2010-01-11

"None of the above"

During my random clickery I came across a telco-related website that had the following poll:


I can't help but think that this is a bit of wishful thinking. Telcos are very keen to drive up data traffic on mobile. However, they are not charitable organizations -- they have shareholders who want to see them earn money and thus telcos want to drive up traffic and earn proportionately more money.

As long as data traffic on mobile is metered, people will have an uneasy feeling about mobile connectivity. Especially since the current crop of "smart phones" do not have very good mechanisms for keeping an eye on your bandwidth use. For instance, for the Android, there are third party apps that gives the user the opportunity to monitor network usage as well as toggling the network on or off. But none of these apps are very good.

Most of the metering apps are fiddly. Then there is the issue of APNs (Access Point Names, the point where a phone enters an IP network) for MMS and for Internet. Whereas Internet access is metered by traffic, MMS is metered by transaction -- ie. you are billed by number of messages and not by byte.

Until recently the app I use to toggle network connectivity did not differentiate between these two APNs -- meaning that if I switched off network connectivity, my phone was unable to accept MMS messages. Of course, the app does not do any kind of metering. I have a different app for that -- and to put it mildly, it doesn't work very well.

I am not sure if the same problems are present for the iPhone. In any case, until unmetered Internet access is the norm, connectivity and bandwidth management are things that smart phones must have.

But I digress.

I think the biggest driver for mobile internet use will be (dare I speak it aloud?): fixed pricing. Or failing that, more reasonable data plans and phone operating systems that acknowledge the need to keep a close eye on your bandwidth use. The moment when people start to feel more relaxed about using mobile Internet is the moment it'll be something more than a backup solution for Internet connectivity. Because that is what it is today: a backup solution for when you are not on a wlan.

This suggests that the wishes of the telco industry are at odds with the wishes of the consumer.

Trouble? To me this suggests a huge opportunity for telcos. They are at a crossroads. They can continue to sell metered bit-pipes, a business that will most likely be eroded by other types of connectivity (what percentage of your time do you spend outside wlan coverage these days?) -- or they can ensure that they position themselves as service providers; which is a deliberately vague term since it can mean anything, though in this context it means something more than just offering the service of shifting your bits around :-).

The question is whether telcos can see beyond their next few quarterly results and plan for the longer term. When changes are afoot, being myopic about what the scope of the company will be 5-10 years down the road is dangerous. Just look at the photo industry. Who would have thought that it would be game over for those who did not make the move to digital fast enough?

If I were a shareholder in a telco today I would look at what long term plans they have and whether these plans display a clear and concrete commitment to adapt to a rapidly changing landscape.

Most large telcos today have the financial means to develop the new talents that will be critical to ensure longevity. On paper, they should have a bit of a head start.

The problem is largely a cultural one: most telcos are optimized for operating in a relatively stable business. A state where you can move slowly and deliberately and where you don't need rapid innovation -- or in fact any real innovation. What little economic theory I know also suggests that this complacent state is extremely dangerous when disruptive changes are likely. And disruptive changes are more likely now than ever with user behaviors changing ever more rapidly.

So to answer the poll: "none of the above".

And yes, I think there's still time. :-)

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