Telcos in a Clouds & Pipes World

The previous post might have look pessimistic about telcos when defining the future of telecom as “Clouds and Pipes (and Toys)”. In reality, it is just an analogy to describe what is already happening with “Over-The-Top” players delivering applications and services through Internet telco’s infrastructure with more and more intelligent devices.

How can Telcos find new opportunities in the new model? Telcos have some assets that could be valuable to Clouds and the end-users :

– Trusted billing relationship with users

– Customer profile: location, travel habits (roaming statistics), spending habits, response to promotions, home address

– Trusted brand to deliver a reliable service

All these assets can also be easily bypassed and ignored by over-the-top players. One example is Skype. Millions of users have a direct billing relationship with Skype for SpypeOut and SkypeIN. Skype has a customer profile no second to telco’s, including credit card information, billing address, Paypal behavior, country and contact list.

But a more profitable approach for the operator has been taken by Apple with iPhone. Apple is also an over-the-top player with a direct billing relationship with customers for iTunes, including its App Store, that sells more over-the-top applications. Still by partnering with telcos to sell the iPhone through them with mandatory flat fee plans for voice and data, Apple has help telcos to retain at least voice as a telco service and give users a reason to subscribe to unlimited data plans, that will support Apple apps.

Even if iPhone ever supports Skype, why would anybody use it if you already have voice as a flat fee?

The video clip is an interview from Om Malik to Josh Silverman of Skype

4 thoughts on “Telcos in a Clouds & Pipes World

  1. josempelaez

    I am not familiar with “Over-The-Top” players terminology. I understand that you mean just some outstanding ones, as Skype or Apple, and thus limiting the telcos contenders in Internet considering the assets they already have, which I agree with.

    What I dont’ see is that «intelligent devices» seem to be the key differentiator. I would be more with you if the rational was related to “intelligent services” or “touch-of-class terminals”.

  2. Jose Miguel Cansado

    Hello Jose M
    Thanks for your comment.

    “Over-the-top” players are those delivering applications on top of existing IP infrastructure. See links:
    http://www.imediaconnection.com/content/15893.asp
    http://www.heavyreading.com/details.asp?sku_id=1728&skuitem_itemid=1026

    Term mostly apply to video services such as Apple TV or SlingBox that are delivered over Internet, posing a threat on IPTV services delivered by broadband providers.

    For more and more “intelligent” devices I refer to more and more “capable” devices, such as iPhone, Blackberry, Windows Mobile or Android handsets able to do more and more: better browsing, video, GPS, etc. Being open, users can install on them more and more sophisticated applications beyond control of the operator.

  3. Pingback: Clouds and PipesDisruption Matters | Disruption Matters

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