“What are the three big lies of the telecoms industry?
The first lie is that data monetisation is coming. Well we are still waiting.
The second is that we have billions of customers. Well are they really our customers or are they people who just tolerate us and are really customers of someone else?
The third lie is that we are utility so we have stable returns, and because we have spectrum allocations that is our safety net. EBITDA multiples for the telco industry were at around 6, while utilities were at multiples of 12 to 16, so it could not be said that telcos – which often had up to five competitors in markets – were utilities.”
Three valid points. OSS / BSS could be highly influential in whether these are actually lies or not.
If we think of data as carriage, that’s clearly not monetising for most telcos currently. Well, it does bring in revenues but at a diminishing rate per bit. If we think of data in terms of content (eg voice, video, text, etc), then there are some monetisation wins (eg Game of Thrones) but more content is coming on line so there is more supply, making the profitability tail longer. If we talk about data as insight (or supporting the generation of insights if selling analytics or API offerings) then this will never go out of fashion (although with more “insights” being generated, the bar will be raised on what is truly insightful)
Alexey’s note here that our customers just tolerate us and are really customers of someone else possibly has some merit. It’s the reason why the OTT play has been so successful. I still have the sense that there is an implicit trust in our service providers, due to the long subscription/billing history, media / shareholder attention on them and regulation that governments place on them (even if not an implicit trust in their customer service). Not all OTT players have the same track record of regulatory governance. Some OTT providers are invisible, hidden somewhere out on the cloud. I feel that this could represent a strong opportunity in a world where crypto-currencies carry vastly more value than they do today.
This comes down to the business model of any given Telco and / or the regulatory frameworks they operate within. They could opt to go down the path of ubiquitous data (like ubiquitous voice of the distant past), or like most, they can go down the path of being a digital service provider. To be honest, there are probably quite a few incumbent providers that are probably more closely aligned to utility than DSP in the collective way of thinking within their workforce. That often transfers to their mindset in building OSS.