Historic Change in Telco Business Thinking

It is not hard to understand that telecom’s historical geographic legacy--specified areas of operation--has implications for operator efforts to grow application businesses at scale. In other words, service providers of all types are accustomed to creating services and apps that run on their own networks, in their licensed territories.

In a new ecosystem where applications run “over the top,” without regard to geography, and where revenue models often require scale, that older mentality often is unhelpful.

One salient and helpful development, in that regard, are the new OTT video streaming apps designed expressly to run on any network, at scale. We sometimes miss the importance.

Where in the past apps were designed to run on “my network,” now apps are being created to run on “anybody’s network.” In other words, the new apps are borderless (to the extent allowed by copyright rules).

That is a fundamental prerequisite for apps in the internet era, especially those with scale requirements.

This is something quite new. In the past, “geography” has been a key mental, legal and operating foundation guiding strategy, as has the notion that apps “run on our network.” In the next evolution of the industry, network footprint will be part of the business, but not its future.

As operators are shifting from “video that runs on our network and is sold to our customers” to “video that any consumer can buy from us.”

In other words, the future of apps and revenue are separated from the network, perhaps less so for mobile than fixed networks, but separated nevertheless.

So strategy will change in fundamental ways. For the first time, at scale, at least some service providers will try to create business models based on apps that run at scale on anybody’s network, the same strategy as used by Google, Facebook and other app providers.
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