T-Mobile Test Drive Makes the "Intangible" Tangible

The T-Mobile US Free 30-DayTest Drive offer, which allows potential customers to experience its 4G network, is one concrete solution for allowing people to evaluate a product they cannot see, touch, hear, smell, taste or otherwise directly evaluate. 

As with all other intangible products, consumers only find out how the product works after they’ve already purchased. 

That is one reason selling services generally is more difficult than selling products. By definition, services--including communications--are intangible. Like marketing advice, crisis management and other services, communications can be very hard for buyers to evaluate, in advance of purchase.

There is no physical object to inspect, so a potential buyer has to try and determine value some other way. Buyers must rely on evaluations, third party testimony, advertising or other proxies for value.

There being no way the buyer actually can determine “quality” in any direct way, until the services are provided.

Obviously, that creates a barrier to sales. 

So think about it: all  communications and connectivity services are intangible products, for which a buyer has no way to determine quality in advance of purchase, and no way to compare quality to other potential buyers except to “try them.”

There are some obvious consequences. If a buyer cannot independently determine value or quality, buyers might be prone to distrusting quality claims. Perhaps that is why service providers tend to score low on consumer satisfaction surveys. People might know they have no way of making judgments as they can with physical products. And when “value” cannot be determined, it is hard to determine whether “price” is right, either.

In fact, every connectivity service--video, voice or internet access--scores at the bottom of multi-industry indexes in surveys of customer satisfaction conducted by the American Customer Satisfaction Index.

source: ACSI

Make it personal is one typical bit of advice for sellers of intangible services. In other words, explain “how it makes your life better.” “Show the benefits” (outcomes) is another way to sell an intangible product. When even that is tough, sell “peace of mind.”

That's why credentials, furniture, street address, references and "experience" become proxies for value and competence where an intangible product is concerned. Even tangible products such as fashion items or vacation resorts have a huge and similar problem, namely creating a brand or mystique that helps potential buyers evaluate the product, which either is a means to another end, or an "experience."

Trust also is important for selling intangibles.  As there is nothing tangible to show customers, customers have to trust their suppliers. And though it would be hard to show a direct correlation, one element that promotes trust might be that lots of other customers have chosen a particular supplier. So market share becomes a proxy for value and a reason for greater trust.

In his book Selling the Invisible: A Field Guide to Modern Marketing, Harry Beckwith makes the point that an intangible product cannot be sold in the same way as a physical product.

“In fact, a service does not even exist when you buy one,” notes financial analyst Ben Carlson. “If you go so a salon, you cannot see, touch, or try out a haircut before you buy it. You order it. Then you get it.”

Product failure also is harder to determine. Did you get good advice? How a good a job did your painter, dentist or doctor do?

That is unknowable. That is why products can have warranties. There is some way of knowing and quantifying the risk of product failure.

Most services cannot be similarly quantified, with the possible exception of outage or availability performance.

The big point is that customers buy connectivity services that mostly come without guarantees or certainty. So anything suppliers can do to provide proxies for quality should help.

And that is why “brand” reputation matters. Irt is a proxy for quality and a reason for trust. That is why personal relationships matter: they are proxies for quality and reasons for trust.

That is why good storytelling matters.

Companies and people sell themselves, their vision, philosophy and values. Being likable is a prerequisite when the customer has endless choices.

“Prospects do not buy how good you are at what you do. They buy how good you are at who you are,” says Beckwith.

That is why sellers of broadly similar products benefit from “accentuating the trivial.” That might be one of the few ways to differentiate, when products perform in broadly similar ways.

Most Users Waste Money on Internet Access Above 100 Mbps, Study Suggests

In tests of internet access services used by 53 of its journalists, the Wall Street Journal has concluded that most people do not use but a fraction of the capacity they pay for as buyers of fixed network internet access. 

Is faster better, for most people? “For most people, the answer is no,” say a team of writers including Shalini Ramachandran, Thomas Gryta, Kara Dapena and Patrick Thomas, writers for the Wall Street Journal. 

The big caveat is that this study looked at applications such as video streaming, gaming and other common apps, and were not specially focused on downloading. 

As this chart suggests, experience is improved most at the lower end of the speed scale, say 55 Mbps or so. “For a typical household, the benefits of paying for more than 100 megabits a second are marginal at best, according to the researchers” say. 

source: Wall Street Journal

These sorts of results would not be unexpected or unusual by anybody who actually studies such matters.

