Clueless management by numbers is killing the telecom industry
In the nineties it was paradise for those people who wanted to innovate. Unfortunately a lot of innovators forgot about revenues, cashflow, margins and profits. As happens too often in history, we went to the other extreme: clueless management by numbers. The type of management that thinks a strategy equals a growth target for next quarter. Innovation equals the next product release. M&A and financial engineering can make up for a louse product portfolio. Milking the cashcow can last forever.
The current crisis has many causes but one is definitely clueless management by numbers. For years IP telephony solutions have been around but no major operator has abandoned circuits. We ran out of IPv4 addresses recently and the world is full of sub-optimal NAT. The iPhone, Youtube, Netflix, etc. are killing networks but nobody tried seriously to come up with new revenue generators for operators.
It is five to twelve. Operators and telecom providers will need to join hands and come up with innovative products and solutions again. Management can no longer hide behind numbers because even with the best financial engineering the existing cashcows are at most two years away from dying. It is time to look for leaders that understand business and new technologies. The alternative is very clear. Telecom operators consolidate and seriously reduce headcount. Telecom providers get squeezed and either die or seriously reduce headcount.
Except for focusing on the core business, every operator and telecom provider should have an independent business unit that focuses on new revenue generating solutions. Otherwise can the last one to leave please switch off the light…