Resurrecting the Communications Business Model
The woeful state of the telecom growth reflects an industry oblivious to the power of its core value proposition - communication. The conference schedules offered 55,000 people attending GSM World in Barcelona and a similar number expected at CTIA Wireless in Las Vegas include no sessions on voice communication. Mobile apps, social media, and banking, but no sessions on the topic that still accounts for 70% of industry revenue. Ditto for (the canceled for 2010) wireline sector Supercomm event last October.
The word "communication" arose in the 1400's as a label for the process allowing humans to reach a shared understanding. At the time, communication required getting together in-person. Dependence on proximity started to decrease with the arrival Johannes Gutenberg's printing press in 1440. A familiar list of subsequent innovations through and including the Internet further diminished proximity as a requirement for human communication. Several of these innovations including the printing press and the telephone altered the communication landscape to a degree that produced a reorganization of civil society on the planet.
The declining fortunes of telephone companies reflect a failure to understand people value the outcome of communication - achieving a shared understanding - not the mechanism of communication. The traditional telephone call suffered little competition in this regard before the arrival of the Internet. People with questions in 1994 did not have a Google search as an option. They picked up the telephone and called someone.
Before the Internet, maintaining business and personal relationships involved substantial time on the telephone. The increasing refinement email and a steady stream of text and image communication innovations like Facebook and Twitter leave telephone calls a last resort necessary only in those contexts too urgent or too complex to address by any other means.
A misunderstanding about the source of value represents the root cause of the problem, and the relative pace of innovation between telco voice services (zero) and alternatives (substantial) represents the principal symptom. The pockets of prosperity that do exist arise in the limited areas enjoying investment and innovation. The utility of voice as a medium for communication is not in doubt, but traditional telephone calls offer less voice quality than AM radio and drop 2/3's of the voice energy available in-person.
Orange's plans for high definition voice trials in Europe represent a significant development, but any means of diminishing proximity's grip on communication will suffice. The effort to close the gap between communication tools and the multi-dimensional means of communication available in-person will not end any time soon. Leaving voice services unimproved for 40+ years reflects a process of improvement that still needs to start.
The pursuit of excellence telephone companies apply in the case of reliability needs to extend to all the dimensions restricting communication to those contexts where people meet in-person. The transformative power of communication innovations and the revenue potential of a communication business model far exceeds anything that might arise from app stores or any of the other data services occupying conference attendees in Barcelona and Las Vegas.
posted by Daniel @ Saturday, February 27, 2010
<< Home