Not every global internet service provider or telco is going to be able to move “up the stack” and become an application provider, platform or content company. Where that is possible, telcos must do so, if possible. The reason is that the connectivity business will not be sufficient to keep them in business. Consider the latest positioning from AT&T.
This slide from the AT&T quarterly earnings call tells you quite a lot about how AT&T sees itself, and how differently it sees itself from its past. AT&T is said to be “a modern media company.” The building blocks of that business include content, advertising, distribution networks and high-speed networks.
Sure, AT&T has business (enterprise) operations and assets in Latin America and Mexico. Its single biggest revenue generator still is consumer mobility. But all those assets are infrastructure to support content, advertising and distribution, AT&T now emphasizes.
Other major telcos might try different ways to transform themselves from “connectivity providers” to something else, even when the network and connectivity services remain fundamental inputs for the new strategies. Smaller providers unable to do so will find themselves forced to reduce costs yet further, and many will find they are forced to sell themselves. It’s a new world.
