In my mother-tongue, Tamil, there is a saying that translates to: howmuchsoever a common sparrow may soar in the sky, it can never become the eagle (உயர உயர பறந்தாலும் ஊர்க்குருவி பருந்தாகாது). It is dished out whenever someone desires to do or be something that is near impossible to achieve.
I am reminded of this saying every time I read an article, hear a speech or endure a presentation that extols Telco’s to become lifestyle players such as Facebook, Google, Apple, WhatsApp or anyone else.
A Paradise Lost
Once upon a time, before the dawn of personal mobile communications, the Internet and satellite TV, the life of a consumer involved business and social relationships that required meeting in person, the entire family shared a TV in the living room and the entire family used a single telephone in the living room with the phone-number published freely through a printed directory.
All this has irrevocably changed, now. The telephone is no longer a family device; it is a personal need. As a personal device, it has had to morph into highly customised profiles – something that would be dismissed in the world of telephony, obsessed as it is with Central Tendencies, as the long tail.
The Way Forward
In my opinion, there are possibly three alternatives in front of the Service Providers as shown in figure below.
Falsifying the Tamil Proverb that I have quoted in the first paragraph, Service Providers can try to become like an Internet Services Company such as Facebook. I know of one large operator in North America who seem to have embarked on this journey. However, this operator has been an outlier who has been working on the bleeding-edge always. It has also not been easy for others to follow this operator because of the sheer size of their wallet and Engineering capabilities they have in-house. I would expect only 2% of the Service Providers to evolve to this state.
Aided by smart regulation, some of the Service Providers could end up suppressing their own brands and become Aggregators of third-party services. For example, MVNO models that had not been successful in the past may become successful if the MNO suppresses their own brand and withdraw it from competition in the market. However, suppressing one’s own brand is not an easy decision to make. So, I imagine that this would be a minority compared to the third category. I would expect only 38% of the Service Providers to evolve to this state.
A large majority of the operators will have to be content to play the role of being Utility Companies providing Connectivity Services. These companies would do better to focus on how best to make their networks the best performing network in their markets and attract the maximum number of subscribers. Network Performance should be benchmarked on frequent basis, probes and other mechanisms should be deployed for real-time analytics and IT tools transformed to manage Network Performance in real-time. In fact, it is for this precise reason, I feel that Service Providers should choose a player with strong IT / tools capability independent of the products deployed in the network to be their Managed Services partner.