Paul Budde



Budde Comm


Technology News


Interview - Paul Budde

Interview: Paul Budde, Managing Director, BuddeComm - 10th July 2003

Media Man Australia secures an in depth interview with the Managing Director of BuddeComm, Paul Budde.

This will be of great interest to readers, as many people know that MMA Director, Greg Tingle, was both a Telstra and Optus "Salesperson of the Month". Greg plans to write a book, which will include a chapter on the Australian telecommunications business.


What's your background?

I hold a marketing degree at the Institute for Marketing (Netherlands) where he graduated in 1973. I worked for Rank Xerox as a product manager in Amsterdam from 1973 to 1978. In 1978, I started my own business which specialised in marketing consultancy. Since 1978, I have been involved in setting up electronic transaction and information systems in Europe, using in-house communication networks and videotex (now called Internet and Intranet). I was involved in Europe's first broadband cable TV pilot in the early 1980s.

How did you get into the position as one of Australian's foremost experts on telecommunications?

In 1983, I came to Australia and, as Managing Director of Paul Budde Communication Pty Ltd, have provided management consultancy services in relation to electronic services and communication networks since then. My company BuddeComm has written a marketing report for Telstra Australia on the implementation of Viatel (the predecessor to the Internet in Australia); developed Telebank for the Commonwealth Bank, the world's first nationwide electronic home-banking service; advised Telstra on the development of Electronic Yellow Pages; and worked together with the Australian conglomerate Lend Lease on their in-house online communication service (Intranet). We also designed and managed TAFEtext. This electronic information system provides a range of education applications throughout TAFE NSW (400,000 students) and was one of the first true Intranet sites in Australia.

I advise leading IT&T companies on strategic developments and business opportunities in the telecommunications market. Clients include: AT&T, Telstra, Optus, AAPT, MCT, Telecom New Zealand, Sharp, Fujitsu, IBM, Cisco, Compaq, Hutchison, PowerTel, Equant, Hewlett Packard, Honeywell, ICL, Siebel, Ericsson, Alcatel, Lucent, Krone, NEC, Oracle, Nortel, Nokia, Siemens, Energex, Sybase and GPT.

I am frequently interviewed on radio and television current affairs and news programs, as well as by the leading national and international financial and business press. I am quoted in company prospectuses and his knowledge of the industry is a valuable resource at the governmental level.

In the Information Industry section of the 'Power 2002: who really runs Australia' - published by the Australian Financial Review magazine. Paul Budde, from Paul Budde Communication, is acknowledged for his influence as a prominent analyst.

What are the biggest issues in the industry? eg over charging, identity theft, poor customer service....

How to harness the potential that new technologies have to offer both for our society (life style) and our economy. Our industry has a lot to offer in modernising our economy and stimulating innovations. In all of this a balance need to be established between national interest issues and economic viable commercial developments. The telecommunications network for example is to a very large extend a natural monopoly, so regulations will always be needed to secure national interest issues. Monopolies can easily be misused and there are plenty examples of this in the Australian telecommunications and broadcasting markets.

This leads to over charging especially the mobile phone industry is currently under the spotlight for this, monopolies also create mediocre services which in turn leads to poor customer service, the telecommunications industry is amongst the poorest performers in this sector, even worse than the banks.

Technological developments also lead to unwanted developments such as misuse by criminals, security breaches, identity theft, SPAM, etc. This also requires ongoing vigilance, but above all international cooperation between governance bodies, which in itself is quite a challenge.

What services do you offer?

We publishes over 50 Research Newsletters and Reports and we operate what is believed to be the largest telecommunications research service on the Internet ( with over 3,000 customers in 70 different countries.

I also assist organisations on all aspects of the electronic media including advice on:
· Telecommunications research and extensive information on convergence, interactive services and networks

· Market, company and country analysis
· Strategic and business plans regarding application of telecommunications and superhighways
· Advice to senior management Strategic Workshop
· Over-the-phone advisory service
· Website ( and electronic information service for Intranets
· Information transfer and management training to in-house staff.

Quite 'famous' are my monthly Roundtables, each one addressing different business issues. So far all event have been sold-out, indicating the interest they receive from the industry.

What have been the highlights of your career?

There have been several. The thrill of starting my own business back in 1978 and the move to Australia in 1983 had of course a massive impact not only business wise but also family wise as the Budde clan also includes my wife Louise, she play a key role in the business too, and my three kids who all have become real Aussies.

