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Dido Harding on the future of the telephone industry

Updated Thursday, 29th March 2012
Talk Talk Chief Executive Dido Harding tells The Open University's Leslie Budd why landlines have a future in an increasingly mobile world.

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Leslie Budd

Dido, much is made of the internet, but what is the future of landline networks for telecoms companies?

Dido Harding, Chief Executive TalkTalk

Well, bear in mind I'm slightly biased in that I run a fixed line network in TalkTalk, but what we see happening is that all of us over the next decade will want to watch more and more video on a variety of devices.  Whether that’s a mobile phone or a tablet or a computer or a television screen, we will all want to download or live stream video in our homes, in our businesses and while we’re on the move.  And there’s a basic fact of physics that it costs roughly 50 times more to transmit a bit of data on a mobile network than it does on a fixed network.

So, over the course of the next decade, more and more of that video that we want to watch on our different broadly mobile devices will actually be delivered to you via a fixed network, because the physics make it impossible for that be done through the radio waves through mobile at an affordable rate.  So more and more of what we would think of as consumers as mobile telecoms, watching something on your mobile phone, will be delivered via a fixed line network and then using wi-fi in your home, in your office and when you're around and about.

So we think the future for fixed line telephony is actually enormous, because the demand to watch live pictures on all these different devices everywhere in the world is going to grow exponentially over the course of the next decade, and to make that deliverable you're going to need fibre in the ground as close as possible to where your mobile device is.

Leslie Budd

That’s interesting; it goes against the conventional grain.  Broadband speed seems to be a fixation of certain companies as a competitive weapon.  I wonder what other kind of strategies you would propose.

Dido Harding

I always start by looking at what do customers want.  So, if you ask UK households today what they want out of a phone and broadband provider, what they say in order of priority is they first thing they say is they want it to be good value for money, the second thing they say is they want a reliable service, the third thing they say is they want good customer service if they’ve got a problem, and the fourth thing they say is they'd like higher speeds.  So speed actually isn’t the number one driver of customers’ purchasing decisions today.

Now, over time, as we all want to download more and more video, we will want higher and higher speeds, or wider and wider bandwidth to be able to download different pictures simultaneously, but actually, today, delivering better value for money at the existing speeds is we think in TalkTalk a better strategy.  That, you know, starting with the customer, that’s what customers tell us they want, and I'm a really big believer in business that if you listen to what your customers tell you and design a business that delivers for them, actually that’s usually a winning strategy.

Leslie Budd

And finally what kind of regulatory changes would you look for, given that there seems to be bias in favour of the large incumbents?

Dido Harding

Well I’ll never disagree that there’s bias in favour of the large incumbents, as I'm a new entrant, disruptive non-incumbent.  TalkTalk’s business is highly regulated, so I'm what’s called an unbundler; I unbundle your phone line from BT, and BT has to provide me with the last mile of copper back to your home.  So BT is my single largest supplier and my single largest competitor.  So TalkTalk exists at the gift of the regulator, and we think that the regulator needs to continue to do their job.

It’s a good thing that there is competition to BT and the regulator in the form of Ofcom has done a good job in the last decade in ensuring there is competition for consumer broadband and phone services.  But we would be very worried that you can't just stop now, and that as technology changes and we move to fibre and faster speeds, it’s really important that the regulator remembers that competition is what drives value for money and take-up.  The UK’s got one of the largest customer penetrations of broadband in the world, believe it or not UK consumers spend more money per head online than any other country in the world, and we have some of the cheapest broadband in the world, that’s because there’s competition.

So I want to encourage the regulator to keep a competitive landscape, and as the technology evolves, to make sure that the regulatory framework keeps up with that and we don’t end up back where we started, ten years ago, where everyone had to buy their phone and broadband, well broadband didn’t even exist, phone services from BT.

Leslie Budd

Dido Harding, thank you very much.

Dido Harding

My pleasure.

(4’59”)

 

 

 

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