The
telecom company of the 21st Century is a software company.
It is hereby dubbed the "Softcom." Gone are
expensive installations and maintenance of PSTN networks.
Softcom's hallmark is its use of software, soft-switches
and the Internet Protocol to route data across millions
of Internet routers across the world. Voice is just
one of many data applications across its myriad of IP
connections. Broadband connections to the home and office
have opened up what was the privilege of those who owned
the last mile. Customer service is courtesy of your
best friend.
Even the most mundane industries change. And in that
flux of change lie exciting and lucrative opportunities.
Don't presume the future
lies with a new kid on the block! Apple has proved
time and again that it, not the start-up, is the custodian
of innovation in the otherwise mundane and commoditized
PC industry. Innovation and disruption can happen
at any juncture - and by anyone. The Softcom may be
the most likely agent of change; but it's far from
guaranteed to be the only agent or to succeed.
What does this new Softcom
look like? What are its assets when it runs on an
asset-light basis? What will be its revenue model?
If it ultimately has to play the voice minutes' game,
will it end up being any different from the telecom
it seeks to displace?
What does this mean for the telecom company as we
know it? What does it mean to own legacy infrastructure?
Does it fight the Softcom, partner with it, or indeed,
become it? Will its deep technology, customer base
and telecom operations experience ultimately make
it a winner?
What does this mean for
the mobile network operators? Will the Softcom challenge
its ubiquity? And drive prices down to nothing. Will
the fixed line telecom and the Softcom become best
friends and take on the MNOs?
Is the triple play of
voice, data and video is just the beginning of things
to come? If that's the case, why won't that get ultimately
commoditised making the Softcoms and telecoms companies
just like other utility companies. Telecoms could
look more like cable companies with data pipes being
their business.
From the Internet world,
we learn it's not just content but transactional content
that wins. WYSIWYG doesn't make money, it's What You
See Represented Is What You Get that does. Put simply,
it's not the feature on Slate magazine that makes
money - it's the deed of a house ownership sold on
eBay that does.
Will that make money
for Softcoms, telecoms and MNOs? Could the most valuable
service be the enablement of transactions? From money
transfers, payment systems, betting and online banking,
the most valuable service might involve the ubiquitous
and convenient trading of cash itself.
And that lends itself
back to the software-based Softcom.
Reprinted from AlwaysOn
18th January 2005
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Ariadne
Capital Journal - Through the Maze Volume
5, Edition 1
