Roadmap for the Future Having survived the telecommunications downturn, participants at the Global Communications Strategy Forum decided to arm themselves with an honest look at the future. By John H. Ostdick Senior executives, industry experts and academics from around the world met for a three-day conference at The UTD School of Management (SOM) in May to debate and assess challenges and choices facing the recovering telecommunications industry. Debates at the conference, the Global Communications Strategy Forum, sharpened industry participants' focus and helped initiate a "dialogue between knowledge producers, such as universities, and centers of knowledge consumption, such as firms, that may deepen with time," says Sumit Majumdar, Ph.D., an SOM professor of technology strategy who organized and chaired the program. During the forum, sponsored by The School of Management and held May 5 through May 7, panelists offered candid, lively evaluations of the telecommunications sector. The opening address by keynote speaker C.K. Prahalad, University of Michigan professor and corporate strategy specialist, zeroed in on confronting the future (see C.K. Prahalad Challenges Forum Participants on page 12). Participants did that in panel discussions that explored strategy from several vantages -- those of markets, technology, finance, voice-over Internet protocol, competitive dynamics, and management challenges. Leading individuals (see Forum Who's Who on page 13) "who could articulate a road map for the future of the industry" came together, Dr. Majumdar said. "There was a great deal of interest in the forum from the business community in the Dallas area, and that is a sign of confidence in UTD and in the idea behind the forum." Dr. Majumdar said he was struck by the dynamism many new entrants in the sector, such as airBand, Last Mile Connections and IPUnity, are bringing to bear, and by their innovative business models. "It is these new businesses that will drive the region and the country forward," he said. Still, Dr. Majumdar acknowledged that he is "not 100 percent sure" the sector knows its customer well, a sentiment outlined by keynote speaker Professor Prahalad. NEWSFLASH: Boundaries Are Changing "You are creating products with constantly improving capabilities that most consumers find too difficult to use," Dr. Prahalad said. He told participants "the cellular market for Brazil-China-India will reach 400 million to 500 million cell phones, compared with 150 million in the U.S. market, by 2006. So I ask the question, who is driving whom? Who will set -- demand -- the standard at this point? "This is the first high-tech industry to be driven by developing countries," he said. "Traditional boundaries are not valid. Consumers may have a major role in defining industry boundaries and economies." To address changing customer focus, the sector must "rethink its approach," Dr. Majumdar said. "That customer is 10 years old (currently), and in the next five to 15 years, his or her consumption will define the marketplace comprehensively. Today for her or him, the wireless handset is an emergency-calling device, but tomorrow -- within the next two years -- it will be a connectivity, content and interactivity appliance." Industry participants expressed strong -- if cautious -- sentiments that the sector is emerging from the dark days of the past few years. "I call it a 'recalibration of optimism'," Dr. Majumdar said. "There is realism in the air. More mature deliberations are now being made. Expectations are being tempered by analysis." INDUSTRY NOTE TO SELF: Standardize and Simplify Two main discussion topics dealt with the impacts of broadband and integration of technologies. Masatsugu Tsuji, a member of Japan's governmental telecommunication council, and his delegation outlined the staggering progress of Japan's technological integration. "Starting from almost zero, the broadband penetration level has reached close to saturation point, and almost all of Japan's households are connected to broadband," Dr. Majumdar noted. Comparatively, broadband diffusion in the United States is relatively low. W. Eric Mentzer, vice president, Desktop Platforms Group, and general manager, Client Platform Division, of the Intel Corporation, said that although "we are entering the era of broadband wireless, there are still 5 billion people not yet connected." Mr. Mentzer said that "standardization is the path to high volume." Nokia Networks Vice President of Mobile Services and School of Management Advisory Council member David Dickinson asserted that the industry must simplify multimedia devices to speed the mobile revolution. "The future is about optimizing a device to consumer practice," said Mr. Dickinson. "It won't be long before we have a hundred unibytes of memory in our pockets; all the media that you can consume will be stored on this one little drive." George Brody, an SOM Advisory Council member who is co-founder and vice chairman of GlobeRanger, a Richardson, Texas-based software company, offered a glimpse into the extent of standardization needed and its future applications. "Wireless has to replace disruptive technology," said Mr. Brody, who has advanced the use of implanted chips (networked edgeware) on goods in the enterprise core that allow precise tracking of goods and needs. There is a wide range of implications for such chips, he said. "To combat drug counterfeiting, for example, codes can be tagged at the molecular level." UPDATE: Consumers May Balk All services come at a monetary cost, however, and research indicates that consumers have specific price-point thresholds they won't cross for voice transmissions despite other bells and whistles, said Lester Taylor, a professor of economics at the University of Arizona. Professor Taylor co- authored a study of consumer attitudes toward Internet services. Consumer "willingness-to-pay" benchmarks are currently lower than many industry business models may be assuming, he noted. "Still, the pace of incorporation of this technology into the mainstream will be fast, because once diffusion starts, it is propelled along at an ever-increasing pace and becomes the de facto standard," Dr. Majumdar said. "Of course, it