European telcos must learn to work with the Net

Old-school European telcos will only survive into the next century if they use Internet technology, according to Elek Straub, president and CEO of former Hungarian state telco, Matav.

Straub, an ex-IT director, told the ETIS 99 conference in The Hague yesterday that a company's biggest challenge is to work out which technology will have the most impact on its business.

He said his own company must learn "how to react to the IP/Internet phenomenon", and stated: "There is only one way left for any telecoms company that wants to be successful in the future - that is to use IT as a strategic tool."

Len Morris, Andersen Consulting senior partner, electronic and high-tech market unit, said: "Telcos are changing their systems. It won't be a tidal wave, but mini-ripples."

However, Eric Steeghs, European vice president of IT at ABN Amro, was damning about the progress of telcos in Europe, many of which have only operated in deregulated markets since the start of last year.

ABN Amro offers retail and investment banking services around the world, but Steeghs said many telcos don't understand these businesses. He was also critical about not getting proper quality of service and reliable billing, and warned high European prices would ultimately not be "sustainable in a competitive global environment".

Straub admitted that incumbent operators are often handicapped by a recent past featuring poor customer service and lacking in IT know-how and competent marketing, but said he believes they will draw on other technical expertise, market presence and international resources.

Asbjorn Eide, CEO of Telenor 4tel, the IT services and systems integration arm of Norway's former monopoly provider, was blunter still. He said: "A lot of technology from telcos is quite new to the telcos. We need to gain more experience in providing consultative services. We're not used to customers - with plain old telephony services we had clients."

All agreed that IT representation at board level - for telcos and other companies - is the way forward.