and under-investment. But stability is what we all should be promoting."

This idea of stability seemed to me, a mere journalist, to conflict fundamentally with a dynamic marketplace. But perhaps volatility was the price you paid for progress in the 21st century. Still, volatility did not play well with the idea of global infrastructure being rolled out. "I think the businesses of infrastructure and services will definitely have to separate, even as investors wise up to reality but hopefully not overshoot," Frank continued. "All this has to take place as we see the industry consolidate."

He carried on. "With stability, the industry will be able to take back some pricing power and then regain a sense of its future. Investors need that to power the whole business. However," he tapped the glass, "stability remains the key."

But where is that stability going to come from, I asked, anxious to pin Frank down for once. Frank shrugged and gave me an uncharacteristic comment, "Whaddaya think I am, some sort of guru or something?"