The Difference Between Management and Leadership

With the caveat that skills required by managers in supply chain roles--especially in retail, logistics or manufacturing--might not be weighted the same as required by managers in other verticals, leadership and thinking are more important than operational expertise or technical knowledge, as arguably is true of all upper-level and middle management roles. 

source: World Economic Forum

At middle levels, what we might call “management” skills are important, beyond the specific technical skills any associate has relied upon in former roles. 

Think of the common process in the telecom industry, software or hardware industries where talented engineers or coders discover as they move up the ranks that they no longer are writing code or doing engineering but instead mostly are managing people and information flows. 

The ascension to the “C” suite is even more startling, as there is a difference between leadership and management that typically goes unrecognized. In fact, leadership and management involve different skills: they are not different words for the same skill. 

The analogy I have long used is that “leadership” is conferred by those who follow; “management” is conferred by a role within an organization. People follow leaders because of some non-bureaucratic and personal source of authority. 

In combat, formal authority (management) does not matter as much as leadership. Soldiers under fire must follow their officers, because those officers have formal authority. But soldiers in great danger willingly follow those they trust, no matter what their rank.

That is what I mean by saying "leadership is conferred by followers," not by formal legal authority. Second lieutenants have formal authority, and can manage, in essence. But it often is the case that leadership is exercised by others in a platoon, no matter their rank.

People obey management because they work for organizations that say employees follow the directions given by managers.

Oversimplifying, management has power conferred by the organization. It is a function of role. 

Leadership is assent conferred by followers, not dictated strictly by organization titles, reporting lines and structure. In describing the difference between management and leadership, management often is viewed as “authoritarian,” where leadership is said to be motivating. 

That mostly is a gross exaggeration, and unfair. Managers are not necessarily "authoritarian," but they command because they have lawful organizational authority.

Leaders might, or might not, have proper and lawful authority. What they do command is the willing followership of others, given on a voluntary basis.

MANAGEMENT	LEADERSHIP
Managers Give Directions	Leaders ask questions
Managers have subordinates	Leaders have followers
Managers use an authoritarian style	Leaders have a motivational style
Managers tell what to do	Leaders show what to do
Managers have good ideas	Leaders implement good ideas
Managers react to change	Leaders create change
Managers try to be heroes	Leaders make heroes of everyone around them

source: Next Generation

People often mistake leadership and management as the same thing but in essence, they are very different. The main difference between the two is that leaders have people that follow them, while managers have people who simply work for them

Another useful, but oversimplified summary might be that “management” is mostly the required skill people need in middle management. At the “C” level, in line roles, leadership skills are more important. 

Look at the sorts of questions would-be CEOs are urged to answer:

• Why do you want to be a CEO
• What is your value proposition for the organization
• Do your skills and experiences match the organization’s strategic objectives
• How do your values align with the organization’s values
• What have I learned from failures and successes that help the organization\
• Where are the company’s strategic opportunities

None of those sorts of questions would really make sense for a competent middle manager. 

Make no mistake, mastering management is not the same as mastering leadership. And leadership has to be learned, just as management has to be learned.

Job Skill Requriements are Shifting Fast, WEF Report Says

In about three years, according to a survey of larger employers conducted by the World Economic Forum, 54 percent of all employees will require significant re-skilling and upskilling related to new technologies and trends disrupting business models. “By 2022, the skills required to perform most jobs will have shifted significantly,” the WEF reports.  

If that forecast proves to be accurate, we can be fairly certain most firms will have failed to achieve all they intended. 

Global average skills stability—the proportion of core skills required to perform a job that will remain the same—is expected to be about 58 percent, meaning an average shift of 42 percent in required workforce skills over the 2018 to 2022 period, just to do the same jobs presently conducted, according to WEF enterprise respondents. 

“Human’” skills such as creativity, originality and initiative, critical thinking, persuasion and negotiation will likewise retain or increase their value, as will attention to detail, resilience, flexibility and complex problem-solving, WEF says. 

Emotional intelligence, leadership and social influence as well as service orientation also see an outsized increase in demand relative to their current prominence.

Of the more than half (54 percent) of employees who will require “significant” additional skills, about 35 percent are expected to require additional training of up to six months, nine percent will require reskilling lasting six to 12 months, while 10 percent will require additional skills training of more than a year. 

Skills continuing to grow in prominence by 2022 include analytical thinking and innovation as well as active learning and learning strategies. 

