Wednesday, March 27, 2013

Telcos: from cash cow farm to worker bee hive.

Telcos are in a challenging position, they have to change to adapt to the new times and new competition and it is not easy. Traditionally services providers business models were based in a few cash cows under their control or farm, and customers customed to consume milk forever. The life expectancy of a cow is about 20 years. It was quite easy till now, telcos invested in networks and they have milk for years and years to sell to their customers.

Companies using the data connectivity, so called OTTs, had cannibalized the revenues from sacred cash cows and it was a fast process when combined 3G and smartphones rise.

Net neutrality is here, it is here to stay, and it is fair that net neutrality exists. The service providers may not leave the tradidional role of providing "communication services" to become "just pipe" but they may adapt to new times and new ways of creating and offering "communication services" to their customers. It is time to compare cows and worker bees.

- Cows live 20 years and bees live about 100 days.
- Cows tend to live in a closed farm and be a reduced number (tens, hundreds in each farm), worker bees are living thousands in each hive.
- The milk from a cow is measured in litres, the honey produced by each hive just grams.

Business analogies are clear:

- Money will come from honey sweets.
- Each revenue from a worker bee will last a reduced time but new services-sweets will be replacing old ones in a very fast cycle, the same observed in OTT space.
- Big amount of bees can not be in a telco closed environment and fully under control, bees will be also 3rd parties.
- The hive will be the API and the API will keep the produced honey.

What is the new role of the telco, becoming the perfect hive, exposing their enablers (Voice, IMS, RCS/joyn) to be a good home for developer bees and also creating a model were bees also could feed themselves from their honey production.

Telcos may become hive / platforms. The sooner the better.

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