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A MATURE global telecommunications market presents some worrying potential scenarios for telecommunications operators.
Networks are increasingly looking like plumbing and a disintermediation of services has already begun. If operators want to escape a future in which they merely carry bits around for tiny margins, they need to rethink strategy and redefine their brands. Our usual candidates are already in transformation mode.
One of the strategies tried by operators fighting the seemingly inevitable slide to bit-pipes has been in content. Operators have ploughed money into building their own content networks and portals in an attempt to offer more than just connectivity. This has shown marginal success, but is a limited strategy in the reality of an open internet as far as I'm concerned.
The truth is that networks simply can't compete with niche content creators. And the same is true of consumer services. If you're going to build your own internet telephony service, it needs to be better or more cost effective than Skype.
Setting up a news network is simple enough, but if it isn't better than the leading online news services, why would your subscribers use it? Locking them into your network isn't the right approach, and making it more affordable to access on-network content has been only marginally successful.
The more intelligent network operators have cuddled up to content creators without muddying brands. They've brought content on-net without compromising publishers, at least not evidently so. And this is perhaps the best thing they could do in terms of content.
The internet must be open and neutral and will always tend towards that state. People will find open access no matter how hard networks work to combat net neutrality. This is and always has been true; a conversation on how it has been repeatedly proven in the past shouldn't be necessary, and we haven't the space for it here.
Instead, let's look at a larger opportunity - far greater than in content, potentially - which lies in the ability of operators to provide business services.
Not only does this make sense from an operational perspective, but it also works wonders for margins, as MTN Business is proving as a subsidiary of Africa's leading telecoms group. There is a content play to this too, but let's focus on the business engagement.
One can look beyond initial service offerings to the networks becoming formidable enterprise technology providers in their own right.
Vodafone is already far down this path with its Global Enterprise subsidiary that offers mobile management, procurement and global rates fixing services, among others, to top companies across the globe.
It makes sense for these multinationals to engage with Vodafone on that level and it is obvious that the bouquet of services on offer from the British telecoms giant will continue to grow.
The proposition is straightforward: you're getting your phones from us, and all the services that make them work in your organisation. Those same phones are become central to your business computing.
Why shouldn't we also provide your data centre services, enterprise applications - and host your web and email systems too? You get to deal with one company placed to meet your business application needs and leverage its own network to do so.
MTN Business and Vodacom Business are approaching that relationship with their customers, and at the more lucrative mid-market level.
They are moving beyond just internet and cellular service providers to hosting and applications partners. And this builds long-term relationships that have become rare in an industry where churn is rampant.
Watch MTN especially, as it launches MTN Business in Africa, for example in Nigeria where the inroads are starting to show.
By taking this division to countries where other providers fear to tread, MTN is set to benefit from its frontiersmanship in a similar way it did from being the first cellular operator to seriously move into Africa.
We may think we've seen the extent of the boom for a group like MTN, but it seems clear, at least to me, that a new wave of growth is set to bolster operators making the transition to business services.
I wouldn't expect this to produce the magnitude of explosive growth seen in decades past, but I wouldn't overlook it either. And it is yet another reason why MTN is a clear buy at the moment.
- Fin24.com
Networks are increasingly looking like plumbing and a disintermediation of services has already begun. If operators want to escape a future in which they merely carry bits around for tiny margins, they need to rethink strategy and redefine their brands. Our usual candidates are already in transformation mode.
One of the strategies tried by operators fighting the seemingly inevitable slide to bit-pipes has been in content. Operators have ploughed money into building their own content networks and portals in an attempt to offer more than just connectivity. This has shown marginal success, but is a limited strategy in the reality of an open internet as far as I'm concerned.
The truth is that networks simply can't compete with niche content creators. And the same is true of consumer services. If you're going to build your own internet telephony service, it needs to be better or more cost effective than Skype.
Setting up a news network is simple enough, but if it isn't better than the leading online news services, why would your subscribers use it? Locking them into your network isn't the right approach, and making it more affordable to access on-network content has been only marginally successful.
The more intelligent network operators have cuddled up to content creators without muddying brands. They've brought content on-net without compromising publishers, at least not evidently so. And this is perhaps the best thing they could do in terms of content.
The internet must be open and neutral and will always tend towards that state. People will find open access no matter how hard networks work to combat net neutrality. This is and always has been true; a conversation on how it has been repeatedly proven in the past shouldn't be necessary, and we haven't the space for it here.
Instead, let's look at a larger opportunity - far greater than in content, potentially - which lies in the ability of operators to provide business services.
Not only does this make sense from an operational perspective, but it also works wonders for margins, as MTN Business is proving as a subsidiary of Africa's leading telecoms group. There is a content play to this too, but let's focus on the business engagement.
One can look beyond initial service offerings to the networks becoming formidable enterprise technology providers in their own right.
Vodafone is already far down this path with its Global Enterprise subsidiary that offers mobile management, procurement and global rates fixing services, among others, to top companies across the globe.
It makes sense for these multinationals to engage with Vodafone on that level and it is obvious that the bouquet of services on offer from the British telecoms giant will continue to grow.
The proposition is straightforward: you're getting your phones from us, and all the services that make them work in your organisation. Those same phones are become central to your business computing.
Why shouldn't we also provide your data centre services, enterprise applications - and host your web and email systems too? You get to deal with one company placed to meet your business application needs and leverage its own network to do so.
MTN Business and Vodacom Business are approaching that relationship with their customers, and at the more lucrative mid-market level.
They are moving beyond just internet and cellular service providers to hosting and applications partners. And this builds long-term relationships that have become rare in an industry where churn is rampant.
Watch MTN especially, as it launches MTN Business in Africa, for example in Nigeria where the inroads are starting to show.
By taking this division to countries where other providers fear to tread, MTN is set to benefit from its frontiersmanship in a similar way it did from being the first cellular operator to seriously move into Africa.
We may think we've seen the extent of the boom for a group like MTN, but it seems clear, at least to me, that a new wave of growth is set to bolster operators making the transition to business services.
I wouldn't expect this to produce the magnitude of explosive growth seen in decades past, but I wouldn't overlook it either. And it is yet another reason why MTN is a clear buy at the moment.
- Fin24.com
