Industry limbers up for telecoms Olympics

Geneva is bracing itself yet again for the International Telecommunications Union Telecom World exhibition, held there every four years.

Companies are flooding into the city for the six-day event to showcase the latest technologies in mobile and wireless telecoms.

Microsoft chairman Bill Gates and Hewlett Packard chief executive Carly Fiorina are among the keynote speakers, and over 100,000 delegates from 87 countries are expected to attend.

But a senior analyst has warned that, in an increasingly competitive marketplace, some telecoms companies are playing hardball with customers that may not be making the savings they hope for when they upgrade.

"There's a big fear that telecoms companies will reduce services to deal with high debt loads," said Larry Velez, programme director of technology services for analyst Meta Group.

"In addition, when poorly written contracts are cancelled the departing telecoms company may increase prices for the notice period. A lot of companies lose their shirts in the process."

Velez pointed out that, although switching to new suppliers could be a useful way of cutting prices, the corresponding increase in costs could outweigh such a move.

Meta Group found that some costs rose by 10 to 15 per cent during the first year after switching carriers, and that continuous costs in the years afterwards could be four to six per cent higher.

"One of the toughest jobs in transferring to Sprint was cancellations of services," said Daniel Doyle, director of network services at International Masters Publishers.

"Some of the departing providers made it really tough for us; I think they wanted us to grovel."

Velez also pointed out that choosing one supplier for a global communications system was fast falling out of favour among companies.

A single global supplier seldom gave the best price, he said, as there were only two or three companies capable of meeting the contract.

Opting for local solutions allows companies to negotiate between five or six suppliers to get the best deal.