EComm: Time to change the station

by alec on October 29, 2009

I’ve spent a little over a day at eComm meeting people, listening to the conversations and presentations happening and reflecting on what I’ve heard.

During the panel yesterday afternoon, I noted that I spend less on voice, data, and text messaging each month than I ever have, but more money on communications over all. What has made up the difference?  Music, and applications.  The carrier’s share of wallet is in decline, although I spend as much or more money than before. When I asked whether the panelists were worried by this trend, there was no good answer.

It’s time to start a new dialog in the emerging communications community.  It’s time to abandon conversations about whether carriers will or won’t survive.  They will. Yes, margins are under pressure, but networks need to be managed and operated.  Better the carrier manage the network than, perhaps, a government entity. 

Perhaps carriers will be the pipes companies, and as many people observed yesterday at eComm, that’s a great business.  Perhaps they will be applications developers, although I think that’s highly unlikely.  The vertically integrated model this implies necessarily constrains innovation.  Perhaps they will be aggregators of third party applications; several carriers I spoke with yesterday expressed support for this viewpoint.

It is, however, time to stop talking about the death of the incumbent. Let’s instead change the conversation – acknowledge that the carrier network is a platform, and that the carrier has a need for an application community, and begin the dialog between network partners and developers about the ability for those operators to help us get to market.

While we’re at it, let’s also change the channel, dial away from the conversation about “mash-ups”, and focus instead on user needs, the user experience of communications, and the economics associated with that user experience.  By focusing on the business value of the services being developed instead of the technology platform, we can all become better able to reach the customer with game changing new communications services.

Make sense?  It’s an idea who’s time has come.

{ 5 comments… read them below or add one }

Kerry Ritz October 29, 2009 at 2:21 am

good pts. it also means that if we talk about the user experience and the business value of new services, it means we also need to hear from people from outside of the telecoms world. if we want to learn about customer experience, let's hear from world class retailers. let's hear from companies that have disrupted other industries

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Norm Simpson October 29, 2009 at 10:22 am

'It’s time to abandon conversations about whether carriers will or won’t survive". I think some will and some will not.Time will tell.

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Ari October 29, 2009 at 5:02 pm

Alec:
Yes "Perhaps carriers will be the pipes companies" !
The carriers are the pipes and should be that only. As long as they compete on the content we will have conflict and also will not enjoy the best pipes we can and should get. They should be utility companies again. I recall reading someones blog in the past that commented about GE not selling electricity (and perhaps at the same time charging more if you have a SubZero refrigerator)…

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Zip Droid October 29, 2009 at 5:07 pm

Carrriers make money getting you to sign contracts and subsidizing equipment, there is a brave new world out there for developers to enter the market as pointed out, that's where the jobs are being created and all of the real innovation takes place.

leverage the network with your app and you will succeed and the carrier will hate you because you use up the bandwidth they spent so much money to build for them to not want your app to use up.

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Colin Pons November 5, 2009 at 11:06 am

Alec,

Good en true points. I believe the telephony business model is dead (or at least dying, it make take some years before we officially declare it dead). But that leaves Telco's time (although limited) to experiment with new ideas and concepts. I do believe they can (and will) be utility pipes, may provide some platform capabilities (these are basically utilities as well) and most will be service providers. The most uncertainity and differences in strategy between the different Telcos will be around service providers; some aim to be premium providers (including in-hous app development), others will be aggregators. The real issue with service proviers is however how to meet customer needs (i.e. go beyond the articulated demands) and are they willing to look for the underserved customers an nonconumsers?

Colin

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