Why does everyone know an operator’s business better than the operator?

The headline today blatantly steals from a post by William Webb. You can read his entire, brilliant post here. All quotes below are from the article.

William’s concept aligns quite closely with yesterday’s article regarding external insights that don’t quite marry up with the real situation faced by operators.

“At the Great Telco Debate this week there was no shortage of advice for operators. Some counselled them to move up the value chain or branch out into related areas. Others to build “it” so that they would come… But there were no operators actually talking about doing these things.”
Funny because it’s true.

“In most industries the working assumption is that a company knows its customers better than outsiders… But this assumption of knowing your customers seems not to hold in the mobile telecoms industry. It appears that the industry assumes that the mobile operators do not know their customers, but that they – the suppliers generally – understand them better.”
Interesting. So this is a case of the suppliers purportedly knowing their customer (the operators) but also their customer’s customer (the end-users of comms services). This concept is almost definitely true of network suppliers. I don’t feel that this is common for OSS suppliers though. In fact it’s an area that could definitely be improved upon – an awareness of our customers’ customers.

“At the Great Telco Debate, Nokia spoke about how the telcos needed to be bold, to build networks [eg 5G] for which there was no current business plan on the basis that revenue streams would materialise. Telling your customer to do something which cannot be justified economically seems a risky way to ensure a good long-term relationship.”

I actually laughed out loud at the truth behind this one. So many related stories to tell. Another day perhaps!

“The operators have been advised for decades that they are in a business that is increasingly becoming a utility and that they need to “move up the value chain” or find some other growth opportunity. This advice seems to be predicated on the view that nobody wants to be a utility, that it is essential for organisations to grow, and that moving around the value chain is easy to do. All merit further investigation. Utility businesses are stable, low-risk and normally profitable. Many companies do not grow but thrive nevertheless. But most problematic, mobile operators have been trying to “move up the value chain” for many years, with conspicuous lack of success.”

The CSP vs DSP business model. There is absolutely a position for both speeds in the telco marketplace. Which is better? Depends on your investment objectives and risk/reward profile.

“Most operators, sensibly, appear to be ignoring all this unsolicited advice and getting on with running their networks reliably while delivering ever-more data capacity for ever-lower tariffs. Of course, they listen to ideas emanating from around the industry, but they know their business, their financial constraints, and their competitive and regulatory environment.”

As indicated in yesterday’s post, every client situation is different. We might look at the technical similarities between projects, but differences go beyond that. A supplier or consultant can’t easily replace local knowledge across financial and regulatory environments especially.