is obvious that the pricing model has to be right." New ground broken at the forum was but a glimpse of possibilities for the changing academic-business landscape, Dr. Majumdar said. Programs such as the forum showcase SOM's talent and provide UTD with the community and institutional legitimacy universities strive for, Dr. Majumdar said. "Universities have a very substantial body of knowledge embodied in their human capital," he said, "and much of that is under-utilized. Faculty members need to become public intellectuals who alter the contours of contemporary debate." C.K. Prahalad Challenges Forum Participants By John H. Ostdick University of Michigan professor C.K.Prahalad set the tone for the SOM Global Communications Strategy Forum by challenging participants not to rely so much on the past. He encouraged them to see the world market through a different window. Dr. Prahalad, Harvey C. Fruehauf Professor of Business Administration and professor of corporate strategy and international business, specializes in research into corporate strategy and the value-added role of top management in large, diversified, multinational corporations. He has spent the last decade and a half pushing people to break their traditional mental frameworks. He has consulted with many of the world's foremost companies and helped develop such concepts as core competence and strategic intent. The Financial Times has slotted him eighth on its list of the "top 50 most important living management thinkers." "I do not worry about 'best practices,' for the simple reason that best practices means that someone has already done a task," he explained. "If everyone is going to copy a benchmark, then you all will look the same. If you are focused on next practices, you cannot extrapolate the past. "Strategy is about folding the future in rather than extrapolating the past." Many companies tend to "staple five years of budget [together] and call it strategy. Industry analysts fall into this trap as well, because that's where their data comes from. Just because you have more data, that does not mean you have the right questions to ask," Professor Prahalad added. The if-you-build-it-they-will-come model has not worked for the telecommunications industry, he said. The sector needs to concentrate on the consumer view. "What if we start with the consumers and draw all the arrows the other way?" he asked. "Traditional boundaries are not valid. Computing, communications, components, consumer electronics and software are all coming together to create hybrids." The largest reseller of mobile minutes is General Motors, through its OnStar program, he noted. And Wal-Mart, he said, is believed to have the largest commercial database in the world. Professor Prahalad's speech proved a forum harbinger. Issues he raised came up repeatedly in other speeches and panel discussions. Forum Who's Who The following is a roster of panelists and topics they discussed: Wednesday, May 5 ¥ CEO Panel and Dinner ¥ "C Notes: Back to the Future" ¥ Angel Ruiz, president and chief executive officer of Ericsson North America; Dr. R. Brad Kummer, chief technology officer, Optical Transport, Cogent Communications; Dr. C. Robert Helms, dean of UTD's Erik Jonsson School of Engineering and Computer Science Thursday, May 6 ¥ Morning Plenary Address ¥ Dr. C.K. Prahalad, Harvey C. Fruehauf Professor of Business Administration and professor of corporate strategy and international business, University of Michigan Markets Panel ¥ "Voices and Choices: Who Will Communicate, with What, When, Where and Why" ¥ David Dickinson, vice president, Mobile Services, Nokia Networks; Paula Kruger, executive vice president, Consumer Markets Group, Qwest Communications; Stan Liebowitz, professor of economics at UTD and author of Re-Thinking the Network Economy: The True Forces that Drive the Digital Market Place; Dr. John Colias, vice president, M/A/R/C Technology Panel ¥ "Disruptions and Network Decentralizations" ¥ W. Eric Mentzer, vice president, Desktop Platforms Group, and general manager, Client Platform Division, Intel Corporation; George Brody, co-founder and chief technology officer of GlobeRanger; Gordon Cook, editor and publisher of The Cook Report on Internet Protocol; Farook Hussain, Network Connections, Inc. Afternoon Plenary Address ¥ Scott Nelson, chief technology officer, Alcatel USA Finance Panel ¥ "No Sweat: Financial Work-Outs, Consolidation and Industry Renewal" ¥ Professor James Alleman, University of Colorado; Robert W. Crandall, senior fellow, Brookings Institution; Donald Stockdale, associate bureau chief, Common Carrier Bureau, Federal Communications Commission; John Adler, venture partner, Interwest Partners Voice-Over Internet Protocol (VoIP) Panel ¥ "The End of Legacy Networks as We Know Them" ¥ L.C. Mitchell, vice president Communications Practice, A.T. Kearney; Gordon Quinn, vice president of strategic technology and business planning, and general manager of multimedia platforms, Nortel Networks; Keith Bhatia, senior vice president of business development, IP Unity; Professor Lester Taylor, University of Arizona Dinner Address ¥ Sam Pitroda, chairman, WorldTel Friday, May 7 ¥ Plenary Address ¥ Professor Frank M. Bass, Eugene McDermott University of Texas System Professor of Management, UTD Competitive Dynamics Panel ¥ "The Evolution of Competition in the Galaxy of Networks" ¥ Professor Alfred A. Marcus, University of Minnesota; Andrew Lombard, founder and chief executive officer, airBand Communications, Inc.; David J. Salant, co-founder and chief executive officer, Optimal Markets, Inc.; Masatsugu Tsuji, member of the Information and Telecommunications Council, Government of Japan Management Challenges Panel ¥ "Going Up the Down Escalator: Managing Firms in the Era of Market Migration" ¥ Hilary Mine, senior vice president of communications, Alcatel North America; Bridgette Bigmore, head of Broadband Strategy, BT Exact; James Martino, chief executive officer and president, Last Mile Connections; Phillipe Bernard, vice president and Strategic Business Unit head, Orange Valedictory Address ¥ Professor Sumit Majumdar, University of Texas at Dallas School of Management and Global Communications Strategy Forum chair