Category Archives: Telecoms

Industry view

Nespresso and the future of telecoms, part 2

Richard Medcalf Posted on 24 March 2015 by

In my previous post, I explained how Nestlé built a new product category by moving from a supply-oriented business model to a customer-orientated one.  Here how telecoms firms might start asking the right questions to follow their lead.

video conferencing new telecom business models

Recently I have been helping a large global telco reinvent their video communications strategy.  As we reviewed some strategic options, their SVP noted that the ‘only way we will get the CEO and CMO interested is if our video strategy drives demand for our core connectivity services.”  He was spot-on, of course.  But as we discussed we realised that More…

Nespresso and the future of telecoms, part 1

Richard Medcalf Posted on 20 March 2015 by

Nespresso is a great story in business model innovation – but have you wondered where the telecoms equivalent of Nespresso might be? Here is one possible answer to that question.

future of telecom nespresso innovation

The story of how Nestle launched Nespresso in the context of a utilitarian, and stagnant/declining commodity coffee market, and created and dominated a new product category, is a business-school favourite.  Once, it had to be specially incubated and protected from internal sceptics who doubted the firms to commercialise such a premium offering direct to consumers, and who felt it would make only marginal difference to coffee shipments. Now it’s a $3 billion business growing at 20% per year.  What lessons can we take away for the technology and telecoms market? More…

3 reasons why the Google MVNO deal makes sense

Richard Medcalf Posted on 26 January 2015 by

Last week’s rumours that Google has signed reseller deals with Sprint and T-Mobile to become a Mobile Virtual Network Operator (MVNO) confirms something I’ve thought for a while.  Telecoms service will be increasingly sold by the Internet giants. Here are three reasons why.

Google MVNO deal seen in FASP4 framework

We know that Google has entered telecoms before with fibre service in selected US markets.  That seems mainly intended as a provocation to get US telcos to step up and improve access networks more extensively: a small bit of disruption to get incumbents off the couch and investing.  There are indications that Google views the MVNO project in a similar way: an experiment to get carriers to step up and improve their service.

However, retailing a service from the existing providers (Google MVNO) is very different from threatening to enter the infrastructure market (Google Fibre).  Google Fibre is a provocation; Google MVNO More…

Why don’t device manufacturers complain about ‘Over The Top’ ?

Richard Medcalf Posted on 23 January 2015 by

I just came across this nice summary of global market revenues associated with mobile technology, courtesy of BCG.  $3.3 trillion in 2014.

Mobile revenue split 2014

Source:
“The Mobile Revolution”, Boston Consulting Group, 2014

What struck me (by virtual of the two-dimensional layout rather than a typical one-dimensional value-chain diagram) was that the $530 billion mobile content and apps market – generally seen as freeloading “over the top” services by mobile operators, depends on More…

A word on telecoms structural separation

Richard Medcalf Posted on 14 November 2014 by

Following on from my series on the FASP4 framework, people have asked me whether I am for structural separation of telecoms firms.  Here are some initial thoughts.

structural separation

Many telecoms businesses are managed as a single vertically-integrated entity.  Think of many cable companies for example. The retail operation (FASP4 Face) is within the same company as the product factory (FASP4 ACE), the network (FASP4 Space) and the physical digging of new customer accesses and ducts (FASP4 Place).

I’ve nothing (particularly) against managing different business objectives in one corporation.  After all, this is why More…

Telcos and customer relationships: double or quits?

Richard Medcalf Posted on 7 October 2014 by

Do you think telcos should reinvent themselves as consumer brands, or go the other way and delegate all their customer-facing activities to big Internet players? The answers lie buried in the economics of ‘Face’: the customer management business.

telecom customer relationship fasp4

We have almost completed our systematic review of the economic underpinnings of each layer of the FASP4 framework.  This may have felt somewhat laborious, but unless we get the differences between the different layers clear, it will be very hard to More…

Facebook: 4x more relevant than telecoms players? The loss of the network effect

Richard Medcalf Posted on 19 September 2014 by

Historically, Service Providers enjoyed the benefit of the network effect via the ubiquitous connectivity provided by the public switched telephony network. However, today’s larger Web players are dwarfing the connectivity provided by individual Service Providers.

Network Effect - Value per User Telecoms Reach Analysis

For Service Providers to exploit the network effect in the future, they need to partner with other Service Providers in their home market, target specific communities of users or aggressively promote a compelling More…

2 ways to improve telco success in apps & content

Richard Medcalf Posted on 9 September 2014 by

If telecoms operators want to continue to play in the Applications, Content and Experiences business, they need strategies for richness and reach that don’t play into the hands of their online competitors. But the telco sweet spot has moved without them necessarily realising it!

Telecoms Service Segmentation Matrix ACE FASP4

As I explained, success in the ACE layer revolves around building richness and/or reach. Richness is the product functionality, and reach is the ability to interact with other products, services, devices and users. There is a missed opportunity to More…

Why “App Economics” cause telcos to stumble

Richard Medcalf Posted on 2 September 2014 by

You want to launch new services and applications, deliver compelling content, and monetize your network, like all telecoms operators.  But the stark reality is that telco success in this area has been abysmal.  Why is that?

app economics fasp4 framework

An executive at a global telecoms service provider pointed out to me last month that “we invest billions in the network but customers don’t appreciate the complexity of a cell-site hand-off. Instead what they see – and appreciate – is More…