Published on October 4th, 2010 | by Arsalan Mir7
The Telecom Industry – Challenges & Solutions
Guest Post By Babar Javed
Over the past decade, the telecom industry has been challenged by rapidly changing consumer demand and new market entrants that innovated to use open platforms to meet these rapidly changing needs. Needless to say, this alone has altered the future and face of communication drastically, away from traditional two way interpersonal conversations.
Traditional telecommunication providers (Telco’s) are fast losing market share, attention and an audience that could have once been there own. This is due to many reasons – it may be their own incompetence over the years as many disregard customer service and after sales interaction. But more than anything else from the internal side, it is an external breakthrough in the entire industry – and the consumers are loving it.
Internet-enabled communication models are the greatest threat to Telco’s around the world, one that is robbing them of existing and potential customers with quick sharing models. It remains to be seen if Telco’s can fight back and possibly find new opportunities for growth in a rapidly changing ecosystem which they cannot control. It is not simply a case of understanding and adapting to the new technology, but more about become experts with the extensive shift in communication behavior among users.
The new generation of digitally aware consumers now place Facebook, Twitter, YouTube, MySpace and other social networking web sites as their primary source of communication media. They are fueled by the increasingly affordable mobile internet (internet enabled) multimedia devices, high broadband penetration and of course growing acceptance of social software. All this is playing into the unsung needs of enthusiastic users, creative advertisers, CPG companies and small-to-medium enterprise Companies adaptive of social media save up my utilizing it to reach an engaged audience, building loyalty and staying in touch with partners, customers, suppliers and employees that are geographically dispersed.
There are two notable shifts in communication trends; the first being a change in patterns – from two way, point-to-point conversations to collaborative group-to-group communications. The second social networking phenomenon is reflected in the level of control over the communication environment as we see a transition towards open internet platform providers and away from Telco’s. The change was brought about by reasons stated above such as greater penetration of wireless communication networks and broadband services; including cheaper tech and open standards.
This brings the opportunity of innovative business models which have altered the competitive landscape in communications. These include:
Open and Free – Considered to be the biggest threats towards traditional services, this model offers one on one communication through an open internet platform. The most well known example in the market is Skype.
Gated Communities – Unlike the preceding model, they focus on a controlled environment and interaction with groups of similar interests and motives. It allows multiple communications instead of one on one within telecom controlled environments. Companies and professionals looking for reliable and secure communication environments are led by operator led collaboration services. Notable examples include the Premium accounts on LinkedIn and XING.
Shared Social Spaces (SSS) – Easily the most popular model followed by Facebook & MySpace, it facilitates collaboration on the open internet and become favored platforms of integrated communication. They trail with a communication infrastructure already in place, posing as a threat to Telco’s by creating cost and capacity issues for network providers with gaining a tremendous audience share.
In the short-term, traditional models are likely to maintain dominance as the industries across the globe slowly make their transition to more collaborative and open models of communication. But experts like myself believe that a significant shift can be expected in the long run; a shift towards models that facilitate sharing and collaboration due repeated instances of SSS attracting a more impactful and significant share of communication time. Between these two terms, I would advise Telco’s to begin laying the foundations towards a more open and freely collaborative future.
Step 1, Start by taking advantage of the window of opportunity in mobile social networking; use existing infrastructure (technical economies of scale) to cater to the B2B market and bolster capabilities to serve their evolving broadband communication needs.
Step 2, Acquire or partner (with players like Facebook, Twitter, MySpace and Skype) to proactively innovate the facilities customers will require for success.
Step 3, Generate additional revenue by enabling untapped participants in to your companies’ value chain access.
Step 4, Capture value from third party traffic by developing a business model around the concept.
Step 5, Work towards reducing the overall cost delivering high bandwidth content to users by fully utilizing computing and network infrastructure optimization techniques.
Over the long term, Telco’s should align the organization with the reality of change and begin to embrace two-way and many-to-many conversations to contribute towards the broader definitions of communication. They should have also have worked towards creating a fully integrated experience across fixed and internet mobile like PTCL’s Smart TV.
The C-Level leaders across Telco’s must accept these changes and prepare now, or risk being left behind in the rat race. They should educate themselves, into recognizing the speed and magnitude with which communication trends have shifted for the long term and prepare now to make brave changes to battle IT companies and information providers, vying for a the biggest chunk of communication time.
This post is also published at PMB. The author Babar Javed is the Managing Director of Mission Centenarian, health & fitness company founded in 2007, which comprises of a network of personal trainers in Karachi. He also works as the Marketing Director for Epoch Creatives (Pvt.) Ltd. and Program Director at the BodyBeat Recreational Centre (Pvt.) Ltd. Prior to all this, GlaxoSmithKline, Play TV & UBL Fund Managers had to put up with him. His key interests lie in saving the world, eliminating fat people, universal healthcare, free compulsory education & powering everything mechanical with green energy. For more information on his professional experience, visit his public LinkedIn Profile: http://www.linkedin.com/in/babarjaved