As I start my August break from blogging tomorrow, I thought I would review the last couple of months and provide you with a handy list of 10 recent posts on telecoms strategy that got some traction. For each I provide a one-sentence extract just to give you a feel.
#1 Telecom financials: A glance at the state of the sector: The European telecoms sector has not covered its cost of capital in years, which means More…
“Much of the growth in the overall telecom ecosystem has been captured by the electronic products companies that make smart- phones—the devices, ironically,that have put so much pressure on telecom networks and forced operators to invest so much money in upgrading them to handle the ongoing data tsunami they face” ~ Booz Allen
Do you agree with the received wisdom amongst telecoms players: that online service providers are generating unsustainable demand and free-riding on telecom networks? I don’t. More…
Telcos’ core product – broadband connectivity – is undifferentiated and commoditised because it is inadequately defined.
In my post “Telecoms will never be a dumb pipe” I argued that broadband networks are not pipes and that a better metaphor would help strategic thinking in the industry. I referred to the multiple dimensions of pricing freedom that post offices and logistics services use, and said that current broadband pricing approaches – peak rate or volume-based – were inadequate to the FASP4 Space layer job of maximising economic returns on the network assets.
I mentioned that road networks (and by extension, rail networks) have more in common with broadband than electrical wires or water/gas pipes. Let’s explore the analogy to see why broadband pricing is resulting in an investment crunch. More…
Telecom operators will never be dumb pipes. Dumb, maybe, but not a pipe.
Metaphors are important, and the wrong metaphor can take us in wrong directions. The fact that something has been chosen as a metaphor means that it is a more vibrant, familiar and/or immediate depiction of a more abstract or complex idea. Consequently, we can easily find ourselves doing our thinking using the metaphor as a reference point. So the repetitive description of networks as ‘pipes’ increasingly freaks me out! Why? Because the techno-economic characteristics of plumbing are More…
What would you say are the economic characteristics of the telecoms industry’s most unique asset? How can operators create value at the network layer?
“The network” is often seen as the key telco asset. And with good reason: thousands of companies can create content, write apps, distribute video – but only telecom operators can manage the delivery of all that content across space and time. As Martin Geddes says, only telcos can sell “absence of delay in the delivery of information goods at a distance”. But have we really fully understood the economics of networks and the connectivity business? More…
Since the telecoms market liberalised – over 15 years ago in the USA and most of Europe – the primary battleground for competitive advantage has been at the Place layer of the FASP4 framework. There was simply not enough physical telecoms infrastructure – ducts, cables, towers – and so there was a prime opportunity for those with enough cash to build out.
And, since exclusivity is the prime driver of value in the Place business, these early movers were often handsomely rewarded.
The ‘race for place’ happened More…
When you think of the telecoms business what springs to mind? Probably a mobile device or a box with flashing lights (switch, router,…). Perhaps it should be a shovel.
Physically reaching the end customers with the network is a major source of value in the telecoms industry. According to a 2014 UBS analysis, Openreach – the part of BT that is responsible for the More…
How can you think clearly about the different sources of value and competitive advantage in the telecoms sector? How can we think about where the market turbulence we see around us might be headed?
To think strategically about anything often means isolating the different drivers and understanding the influences on each driver. In telecoms, there is a lot going on, so without a consistent interpretative grid it can be hard to see More…
Almost 70% of global telecoms revenue growth over 2009-2013 came from growing classic telecoms services in emerging markets, according to a recent report by Booz & Company). The problem is that emerging market growth just delays the day of reckoning.
One of the reasons that telecoms revenue growth in developed markets is so anaemic these days is that voice and broadband have just been too big for too long! Rather than develop new strategies for the future and experiment with new service categories, it has been so easy to ride the next multi-billion More…
In their 2013 Value Shift Index report, Booz & Co wrote “despite moves into the software and IT services, intermediation, and media and content segments, [telecoms operator] growth through diversification strategies has proved anaemic“.
The $1.4B telecoms market is developed markets is mature, with an average growth of well under 2% since 2009, according to my calculations based on the Booz report.
Telecoms operators have launched various diversification strategies to broaden out of core telecoms services into software, media and content, and IT services. Whilst some operators have seen More…
