In Business Model, Internet Access, Mobile

Telcos can become “Integrated Digital Service Providers” (IDSPs) that function as platforms, Accenture argues, essentially getting out of the “communications” business.

In yet one more iteration of the “moving up the stack” strategy, Accenture suggests telcos can become “platform companies” that use social, mobile, analytics and Internet of Things tools  to build a business architecture and set of services that enables other businesses to rapidly develop and deploy the products and solutions needed to drive their digital strategies.

That probably sounds like “middleware” to some; “operating system” to others.

Time will tell whether any firms actually will be able to become “digital platforms,” or whether, in the end, the effort will fail.

For more than a decade, we all have heard, seen and read commentaries suggesting that “digital disruption” somehow can be turned to a traditional telco’s advantage. Not all of the advice is wishful thinking, but let us be honest: nothing has really worked all that well.

Accenture consultants argue that  “transformation begins when operators update core technologies to digital and leverage existing assets—strong and trusted brands, unique locality, established billing relationships, robust networks, and a large quantity of unique customer and usage data—to compete more effectively.”

Let us be honest: we have been saying that, in different ways, for more than a decade. One might argue that telcos simply have not had time to make the full transformation.

Others might argue the transformation is growing exceedingly unlikely, based in part on the ability of many other entities–device, app, commerce, transaction providers–to bundle their own “access” as part of their services and features.

In the end, it always will be difficult to compete with “free.”

In other cases, newer providers, with lower capital investment and operating cost profiles, might simply be able to sustain “traditional” consumer access services even at prices vastly lower than offered by traditional providers with higher cost structures.

The point is simply that the traditional access business is shriveling. It began with international and long distance calling, then spread to use of fixed line phone services.

As mobile cannibalized fixed services, so in turn have mobile voice and text messaging been disrupted by over the top alternatives. Linear video entertainment are Internet access services aer next.

The point is that an argument can be made that revenue shares in the Internet ecosystem are shifting away from “access roles” and traditional providers. So far, nobody, no matter how smart, no matter how clever, has yet devise a way to escape that trend.

Some might argue it is not possible to do so.  The implications for business strategy are rather daunting, as a result. Telcos have to become much leaner, harvest legacy revenues well and discover or create new roles and services elsewhere in the ecosystem. They can do so, no doubt. What is doubtful is the size of those new revenue sources, compared to the sources they are losing. 

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