The Future of Telecom: Clouds and Pipes

Internet is the paradigm of next generation communications. One of the wonders of Internet is that it allows to de-couple Services/Applications from the access network. e.g. Anyone still uses the email or hosting services from your broadband access supplier? Most people prefer these Services independent from the broadband provider. One may need to move to a new house or a new city, and it is better to change only your ISP if needed, than migrating your web page and your email account.

Most communication applications in the Internet world are global and independent of the access network. Social networks such as Facebook, photo sharing as Flickr, video sharing as YouTube, blogging as WordPress, and VoIP, such as Skype are global services we use to communicate with others, regardless their network access. Most of these applications reside in clouds accessible by any Internet Service Provider. The ISP just provides the pipes.

And services such as Skype or Fling post a threat to the voice business that telcos have (so far) managed to bundle with the pipe access. As Wireless Broadband becomes more and more available with EVDO, HSDPA and WiMAX, Mobile telcos will need to keep being imaginative to bundle voice minutes, as well as SMS before it is cannibalized by Instant Messaging over their own pipes.

The broadband pipes are also used today by iTunes, Amazon Unbox or Hulu to distribute music, movies and TV shows. 

Tier 1 telcos, such as Telefonica, AT&T, Orange or SingTel have built an IPTV infrastructure allowing them to bundle Pay-TV, Voice and Broadband in a single offer. These telcos are capitalizing on current constraints such as content rights negotiated by country, high bandwidth required by TV and HDTV, and a complex Home Network environment, to provide a complete Service entirely managed by the telco.

As global players (such as iTunes or Google) start to negotiate contents for worldwide distribution, as pipes become more powerful, and as open devices get easier to manage by users, Telcos will need to re-think themselves to stop global players in clouds to relegate them to pure Pipes suppliers.

In a Telecom world of Clouds, Pipes and Toys (user devices), telcos will need to be smart and learn to play the Cloud game as well as allying with Toy makers to make their services more valuable than just Pipes.

3 thoughts on “The Future of Telecom: Clouds and Pipes

  1. josempelaez

    Jose Miguel, I entirely agree with your view about the position and needed evolution of tier one telcos. In this regard, I understand that Telefonica is moving toward “cloud services” under the «Respuesta Empresarios» umbrella.

  2. helena

    Jose Miguel, do you know who came up with the expression – Clouds, Pipes and Toys, or you coined it?

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