The fact that notable organisations such as the Governments of the USA, UK, the Netherlands and Belgium and the UNESCO are amongst our customers, make me feel very proud. Most international telcos such AT&T, BT, Deutsche Telekom, Telstra, Telecom New Zealand SingTel, Optus, MCI are all using our services.

Other highlights include my position as a consultant on telecommunications and broadcasting for the Australian Macquarie Dictionary publications, and the inclusion of our information for a range of prestigious government publications. (ABS, Foreign Affairs, Department of Communications, DIST).

And to top it off the ATUG industry award for services to the industry which I received in 2000. Communications Day, Australia's leading daily news source for the communications industry announced me as the Industry Advocate of the Year in its 2000 Readers Poll. I already mentioned my listing in the AFR's 'Power 2002. While not related to my telecoms business another highlight certainly has been the fact that in 2002 I was awarded the inaugural NSW Heritage Volunteer Award for my involvement in the Convict Trail Project - the preservation, restoration and promotion of the 240km long Great North Road between Sydney and the Hunter Valley.

In Australia, is Telstra the only real financial winner from Broadband?

So far yes, and this company is in a very strong position to financially profit from every single broadband activity in this country as they control most of the retail and all of the wholesale activities in this market. But nevertheless the ISPs are massively moving into broadband as well and will be able to pick up some of the crumbs that will fall from Telstra's plate. Regulatory changing will very slowly improve the financial position of these companies. Also new infrastructure operators are moving into this market these player are taking a much more 'open network' approach and be it slowly this is going to open up other new opportunities for new players in the market. It is also important to note that broadband will be a facilitating technology that will allow all businesses in one way or another to profit from it: e-commerce, content provision, e-publishing, tele-education, tele-health and a very large number of services we haven't thought of yet will all be developed by innovative companies who will be using the new network. As an example my company now generates 40% of its revenues from electronically based products and services , delivered via our website, and it has enable us to sell and market our services in a cost effective way around the globe.

Are the Telstra and Optus SLG's (Service Level Guarantees) good enough?

I have to answer this in two ways. First of all it is a shame that the level of customer services has to be guaranteed through regulations. The companies involved should have provided good levels of customer services without regulations.

On the other hand the SLGs are stifling competition as these regulations apply across the board. For example a small telco in a regional city could get slammed with the same multi million-dollar fines if something goes wrong as the fines Telstra get for their national services, these smaller players therefore will think twice before offering such a service.

What will be the outcome of the war between file sharers and the big 5 music recording labels?

In the end the music industry is doomed to become the loser, they actually are already the loser as file sharing is still continuing. Like all 'vested interests' industries they will have to stop doing business the old ways, they will need to look for innovative ways to maintain their relevance in the marketplace. Eventually broadband networks will become so sophisticated that the musicians themselves can make their music available directly to their fans and customers. I am already aware of artist who have set up such arrangements, perhaps yet not in a commercial way, but that is easy to change as soon as that start making sense. The incumbents can try to protect their 'record industry' but in the end it is the music that count and this doesn't necessarily need to be delivered anymore through the middlemen in the music industry. The same will apply to movies, free -to-air television and a range of other content.

Will ITV ever been done right in Australia?

There is nothing wrong with iTV, people will use it, but they don't want to pay for it and at this stage the broadcasters are unwilling to offer it as an extra service as there is not a revenue stream they van tap into to compensate them for the costs. Let alone that they can make a profit from it. ITV will start in iAdvertising on pay TV systems. Pay TV operators can individually address their customers already through the set top boxes. Digital TV makes it possible to built individual commercial relationships with individual customers or groups of customers. This of course will be of interest to the advertising industry. That will deliver the industry with a revenue stream that will allow them to introduce iTV. On the back of this interactive entertainment will also be introduced, but indirectly paid for through iAdvertising.

Where did Optus ITV loose the plot?

Optus tried to establish iTV as an individual profit making service and as indicated above that was the wrong strategy, as customers are not prepared to pay for it. Optus doesn't have the same affiliation with the advertising industry as for example News Limited and PBL, both shareholders in Foxtel. So Foxtel has far more expertise in this field than Optus. Furthermore the company was not prepared to make the necessary investments to move into a fully-fledged digital cable TV environment. Foxtel has put $600 million on the table to do just that.

How many complaints each year does the industry Ombudsman receive?

This is a sad confirmation of the poor levels of customer service in the industry. The telecommunications Ombudsman receives over 70,000 complaints per annum. The banking industry receives around 7,000 complaints.

Will the COTTS cases be brought back into the spotlight (I am writing a book, and will include my Telstra and Optus days).

