Craigslist Iptv
Abigayle Laurenitis
LinkedIn and 3rd parties use essential and non-essential cookies to provide, secure, analyze and improve our Services, and to show you relevant ads (including professional and job ads) on and off LinkedIn. Learn more in our Cookie Policy.
We continue our Zoom Out journey for Telco 2030. We ended the part 1 with a vision of the sector and KPIs based on the impacts of technology, customer invariants and disruptive competitors. The key elements of the vision are more connectivity than ever (Gbps for mobile, with current supercomputers as devices and
From this vision we move onto the disruptions that we can expect and the impact they could have on the value chain. For the disruption, we will use the Center for the Edge's nine patterns of disruption and explore which ones could impact the telco sector and what the impact would be. For value chain evolution, we will put everything together at look at each element of the value chain and what can happen with it.
Disruptions have always been around. From the English longbowmen getting the upper hand on the French heavy cavalry to Kodak's film empire being destroyed by digital photography. There are many types and theories of disruption, each applicable for different cases. The Center for the Edge has created a catalog of disruption patterns which can be used to examine any industry. For the Telco 2030 we have selected 4 types of disruptions that might be aplicable for the sector: Unbundling profitable services, Converging products, Unlocking underused assets and Demonetization.
Unbundling profitable services is one of the most painful disruptions made prevalent by the internet. It happens when one of the services that comprises an offering is launched independently at a much lower price by a competitor thanks to enabling technology. When this happens use for that feature typically skyrockets and monetization drops to a fraction.
The canonical example is craigslist and its many imitators killing classified ads for most newspapers. Classified ads were a very lucrative part of a newspaper, and critical to make the physical newspaper profitable. craigslist made them free and monetized through advertising if at all, leading to an explosion of ads and a collapse of revenue. Skype and Whatsapp did the same to telcos with voice and SMS respectively. The price of per Megabyte of voice and SMS was much higher than that of pure data, so ubiquitous broadband allowed to unbundle it for free. Eating away voice and sms revenues in the process .
As performance skyrockets through accelerating computing and storage technology what few parts are left in the telco bundle could be disaggregated as over-the-top services working at arm's length with connectivity:
Telcos will have to rethink their business without their current bundled businesses. Can they make it profitable, specially in the B2B side? What will it require? Can they capture the independent over-the-top businesses that will arise? How can they command customer loyalty in this scenario?
This disruption is the opposite of the previous one. It is one in which a product becomes part of a bigger whole and loses its independence. Thus control moves to the company that sells the broader solution. A classical example of this is digital cameras being bundled into smartphones. The risk for telcos is that they will be left with almost pure connectivity according to the previous disruption. This connectivity could easily become part of a bigger whole which they don't control.
Pure connectivity is an increasingly commodity product which both consumer and business customers will increasingly experience in the context of software, devices, content and cloud services. The leaders in this space are the usual gang Amazon, Google, Apple, Facebook, Microsoft, etc... They could easily integrate connectivity into their offering. Some early examples already point the way: Project Fi, a global aggressively price connectivity service for the Google Pixel smartphones, and the Kindle with included wireless connectivity which can download books for you wherever you are.
Losing the customer relationship could be a large blow for telcos. Can they compete effectively to capture this overall relationship? What could they bundle for their customers? Can they survive just in wholesale?
There are a lot of unused time and resources in housing, cars and computers. That has been the origin for businesses like AirBNB, Uber and AWS. The unlock assets pattern of disruption takes existing assets that are underutilized and leverages them to disrupt an industry in an asset light way.
Unlocking assets is relevant for telcos because one of the most underutilized resources on Earth is bandwidth. Even core lines that aggregate demand are often at 10% capacity. Consumer and SME connections are usually under 5% utilization. That bandwidth is waiting to be used and shared.
The technological trigger for this disruption is the softwarization of networks. In a hardware based network it is extremely expensive to add a new node or to police the traffic. Thus it makes sense to have wasted bandwidth. In a software based network it is almost free and immediate to add and police connections. This allows to maximize use for all potential connections. Google has already used SDN to take the usage of some connections to 90% with tremendous cost savings. Fon has been trying to share WiFi between users for more than ten years and has already reached millions of hotspots.
In a world of trillions of connections and billions of access points the software-based dance between connected things and available networks will be critical. The consequence for telcos is that any capacity they rent out to someone will be sublet again (think Fon on steroids for consumers and SMEs), and anyone with physical assets that can be used for connectivity (e.g. Municipalities, Utilities, etc...) will open then up. This will create a glut of connectivity options, especially in cities and other areas in which there is a lot of infrastructure. This will push down connectivity returns to the hurdle return on investment rate for the most abundant assets
Finally, as we saw in part 1 we will see costs plummet. AI and robotics will reduce personnel costs and SDN and digitalization will reduce hardware investment and operation costs. This continuous cost reduction will be transmitted to prices due to the price pressure of asset unlocking in networks and attempts to bundle connectivity in other services by large digital players who don't care about connectivity revenues.
Overall this will lead to a demonetization of the connectivity services which will become cheaper and cheaper, even considering performance improvements. This will be even accelerated by the taking out of the bundle and demonetization of bundled services like VPNs, security or video.
The impact of this for telco profitability will depend on the pathway of demonetization. If telcos manage to take costs quicker than prices are eroded they can achieve substantial profitability. If they face rigidities to capture cost reduction, other players will set the marginal price and squeeze telco margins significantly
This picture points to significant pressure in the coming years for the telco sector. The economic implications of this will be substantially determined by the speed of the cost improvement vs. revenue deterioration which is very difficult to predict.
Regulation will be a key determinant of how each element of the value chain evolves. Only regulation has forced the opening of networks through ULL and MVNOs, or now through iSIM. A less intrusive regulation could allow telcos to make more of their capability to avoid the disruptions. How regulators manage this transition will be key for the future of a sector that has been strategic in terms of digital transformation and an important contributor to employment and R&D. Asymmetric regulation, in which licensed spectrum, infrastructure and services are subject to significant regulations and tax levies while over-the-top players and unlicensed spectrum and infrastructure are unregulated could be specially negative for them.
c80f0f1006