Why telcos would rule the world if they got their act together

Telcos have certain unique characteristics and capabilities that could easily provide real competitive differentiation for them in a number of market niches. If they were innovative service and client oriented firms, rather than utilities simply looking to get a return on investment from sweating their infrastructure assets, then their competitors would need to look out.

[easy-tweet tweet=”Could a #telco be threatening your business in the future?” user=”billmew @comparethecloud” usehashtags=”no”]

Telcos could rule the world of Hosting

At a time when hosting providers are investing enormous sums in new data centre facilities, telcos have legacy real estate assets in the old exchanges that could be incorporated into a virtual data centre network with points of presence in almost every locality. BT for example owns hundreds of properties within the Greater London area. Many are exchanges that once housed bulky telecommunications equipment, but they are typically now largely empty apart from a set of switching gear in one corner. The rest of the space could be used to host racks upon racks of compute and storage. Every one of these properties is ‘on net’ and collectively they could be used to provide a compelling hosting proposition. The cost to BT would be limited. It would simply be making better use of existing real estate. Other legacy telcos are in a similar position. And none of their rivals has this vast array of ‘on-net’ real estate assets.

Telcos could rule the world of Cloud Services

In a keynote at Telco Cloud in London earlier this year, Teliasonera made an interesting prediction of how the cloud market would play out, saying that “the winner in this business is the one who creates the most compelling offering based on services that others have innovated.” As we are seeing with the emergence of Cloud Service Brokers and MarketPlaces, it is often all about bringing together the right set of services and making them available in an easy and compelling manner to a focused and relevant client segment. In cloud services the telcos are taking on the big boys of the tech world from legacy firms like IBM and HP, to new players like AWS and Google.

[easy-tweet tweet=”#Telcos already have a direct relationship with almost every consumer and SMB in the country” user=”billmew” usehashtags=”no”]

The thing about these large rivals, and in particular IBM and HP, is that they are predominantly focused on serving large enterprises and despite their best efforts at channel management have always struggled to reach or be relevant to consumers or SMBs. The telco advantage here is that they already have a direct relationship with almost every consumer and SMB in the country with a monthly bill for usage based services. These services have already expanded from telecommunications, to broadband and TV, and could easily be extended further using the right marketplace to offer a range of consumer oriented or SMB oriented services. They don’t even need to innovate to create these services, they simply need to bring together services that others have already innovated in a compelling manner. The providers of the services would jump at the potential market reach that this would provide. Again telcos are in a unique position here. None of their rivals have this reach or indeed this existing billing relationship with the entire consumer and SMB community.

Telcos could rule the world of Apps

Each mobile phone has a unique identifier associating it with a particular user. It’s the phone number. In addition to knowing who you are, a mobile telco also knows exactly where you are, and they have a billing relationship with you. These characteristics are invaluable to any app developer.

Why is it that when you log into an app on your smart phone, you still have to use your Facebook or Twitter ID to identify yourself? The telco already knows who you are.

Why is it that phones use GPS to find where you are for location-based services, when the telco already know where you are?

Why do you need to use a credit card or Paypal to pay for a service when the telco already has a billing relationship with you?

Unfortunately telcos have been slow to offer APIs for mobile app developers so these developers have needed to find other ways of doing these things. Any telco anywhere in the world can almost instantly find you – they have to do so to route a call through to you, and it would be quicker and easier to get identity and location information directly from telcos rather than use the existing work-arounds – if only the right telco APIs were available to the developer community. Again telcos are in a unique position here. None of their rivals can identify and locate or even bill you as easily as they can.

telcos are in a unique position

In reality I am not suggesting that telcos could, or would dominate any of these markets, but that they have a compelling competitive advantage that could provide them with a valuable proposition to offer to each ecosystem. The thing is that it is not the way they work and not what they do. It could be, but it isn’t. Think of the missed opportunity cost here and multiply if by the number telco clients worldwide (that’s almost all of us, in the developed world at least). 

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