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Telecoms companies' re-invention
From voice to e-service provision
By: Quocirca
Published: September 2009
Logo for Quocirca

A new world order

‘Convergence' is an appealing term conjuring up an image of things neatly slotting together, and there is some technical justification as proprietary communications and interconnections are replaced by one unified approach-transmitting everything over the internetworking protocol (IP), the foundation of the Internet.

However, at a commercial level, ‘collision' might prove a better word. The IP-led open systems IT revolution in the ‘90s led to the demise of many once-famous industry giants, and the changes for the telecoms industry look just as dramatic.

The internet itself has opened an online channel for the sale, and in some cases delivery, of goods and services. Consumer, as well as business, broadband access is becoming widespread and its provision is often seen as a national imperative; examples being Australia's fibre to the home initiative and the targets detailed in the UK's recent Digital Britain paper.

Connectivity is becoming a commodity and so telecoms companies (telcos) can no longer rely on just providing ‘access' to an underlying wireline or wireless network's resources. They need to deliver value added services as well as the connection, otherwise they will simply become easily replaceable ‘bit-pipes'. However they do have a key asset, which is often underexploited-the relationship with customers-and this could hold the key to their on-going success.

Conclusion Operators have concentrated on building new networks for the explosion of data they hoped would take over from their declining voice revenues, but they did not engage well with their customers to find out what they really wanted or would pay for. Similarly they did not do enough to build mutually beneficial relationships with content providers, but too often acted as an aggressive, controlling channel. Economic and competitive market pressures now indicate operators should now be changing to offer a trusted and well managed conduit between content creator and consumer.

The operator is no longer king. The battle is not to be the "least worst" provider of telecoms services-it is now to be competitive with all those who are already competing, and will increasingly compete, in this space. Telecoms operators have to move from being sometimes seen as some of the worst customer experience companies around to compete with those consumer and business brands that appear at the top of the list year after year. These brands are the new competition-and telcos have to provide a customer experience that is up there with the best.

This is the opportunity that operators could address as services, networks and devices increasingly converge. If they can build an electronic commerce framework for the delivery of new services, take the risk out of technology decisions and allow costs to be more tightly controlled, they will have a compelling proposition for both consumers and creators of content and applications.

Provided the operator's offerings are seen as being solid and non-threatening, this means they can become an intermediary for the top brands-but these top brands will not be interested if they believe that the operator's user experience will reflect badly on their own brand.

The challenge is for the telecommunications companies to re-invent themselves from voice-focused operators into general purpose network intermediaries, trusted and valued by both service providers and service consumers. Quocirca will explore how this might be accomplished in two further papers in this series intended to examine this opportunity for telecoms companies.

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Published by: IT Analysis Communications Ltd.
T: +44 (0)190 888 0760 | F: +44 (0)190 888 0761