Are you suffering from Goobe fatigue? Because I am, and currently finding solace in one of the most meaningful and perhaps the most important writing that appeared on the web today. James Enck, a wise man in the ways of telecom (even if he works for a brokerage), recently attended the Telco 2.0 conference and came away with ten things that are wrong with the phone companies today.
Some of his findings have been vigorously discussed here, and this is just a perfect post. While you are at it, Digg It and also send it to your favorite telecom executive. No point spoiling perfection but here are some key takeaways that should prompt you to read the whole thing.
- Voice is becoming a feature, not a service
- Telcos don’t seem to realize that what they want to sell, and what consumers want are almost never in sync.
- Telcos can’t innovate
- Future is API, not control. (British Telecom gets it, if you remember my piece about them in Business 2.0.)
- Telcos thrive on scarcity – future value will be built around abundance
I saw the same post on SeekingAlpha and couldn’t agree more. It’s a strikingly good job in a sea of random blog bytes. Just coming from a telco conference in Paris today and one can really see the validity of his point of view.
Om
Having worked in and for Telcos, ISPs and now Web 2.0 / broadband media Co’s I can echo most of this but would note that:
(i) Its not the Old Telco per se that is like this, its nearly all Big Co’s where 90% of the people are toiling in the fields for todays revenues. Yesterday’s Groovy ISP and Mobile Co’s are there now, and probably even G**gle soon, as it clearly now has to innovate by acquisition.
In fact, in my opinion Fixed Line Telcos have been a lot more inoovative in the last few years than Mobile Co’s, mainly because they have had to be!
(ii) But, even the ones that “get it” now have to turn a supertanker, not a nimble speedboat around. Rome, and BT’s 21 CN, will not be built in a day. The cultural move from service centric to user centric end to end systems is a major challenge. Cable hit it first with the triple plays, Telcos are just now starting the journey.
(iii) Telcos can innovate – their R&D guys are usually second to none. The issue is always getting it from the labs into the field quickly.
Thanks for re-introducing me to James’ blog, he is one of the most perceptive commentators on the web.
I totally agree with his sentiments. Telcos should be simple utility plays and should be forced by regulators to stay in that space. I’m usually against state intervention but Telcos by their nature are monopolistic and prefer closed rather than open standards. And soon (if not now) high speed internet access will be as fundamental to a nation’s economy as street lighting and adequate water supply.
If telcos think they can add value they should form consultancy arms or spin off businesses. I doubt a single one would prosper. Telcos have institutional rigidities developed from being in a warped market over many decades. These rigidities develop anti-consumer policies. There are many examples; for example if someone in the UK was to move house they are likely to be without broadband access for 4 weeks. BT is among the worst offenders.
Fives years ago Microsoft were a monopoly, the garage innovator(linux/open source/google) has greatly reduced their position. The distortion in the telco market is that no innovator could truly be a google. Name me one company in the telco space that could be compared to innovators such as google, sugarcrm, red hat, asterisk, apple etc etc.
I’m with Alan Patrick here. Big is not always beautiful. I’d actually take it a step further and say the problem is actually one with the public markets, which overemphasize growth. Too much pressure is put on companies to grow beyond their natural scale and in the end they become sick and bloated and investors who stuck around too long lose out. When Microsoft started paying a dividend, they were trying to tell us something important . . .
XO – I have used this company for many years and stopped because they are horrible to work with when you need customer service. They are the first ones to want their bill paid, but the last ones to figure out any problems. I have spent a ridiculous amount of time troubleshooting for them. Can’t wait till someone takes them down. If they had good management they should review their communications in their own company.