{"id":287,"date":"2010-10-07T19:56:47","date_gmt":"2010-10-07T15:56:47","guid":{"rendered":"https:\/\/mideastposts.com\/?p=287"},"modified":"2010-11-06T12:38:19","modified_gmt":"2010-11-06T08:38:19","slug":"telcos-and-disintermediation-a-slow-motion-car-crash","status":"publish","type":"post","link":"https:\/\/mideastposts.com\/technology-in-the-middle-east\/middle-east-telecommunications-news-views-analysis\/telcos-and-disintermediation-a-slow-motion-car-crash\/","title":{"rendered":"Telcos & Disintermediation: Slow Motion Car Crash"},"content":{"rendered":"

\"\"<\/a>Telcos are facing something of a challenge moving forward. They are staring looming disintermediation in the face and many don\u2019t have the faintest clue what the hell to do about it.<\/p>\n

It’s an interesting idea, but there’s every chance that social media will end up transforming them beyond recognition and even killing a number of them off.<\/p>\n

I got to thinking about this speaking at a telecom event recently. I came across more than one Great Question in the process. For instance, when was the last time you actually dialled a telephone number? We\u2019ll be unlikely to ever dial numbers again. With today\u2019s IP enabled networks, telephone numbers are actually something of a virtualisation \u2013 we don\u2019t need numbers, because we don\u2019t have to use circuit switches any more. We don\u2019t even need URLs to communicate with each other, we\u2019ve finally arrived at the point where we can all mimic the prisoner \u2013 we\u2019re people, not numbers.<\/p>\n

In this virtual world of Facebook phones and IP to IP connections (whether that’s between handsets or PCs), the good old fashioned telco is reduced to being the provider of \u2018the pipe\u2019. It\u2019s sort of analogous to a road network \u2013 the company that used to provide us with our car (finance and all), maintenance, petrol and car washing services \u2013 as well as the road network we used, together with service stations and hotels, is now just providing the blacktop. From the huge logistical enterprise that gave us everything we needed for road travel (and that also ran the big lorry networks for commercial customers) \u2013 except choice, they face being reduced to toll road operators. All they\u2019ll be is the occasional toll booth with a sleepy chap taking our payment and a crew to fill in the occasional hole. There are other companies now providing the cars, the maps, the petrol and the logistics.<\/p>\n

Even more scary for the telcos is their coming irrelevance.<\/p>\n

The reason that Microsoft went for Netscape is that Netscape\u2019s gameplan was to expose APIs to applications \u2013 this meant that Windows would become irrelevant to users and be replaceable by any old operating system, because applications only care about the next set of APIs down the pancake stack that sits between you and the hardware. Telecommunications has its own pancake stack, known as the OSI model – and telcos are facing being shoved down to the transport layer. Or perhaps even lower.<\/p>\n

Today\u2019s social media platforms are scaring the bejabers out of operators. If I spend all my time on Google, Facebook et al \u2013 and if these platforms are providing me with my telephony connections, I don\u2019t actually care very much about my telco \u2013 I don\u2019t actually see the transport layer, just the applications I use. And so the telco becomes irrelevant, whether you\u2019re Etisalat, Du, Zain, BT or Vodaphone doesn\u2019t matter to me. I\u2019m just buying bandwidth and I don\u2019t really care who I buy it from apart from price and stability \u2013 and they would all be pretty much comparable in a perfectly competitive market (which regulators are there to give us).<\/p>\n

This means operators today have a very stark choice \u2013 transform or die. I\u2019ve been saying this at conferences and stuff for a while now. Operators need to define new business models based around selling content and services that consumers want. They need to compete in the social space, they need to build complex revenue models that use the thinking that drives services like Google, YouSendIt and AVG. They need to look at those \u2018Freemium\u2019 models, indirect revenue streams and new competencies. They need to sell the stuff that smart IP networks enable – including content. Anyone planning to continue depending on the ongoing flow of easy money across the counter, cash for credits and money for minutes, is on a one-way ticket to oblivion, baby.<\/p>\n

If they don\u2019t change, and I’d suggest pretty quickly at that, they\u2019re just going to be joining the queue behind the newspapers. Like newspapers, they\u2019re not going to die overnight \u2013 just slowly and awfully collapse in on themselves, threshing around and squawking painfully on the way down. There’ll be something left at the end, but it won’t be the telcos as we know them.\u00a0 More like a number of bandwidth wholesalers. Pipe pushers…<\/p>\n","protected":false},"excerpt":{"rendered":"

Telcos are staring looming disintermediation in the face and don\u2019t have the faintest clue what to do about it.<\/p>\n","protected":false},"author":3,"featured_media":288,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[38],"tags":[39,1067,688,1765,1934,1935,143],"_links":{"self":[{"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/posts\/287"}],"collection":[{"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/comments?post=287"}],"version-history":[{"count":0,"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/posts\/287\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/media\/288"}],"wp:attachment":[{"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/media?parent=287"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/categories?post=287"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/tags?post=287"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}