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Norwegian Telecom: Facing The Same U.S. Obstacles?
A recent business trip to the wealthiest of the four Nordic countries in Europe (i.e., oil-rich Norway, joined together with brethren Denmark, Sweden, and Finland), proved another eye-catching observation of the future of video distribution.
Indeed, intense meetings April 12, in the capital of Oslo, with top Norwegian telecom and telecom-investment firms Telenor, Opera, and DNB, for example, highlighted their yearnings for effective answers for how to best deliver quality video to homes and mobile devices. Yet, somewhat surprisingly, in many ways, these concerns are not unlike a Dish Network attempting to purchase a Sprint, an AT&T trying to merge with a German-owned T-Mobile, or a Dr. John Malone getting back into the U.S. cable business via a large share purchase of St. Louis-headquartered Charter.
Knowledgeable people within Telenor told me that the company is, in many ways, an equivalent of the U.S.’ AT&T, only in Norway. A deeper look, however, reveals that Telenor has a much greater company presence -- percentage- and revenue-wise -- outside of Norway, than AT&T has outside of the U.S. in fact, Telenor is much more of a global presence than either of the major U.S. telcos.
What was most interesting, however, was a tour of the Telenor campus on a multi-acre plot of prime land beside the Oslo fjord, in place of the old airport. Two football-field-long and adjacent six- to seven-story buildings (three of which are underground parking) embrace a sculpture-filled courtyard, where thousands of Telenor employees fill the global HQs.
With the guidance from Telenor’s current CEO, Jon Fredrik Baksaas, and his close corporate ally, Denver University-trained Alf Asheim, the company was among the first in the world to create an office environment where executive collaboration – on all executive levels – is prized over executive hierarchy. Thus, nearly everyone, from the CEO down, arrives to an unassigned, clean, and uncluttered desk, oftentimes a different one daily, with but a cell phone and a laptop, and perhaps some paper files from his or her locker (the locker being the only truly personal and assigned, private item in the buildings). Indeed, not even the CEO has his own office (although it was revealed that he has his own meeting room and some files, due to security concerns).
Further, because elevators are typically not places where workers stop and chat, those people-moving devices are, ideally, located more remotely relative to the stairs. Instead, wide staircases are highlighted, where employees are encouraged to stop and spend minutes catching each other up (or better, sharing new ideas).
Since large-scale implementation of what it titled Telenor’s “New Way of Working” (WOW) 10-12 years ago in Oslo, Telenor has seen the open collaboration model expand to the point where many others globally are copying and deploying it. Notes Asheim, “The WOW model has been introduced in all our office buildings in Europe and the Far East, with great success. We now see more and more companies -- especially in Scandinavia -- adopting the model for their new office buildings.”
Opera Software’s Operations
Like Telenor, web browser developer, Opera Software also supports an “open work” type of office environment. Opera touts an Oslo HQ with workers from 51 different countries, all communicating via a common tongue, i.e., English.
Opera’s top executives – CEO Lars Boilesen, joined by general counsel, Jason Hoida, Esq., and IR & corporate development director, Petter Lade -- delivered a remarkable hour-long description of the company, its mission, and directives. They focus the software company’s business expertise on three main areas. These include 1) carriers and compression; 2) browsers/search/access; and 3) mobile ads.
Like Telenor, Opera has burgeoned internationally; Opera now claims 300 million global users of its browser product, “and growing.” Over 1,000 employees fill 14 offices worldwide. Much of Opera’s recent growth is tied to deals with telephone carriers in other lands, offering their consumers cheaper access to the Internet. The trend of mobile ads is one Opera anticipates will vastly improve its business model.
Key competitors include Google. However, Google is also a key Opera customer, as is Sony and its Bravia model smart TVs. An Opera investment in a Silicon Valley-based video compression company, called SkyFire, is yet another example of Opera’s global growth.
To my question of where Opera Software sees its future, CEO Boilesen quickly responded, “To get to half a billion users, and to make a better return on our advertising.”
DNB, The Bank’s Media
As is true with most major banks, Oslo-based DNB looks to sift the media nuggets, in a telecom gold field that becomes ever more difficult to measure and manage. Its media and telecom portfolio head spent nearly an hour exploring trends and strategies of various Norwegian and global media concerns, from the cable, telco and satellite pay TV, to online/Over-the-Top video, to the over-the-air broadcast.
Interestingly, significant interest evolved in the two “big” old media/new media legal cases that are currently embroiling American TV, Aereo, and the Hopper case.
Erling Thune, DNB’s Telecom Services & Media Portfolio manager, further observed the current marked disparity between mobile telephone pricings in Scandinavia and the U.S. This becomes increasingly important in the U.S., as more and more video migrates to mobile and related devices. Mr. Thune finds this comparison most interesting, because “Most people in the U.S. think that the U.S. is ahead of Europe in mobile telephony, yet after purchase of a cheap, new, subsidized handset, the U.S. consumer pays twice as much in what are really high monthly fees.”
Five years ago, Scandinavia had a system like that of the U.S. today, but it has since created new models that enhance consumer awareness, competition, and innovation.
Indeed, Thune predicts that German-based T-Mobile may begin a wholesale change in the U.S. mobile telephone system, by introducing something like a more affordable European model. As a comparative example, Mr. Thune noted Austria, with a mobile telephone monthly service of no more than $12/month for up to a gigahertz in data service, and other models in Scandinavia today suggest “all-you-can-eat” mobile data packages for a basic fee of a mere $10/month.
Additionally, in relation to mobile telephone, Mr. Thune also opined that the OTT markets are using Scandinavia as a test market.
A final example of this phenomena is how HBO has responded in the last year in Norway, Sweden, Denmark and Finland, to the launch of Netflix. HBO appears to be using the Nordic region as a unique and exclusive global test market, Mr. Thune believes. In the past, prime HBO shows were only available many months after their original U.S. airing, and then only on the major national Norwegian broadcast TV outlets. Arguably in prompt response to Netflix in these countries, HBO today offers next-day availability, online, of its hits. Thune analyzes, “The release windows are becoming chaotic, thus it will be very interesting to see in Scandinavia if the new HBO model will create a new source of viable revenue, or cannibalize the current offerings.”
All-in-all, a pretty productive overseas business trip, I’d say. Thanks Norway, or in Norwegian, Tusen Takk. And best regards, as in Med Vennlig Hilsen.
Jimmy Schaeffler is a telecom author and chairman/CSO of Carmel-by-the-Sea-based consultancy The Carmel Group (www.carmelgroup.com).