Is connectivity – even enhanced connectivity – a service?

Image credit | tauindeed

Connectivity was a focus during the recent DSP World Leaders Forum and it was frustrating and interesting in equal measure.

While one telco made the point that “there is inherent value in connectivity” another (from the same company) was frustrated that customers saw his company simply as a connectivity provider. He would like them to see his organisation as a technology company, an enterprise that has created solutions of its own and can therefore be a major part of ‘co-creating’ solutions with customers.

There was, once again, too much talk of connectivity, thus the frustration. One telco exec admitted that he “had not figured it out yet,” referring to solutions within current environments. The same speaker said “we do not know what 90% of our technology will be used for” and another admitted that they take constant technology gambles for the same reason.

Another speaker talked about the company’s new app, which is proving popular but referred to connectivity as ‘content’.

Every other speaker made some mention of the truth that they should be customer-driven and not technology-driven and then went to talk about connectivity and technology, much to the frustration of the mild-mannered moderator, Guy Daniels. Most speakers hid behind the ‘green shoots’ argument and said things like ‘the next phase will be an enormous evolution, not a revolution.’

Most still seemed to equate more traffic to more revenue and if telcos would come clean and say ‘we are just connectivity providers and very good ones,’ we would stop discussing how much more they could be and get on with our lives.

The frustration was also obvious among the online attendees. A poll alongside the session ‘Digital Services Markets and Business Models’ made for sad reading.

The question was: ‘Is identifying and launching additional digital services critical to the survival of today’s CSPs?’

71.4% of respondents said ‘new revenue-generating, digital services are critical to survival’. Some said additional services would be useful but not critical and only 7.1% said that telcos should focus simply on network connections and leave others to build the third party applications.

We know that 95% of the revenue from digital services goes to those third parties. Some will say they ‘partner’ with telcos (while still taking the lion’s share of that revenue).

The point is that if telcos believe that ‘services’ include connectivity, SMS (perhaps RCS), data and that is about all, then they are, without doubt, missing several tricks.

And now that we are moving into a complex digital world where, in the words of Neil McRae, Managing Director and Chief Architect at BT, “there is not a single company in the world that can do this alone” it seems, now more than ever, that telcos are pushing themselves into the realm of utility companies.

This is fine if they are happy with that, but it seems a waste when there is so much more revenue on the table than that derived from connectivity alone.

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