I think that the most ugliest elements of poor customer service are now much better controlled. At least a minimum level of cultural change has taken place at Telstra that will hopefully prevent the most severe cases of customer service misuse. However, it is inevitable that a slow moving bureaucratic utility such as Telstra will always produce 'bug-passing' situation where in the end the customer will become the casualty. However, I think that in those situations a rapid response will prevent situations such as the COT cases in the 1990s.

What's your view on call centers for Telstra and the like, being set up abroad in places like India, where the staff members change their name, to sound, well...Australian? Do you think this is misleading the customer, and deceptive conduct?

It all comes down to management. If you do have good management, a rarity in the industry, than you will be able to utilise international services effectively without negatively effecting local customer services. I am very much in favour of sharing the benefits of our industry with others and the Indians have proven to be experts in this field, so why not using them. Where things go wrong is when this is purely based on cost savings without having the appropriate business processes in place to secure very high level of local customer service. But don't blame the Indians for this, blame the local (Australian) management teams.

How common is cyber stalking?

As with all other crimes and misbehaviours 99% of all people are normal, honest trustworthy people, it is the 1% that is causing the problems. I always like to warn companies to not punish 99% of your customers because of the 1% that is creating the problems.

Any predictions on what other telcos in the Australian market will "get out of town" ie die?

Over the last 3 years we have seen some very dramatic exits in the telco market. In 1999 we had 11 telcos with revenues above $100 million, there are now 6 left. From the 800 ISP, 500 are still around. I think the worse is over. Still a lot of consolidation will be required, but this will take place at the top end of the market. Clearly the number of mobile operators is unsustainable and also the number of telcos that are offering services to corporate customers will see further rationalisation. On the other hand for every failure ten new companies will arrive, this time that will happen in the broadband markets, here there re already 200 companies active, two years ago this market didn't exist. This will be followed by a revival of the dotcoms, new companies that will concentrate on services and content delivered over the broadband network.

Do you believe that "Three" was over hyped? Why?

Similar to iTV people do like mobile data applications such as pictures, but they don't want to pay for it. 3 has invested $3 billion in a service that people basically only want to use to make telephone calls, there is significant competition in this market and 3 is offering effective call charge price competition and based on that is wining customers, however there is no way in the world that they will be able to deliver a decent return on their investment anywhere on this side of 2010, and even than it is questionable if the will ever recoup that money, let alone make a profit. 3 will eventually only be able to survive after some massive write offs.

Do the hardware manufactures like Nokia, Sony, etc, "dumb down" (limit etc etc), the technology deliberately? explain.... (listen to the Lee Tien, EFF interview @

I don't think so, but what is happening is that these players first hype up the market (WAP, GPRS, 3G, etc) than they expect the telcos to make massive investments ( i.e. place big orders with them) and they will start producing. Of course what is happening that they know that they have hyped up the market and that when the telcos don't order they get cold feet and they drag their productions, this than leads to availability problems of handsets, infrastructure, etc.

Where are the main growth opportunities in the Australian telecommunications business?

I already mentions the many opportunities that will be possible through broadband and its sister technology digital TV. IP (Internet protocol) based developments are going to not only turn voice into a very cheap data product it also allows the networks to become far more intelligent. The telephone network will in fact become one big computer network. This will have lost of opportunities for software and application companies, data centres CRMs, ASPs and other related IT companies, convergence is the key here and we haven't seen the start of it yet.

What Australian telecommunications bodies exist to protect the customer?

There are several regulatory bodies and it has been argued that the industry is over regulated. The ACCC would be the most powerful body looking after all (commercial) trade practice issues. The ACA looks after the technical issues, including safety, security, heath care, etc. The ABA plays a key role in content protection on TV and the Internet. All industries also have self-regulatory bodies and processes in place. Than there is also as I mentioned before the Telecommunication Ombudsman, in charge of all consumer issues and for most people the first port of call.

What else should we know about you and Budde Comm?

Regarding our research we offer money back guaranteed services, if our customers are not happy they don't have to pay for their report, for the Roundtable they attended or for consultancy services that they receive from me. I offer all my customers free access to myself, they can call or email me for a quick advice, a contact name or a direction for a particular issue. I am more than happy to extend this service to your readers.

(website:, email:


Editors note: A most interesting interview, that will have the telecommunications and media industry talking. I need to finish my book, so I can use some of Paul Budde's quotes.


Budde Comm


Telecommunications Industry Ombudsman




Paul Budde