Telcos "Don't Get it?"

Do telecom executives really not understand what is happening in their business? That often is the argument, and one could point to any number of indicators.

In some cases, there are tactical issues, such as inability to mine end user data in real time, and apply it to change operations. One might argue there sometimes are cultural issues. Perhaps there is no such thing as a very-large organization that actually is capable of moving rapidly and efficiency as a matter of course. So inertia remains an issue.

On the other hand, are there scenarios where "knowledge" does not provide any particularly useful clues to "action and change." The divested AT&T, one might argue, never "solved" the problem of declining long distance revenue and rates, no matter what it tried. In the end, neither AT&T nor MCI found continued existence as an independent and successful provider was possible, or the best course.

"It’s well understood that OTT (over the top) players are challenging the telecoms status quo, but many telcos don’t fully appreciate just what a big deal this is, said Mike McConnell, CTO and executive solution consultant for Huawei Technologies.

It might be true that for many app providers, the actual "product" is the user base, and what can be done, once there is a user base, to create revenue. For telcos, the services are the product.

The practical implications are that the "freemium" model--giving away something of significant value free--makes sense, as part of the process of building a user base. That would not come naturally for a communications service provider. Perhaps it cannot or should not be a preferred course of action, some would argue.

But that illustrates the problem. It might frequently be the case that executives in fact know full well what they face, but have no convenient solutions, any more than AT&T or MCI, as experienced as the managements of those companies were, could find winning solutions.