air, land and sea “attack” on Telcos

It’s Happening Google Fiber, Google loon, Facebook’s Titan Drones acquisition, national broadband projects with local ISPs (fiber/Wifi/4G Wireless ISPs etc), OTT Apps with full fledged multimedia messaging and collaboration...

It’s Happening

WarMarchGoogle Fiber, Google loon, Facebook’s Titan Drones acquisition, national broadband projects with local ISPs (fiber/Wifi/4G Wireless ISPs etc), OTT Apps with full fledged multimedia messaging and collaboration and the list goes on with the initiatives around Internet Access. The list of efforts, initiatives and ventures for Internet access are increasing, and it’s a wonder what the future holds for traditional Telco’s in the “Internet Access” space. Will that be the promise of LTE/5G or Telco’s need to get on board with actually playing a part! Facebooks just launched app, Internet.org (http://internet.org) in Zambia in collaboration with Ericsson may be seen as a new model of partnership that is gearing up between OTT’s and OEMs. Telco’s just become the after-thought. Indeed many other OEM’s such as Samsung, HTC and OTT players have been known for their bold initiatives of enabling new business models that continue to “jacket” place Telco’s into the “pipe robe”. Of course, Telco’s realize their primary aim for now, monetization, but as part of their claim of wanting to be significant, will this be a prudent scheme, that “partnership” founded on this business model can be sustainable and survive the long haul? Internet.org estimates that about 80% of the world’s population that isn’t online lives at least within basic 2G cell phone range, and yet Telco’s are still not initiating real innovative models to bridge the “2nd-Level” digital divide (1st level was basic voice telephony) of realizing solid and basic Internet services in these areas.  (Some attempts fostered through OTT services provide for rendering webpage’s in stripped down versions of SMS still using the traditional Telco charging business model). In 2010/2011 Google announced its plans and city selection for Google Fiber project. A project that got a lot of US communities clamoring to be a part of the first few to gain access to the Google Internet initiative has seen unprecedented success. Wherever it has landed, it has provided flexible and basic access models addressing the fundamental zest of consumers to have basic Internet services for free.

Questions

What are the chances that Internet Access based on the current Telco models will be outdated, and perhaps sooner than thought of? Facebook’s mission, and further more investment into the Internet.org project is taking another step towards its goal of bringing basic Internet access to people – moving beyond rhetoric and acting on it. With potential services such as Google search, Weather, Facebook, Online Libraries and other fundamental Telemetry services to become available services on the medium, the essential Internet services required by most under the “basic Internet access” needs shall become basic services, aka 911 of the Internet. Will such an initiative force Telco’s towards enabling same-level access on their networks further reinforce the role of Telco’s as pipe? On the flip side, Telcos are investing. Investing into expanding their IP/data capabilities through higher speed and wider access bandwidths on their air-interfaces, creating competitive head-on solutions to counter-OTT e.g. Joyn (http://www.joynus.com) and implementing new deep packet inspection tools to screen and differentiate experience of OTT to force consumers towards a differentiated monetization schemes – still maintaining pipe mentality. The promise of Telco’s continues to dwell more on realizing “new age of pipe”,  that is, hinged on “premium” access to support concepts such as Internet Experience, Always-On Multi-media appeal etc,  and yet the business model managing “Internet Access” is shifting more transformatively.

Strategies?

The “roller-coaster” ride masterminding free and basic Internet Access is just starting, and with initiatives championed by big OTT & IT Companies such as Google, Facebook, Opera in tandem with OEMs like Ericsson, Nokia Qualcom, Mediatek etc taking shape gradually, Telco’s have got to up the ante by jointly playing significant beyond the dream of anything “pipe”. The playing field that was once dominated by Telco’s will, eventually by the combined efforts of OEM’s, OTT and ITSPs, change without room for reversal. Models are/will emerge that see partnerships between OEM’s and OTT, Semiconductor companies and OTT companies over-the-head (OTH) of Telcos. OTH will become a new game that incorporates OTT apps at the device level with manufactures like Samsung, HTC, Microsoft seamlessly becoming not just end-device manufactures, but the significant service providers with control over the access route.

Stuck in Old ways

The current business mode of Telco’s needs to seriously be re-adapted for the age we’re in or entering into (in the case of emerging economies). It is still clear that traditional Telco management boards still wish to stretch the old ideology a little longer of what a Telco’s role is, but at what sacrifice? Telcos aren’t generating content or adding value to content. Partnerships that exist with content providers squeeze content originators to the max, with alternate content based services such as integration with advertisers lacking cooperative models that support content syndication, “teasing or preview”. Shareholders of Telco’s continue to see “their” big picture from one-dimension, that Telco’s are investing in capacity and that capacity needs to be “weaned” back through the old fashion way as per the business plan – within 3 – 5 years. As a result of this ideology, Telcos continue to pass-on invests in realizable social benefits of services without an immediate economic value. Still a concept of the old telecom business operating model, this “arrogance” of “our role” is not transformative enough to shift from the mentality of “I am pipe”. If Telco’s fail to innovate into the next wave of access and services enablers, like investing and partnering with OTT apps from their incubation to limelight, (E.g. location based Ad services, Telemetry solutions, connected Apps etc to truly enable the value of IP without forking out a Telco specific IP base, e.g. Joyn) such shortsightedness will have far reaching ramifications. In the future, users won’t care a lot about who their providers are, but rather the Apps and the services they get. In localities and situations where Telco’s have a strong hold on consumer access or continue the approach of getting in-between users and OTT services, device manufacturers, OTT players and ITSP will overlay Apps and device operating system logic with alternate-blanket laid Internet access solutions, such as WiFi, with device default policy locked to bypass the Telco’s network, therefore attacking the Telco’s last frontier as a provider of “smart pipe”.

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