Two seemingly contradictory pieces have crossed my desk in recent days. Derek Thomson, writing in the Atlantic, reports that analyst firm IBISWorld is predicting that the fastest growth industry in the United States, for the next five years, will be digital voice – Vonage, the cable companies, and Skype.
Now, these are two very distinct categories of companies. The cable companies are running captive phone businesses that look and feel exactly like an old school telephone company, but deliver telephone calls across their cable infrastructure. Vonage, Skype et al, however are running services “over the top”, which is to say that they are layered on top of basic internet access.
Meanwhile across the pond, the ever-sanguine Dean Bubley points out that, despite their aspirations to move up the value stack, and thus increase revenues from their customer bases, mobile operators are doing little to help the companies that are actually creating value for customers* – the Googles, Youtubes, Hulus and Facebooks of the world. As a result, revenue is flowing to these third parties at the same time as the expense of running the high-speed networks that these parties depend upon grows.
Thomson writes that the rise of VoIP is the death of the landline. Voice has now become an application running on a network, and the previous incumbent telco monopoly owners of that application have both lost control, and not offered anything new of value. Innovations in the form of business model (the cable co bundles), or features (the Skype and Vonage applications) have all come from outside the industry. But as Bubley points out, many of those innovations could have been built upon a telco infrastructure, had the telco’s exhibited the foresight to understand the value of the services they offered and the customer data they were privy to, and found ways to market that to applications providers.
These are not new ideas. Rebels in the communications industry, myself included, have been speaking at industry events like eComm, authoring documents like the Voice 2.0 Manifesto, and building business plans for a very long time.
The big question is whether mobile operators are destined to suffer the same fate as landline operators. Can mobile operators learn from the fate of the landline companies, or will they submit to the coming telepocalypse** that has already engulfed their brethren?
* Hat tip to Andy Abramson for the link to Dean.
** apologies to Martin Geddes for thieving the name of his excellent blog, Telepocalypse.