I just finished doing a fascinating interview with Norman Lewis, the Director of Technology Research for France Telecom’s ISP, Wanadoo, and a keynote speaker at our upcoming Emerging Telephony conference. I’ve been impressed with what I’ve learned of Norman’s work, and it sounds like France Telecom is a telco that really “gets” all this emerging telephony stuff. I’ll be publishing the full interview in the next day or two, but I wanted to give you a taste now…
Stewart: Who thinks they own this space: the Telco’s, the ISP’s, or the Google/Yahoo/EBay trinity?
Lewis: Actually no-one but the customer ‘owns this space’. If there’s anything we should learn from history is that user behaviour and social forces will determine the shape of this space in the future. Just remember the first predictions on telephony itself!
But there is a sea change taking place. Telcos have begun to understand that voice is simply another data service over wireless or wired networks and that this migration of voice into the application layer opens voice to competition from other application-level players, such as portals. Though it appears GTalk, Y! Messenger, AIM, MSN Messenger and eBay’s Skype could commoditise Telcos as simple pipe-providers, it should be remembered that Telco expertise in identity and authentication, quality of service, convergence, billing and customer care, places them in a strong and potentially dominant position. This space will become hotly contested: Telcos believe they can maintain their positions while ISPs, MNOs, portals and others believe they too can occupy this space and thus overturn old hegemonies.
‘Telcos’ in the traditional sense of the term will not occupy this space. VOIP is destroying existing business models and they will be disintermediated. But in the words of Lawrence of Arabia, ‘nothing is written’ – yesterday’s Telcos can transform themselves if they recognize this threat and become 21st Century converged communication platforms.
I have some quibbles with his statement:
"Telco expertise in quality of service, convergence, billing and customer care..."
What Telcos is he talking about?
I'm just going to address this from the telco I know, SBC ("The New AT&T"):
Quality of Service - Are we talking about quality of voice service? Data? SBC has huge areas of their infrastructure with 40+ year old copper lines that have static in the rain, and support modem data rates of 22k if you're lucky.
Convergence - Are we talking about the same Telcos that invented DSL and ISDN in the 1970s, took 20 years to roll out ISDN and priced it so expensively that no one could afford it, and have taken 10+ years to roll out DSL to perhaps half of their footprint, totally ignoring rural areas altogether?
Billing & Customer Care - Ask any SBC customer how their experiences with billing and customer care have been. They don't have a particularly good track record here, and neither do Qwest, Verizon or BellSouth.
Why do these folks think they can suddenly turn themselves into cable TV companies too?
Rodger, please take time to check out the state of European telco markets, they are significantly more advanced than the US. The article has a France Telecom label on it for christ sake.
Roger,
I understand your quibbles but they're based on the rather dated premise that a telco is a telephony based company rather than a telecommunications company. That sounds like a minor difference but it's actually a major divider since a great amount of ISPs and cablecos are, these days, telcos and have a much broader range of products and services than the old Ma Bell type of analogue voice providers. The old telcos are playing catch-up and struggling to compete and now, certainly in Europe at least, the power is with the new style of telco, especially with LLU (Local Loop Unbundling) which gives the new telcos the autonomy and power to control the physical connections to the home/office. Now that the old monopolies are being shattered, the ability to control the experience from end to end and to provide the content to the user directly will give a much wider range of services. Dr Lewis & his team seem to realise the potential they have to completely change the customer experience and transform how the old services of communications, media and web can combine into simple packages, hopefully to the benefit of the end-user (but we shall see how this pans out in the long run).
Well having worked for a telco, a huge ISP and two large portals in the UK, Roger actually makes a good point that is as relevant to our markets as yours. Especially in the arena of customer services traditional telcos perform astonishingly badly...
I just want to know why it is when someone FINALLY puts the user first, everyone stands around clapping and backslapping each other like it's some miracle, saying they 'get it'. I'm not too dumb to realise money has to be made, but it's just a shame it's taken so long for firms to spot that which is glaringly obvious. You have to give users things they want to use, and empower them with the confidence that you're there to fix it, in cases where things go wrong..
Maybe I've missed the point, but I don't see the relevation in any of this.