What's wrong with telecoms

James Enck at EuroTelcoblog posted a sharp rundown of the ten things that are wrong with telecoms today (James is a telco analyst at Daiwa Securities in London, so that's his angle):

• Telcos have lost control of their core product: "they need to re-think the value of the call", telephony is sold today like frozen peas (the picture is from Norway)
  
• Voice is becoming a feature, not a service: it's worth watching for example the developments around "embedding voice in web communities, virtual worlds, gaming, etc".
• Telcos can't grasp that consumers may not want what they're being sold: "45% of KPN's first half DSL customer growth came from the DirectADSL  product, which is basically raw connectivity with no ISP service, and now accounts for about 20% of total customer base. (...) This seems to be a validation of the increasing role that web services are having in the lives of ordinary consumers, and that when given a choice many choose to avoid telco-mediated services entirely". (...) "If people want dumb pipes, you should sell them dumb pipes as efficiently as possible".
• Telcos thrive on scarcity, the future will be built around abundance
• Command-and-control culture is dead, open APIs rule
• Telco DNA is fundamentally unsuited to the current dynamics of content (he's talking user-generated, long-tail, etc)
• Telcos expand their footprints physically, not virtually: he writes that there is a strategy of "mutual assured distruction" being played out among the big for telcos in Europe. "Why didn't a telco, maybe one with a relatively small footprint - Belgacom, Swisscom, BT - buy Skype?" It's a question I've asked myself several times, particularly observing Swisscom, my cash-rich fantasy-poor home-market incumbent.
• Telcos can't innovate: "telcos should get away from an obsession with bullet-proof reliability and be more adventurous in product development"
• Telcos shouldn't try to innovate: "it is clear that the unsexy utility network business contains alot of value"
• Maybe the entire foundation is wrong: "The access model as it is now clearly encourages and enforces artificial scarcity, when in fact what might be needed is something entirely different" - abundance, that is. "The entire privatization process might have been a miscalculation".

I find point 3 particularly important. It's not only about customer service (which most telcos are not amazing at), it's about finally moving away from the old PTT model of captive subscribers and start thinking "customer". KPN seems to have understood (and so far to my knowledge it is the only one selling this service to individual customers) that if you're a little bit sophisticated as an Internet user, you don't need ISP services from your telco. All you need is pure connectivity. You can get e-mail accounts, storage and hosting, blogging and publishing tools, VoIP calls, IM, tons of content, and so on from a wide variety of sources, and mostly for free.

Sure, seen from the telco perspective, bringing you back to their portal over and over generates "stickiness" and related advertising money. But that, how to say, goes against the natural evolution of things, which is all about uncoupling the network and the content/services.

More generally, James' points are discerning portrait of the current telco schizophrenia: should they give up the "services" strategy and reorganize themselves as smart, efficient, innovative, unbeatable infrastructure providers, or should they keep pouring money into creating content, launching and managing DSL-based television, becoming "media companies"?

Comments

[David Mantripp]

Is Swisscom so fantasy poor ? I find Swisscom Mobile Labs (http://labs.swisscom-mobile.ch/home.faces) at the very least a considerable step in the right direction....