Home > Business Idea, Future Business Ideas, Long-Tail, Open Market, Time-To-Market > Are telecom operators like stamp vendors in a world of email dominance?

Are telecom operators like stamp vendors in a world of email dominance?


After speaking with several cloud telephony startups, it looks like telecom operators are like stamp vendors in a world of email dominance. The Innovator’s Dilemma seems to be claiming another victim soon.

CxO’s in existing telecom operators should be really worried. The major telecom cashcows are in danger. Calls and SMS will be substituted by apps like Voxtrot, Skype, etc. Access networks will be under extreme load when heavy smartphone, tablet and M2M usage will become mainstream. Also aggressive bitpipe LTE providers can have a Ryanair effect on the telecom world. Finally business solutions like PBX, etc. look antiquated compared to solutions like Invox, OpenVBX, Ringcentral, etc.

So what should operators do?

First let’s talk about what they should not do. Business as usual is not the ideal strategy. Telecom assets are likely to be substituted in the next 2-3 years, just as location has already been substituted.

Embrace Over-the-Top Player

Only few operators have done so but the best strategy to avoid disruptive competition is to embrace disruptive players. Trying to compete with on-premise equipment against IP-based Cloud-driven PBX-like services is impossible. Allow over-the-top players to offer their solutions to your customers and integrate with your network and your billing systems. Allow end-users a choice of competing solutions.

Expose Assets

If you protect your assets from the rest of the world, then over-the-top players will find ways around them. Location has been substituted. There is a lot of effort being put in setting up micro-payment solutions. If operators want to keep an oligopoly on charging and billing then they should urgently open up both assets and make them available at very competitive prices.

Other assets to open up: numbering plans, call forwarding, subscriber data (either via opt-in or via anonymous aggregation), etc.

Assets should be made available with Web 2.0 APIs. New business models like freemium, subscription and advertisement should be put into competition with usage-based subscriptions.

Open marketplaces

End-users want choice and operators have been traditionally bad at offering it. Nobody wants a Facecopy, Smitter or a LinkedOn. End-users want the original. End-users want to choose themselves between competing products.

Open marketplaces in which developers, partners, end-users, etc. can sell solutions and services that are integrated with the telecom assets, should allow end-users to have an “App-Store”-like experience when they interact with their operator.

The operator should be a business enabler for small companies. Innovative products should be brought in via open communities and partners. The operator offers the infrastructure for small companies to act like global players: e.g. global sales channels, professional support, integrate assets once – deploy globally, etc.

Support 2.0

End-users, be it consumers or businesses, need support. Dotcoms have been traditionally limited when it comes to offering phone support. However a lot of people do not feel like writing a web-based support ticket. Here is where operators could excel. Operators could work on building global support communities in which small companies get access to “call centers as a service”, “professional helpdesk as a service”, etc. A 5 people company should be able to offer global support via local certified partners and a common infrastructure that is offered by operators.

Operators as business enablers

Operators will only be able to survive the Innovator’s Dilemma if they start refocusing their businesses. Instead of being a selector of hand-picked high-priced services, operators should move to open markets where competing services are offered by thousands of partners. The operator moves from offering the services to becoming an enabler for others to offer services that are either based on the communication infrastructure but could also not be based on them. Operators have brands, offer trust, offer phone support, have direct sales channels, know the local markets, etc. Global small dotcoms could save enormous investments if operators would open these non-technology assets towards them and enable dotcoms to become global businesses for as small as they are in the beginning…

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