Employers also expect sharply increasing importance of skills such as technology design and programming. 

Job titles expected to be in demand in 2022 include:

• Data Analysts and Scientists
• Software and Applications Developers
• Ecommerce and Social Media Specialists
• Customer Service Workers
• Sales and Marketing Professionals
• Training and Development professionals
• People and Culture specialists
• Organizational Development Specialists 
• Innovation Managers
• AI and Machine Learning Specialists
• Big Data Specialists
• Process Automation Experts
• Information Security Analysts
• User Experience and Human-Machine Interaction Designers
• Robotics Engineers
• Blockchain Specialists

source: World Economic Forum

Are Mobile Phones Safe?

Are mobile phones “safe?” Yes, but It is a question that seems to recur. The issue is non-ionizing radiation, electromagnetic energy in the radio regions used by AM and FM radio, TV broadcasts, generated around power lines, Wi-Fi, cable TV, which uses radio waves in the copper portions of plant, and cell phones. 

Also, keep in mind that power levels for cell phones and even cell towers are low. Even a relatively strong cell tower signal is quite weak in comparison to other radio frequency transmitters, and mobile phones transmit at powers far below even cell towers. 

Consider that a cell tower radio emits energy 100 to 5,000 times lower than a TV transmitter, for example. Some liken the power level from a cell site radio to that of a light bulb. It’s actually quite low. 

Radio signals weaken (attenuate) logarithmically, by powers of 10, so the power levels decay quite rapidly.

Basically, doubling the distance of a receiver from a transmitter means that the strength of the signal at that new location is 50 percent of its previous value. Just three meters from the antenna, a cell tower radio’s power density has dropped by an order of magnitude (10 times).

At 10 meters--perhaps to the base of the tower, power density is down two orders of magnitude. At 500 meters, a distance a human is using the signals, power density has dropped six orders of magnitude.

The weight of evidence suggests that if radio-frequency emissions have any effect on humans at all, it is, according to the World Health Organization, about on par with other possibly carcinogenic items including coffee, mate tea,  glass containers, some pickled vegetables. 

To date, no adverse health effects have been established as being caused by mobile phone use, WHO says.  

Also, so far, “research does not suggest any consistent evidence of adverse health effects from exposure to radiofrequency fields at levels below those that cause tissue heating.” 

The amount of human tissue warming from mobile phone use is quite negligible, if detectable at all.

So far, “research has not been able to provide support for a causal relationship between exposure to electromagnetic fields and self-reported symptoms, or ‘electromagnetic hypersensitivity’,” WHO notes.

“Results of animal studies consistently show no increased cancer risk for long-term exposure to radiofrequency fields,” WHO says. 

Some activities also might be carcinogenic, WHO says, including carpentry, dry cleaning, hair dressing and frying.  

source: World Health Organization

Still, if you really are concerned about the possible health effects of using mobile phones, use them less. Text instead of holding the phone against your head and talking.

California Legislature to Consider Bill Preventing CPUC Oversight of VoIP

source: FCC

The FCC position has evolved since the early days of VoIP, essentially using the position that “if it walks like a duck, and quacks like a duck, it is a duck.” In other words, even when using a digital platform instead of analog, if the purpose and function of the service is what we commonly refer to as “telephone service,” that is what VoIP is. 

As there are--for every public purpose--corresponding private interests, it comes as no particular surprise that some interests want less or more regulation of VoIP; that there is disagreement about whether to allow digital versions of analog products to be regulated the same way as the legacy products. 

The Electronic Frontier Foundation says the bill would lead to the CPUC abandoning oversight over local voice services. 

How to regulate voice over internet protocol long has been contentious. There have been disputes over the proper balance of local and national jurisdiction, which agencies should have purview, as well as disputes over which rules to apply, to what sorts of services and entities. 

Apparently some opponents argue against the bill on grounds that it somehow undermines internet access competition, which is not my reading of the bill’s intent and impact, which appears narrowly drawn to apply to interconnected VoIP services only--which traditionally have been regulated differently from data apps and services--and not internet access, which by federal law already is viewed as an internet or data service.

Ironically, Multi-Purpose Networks Now Hinge on Single-Purpose Revenue Models

Even if the great advantage of a network running internet protocol is that it is inherently an “any application” network, end user demand changes and the separation of app from access both mean that many fixed networks are on the verge of becoming single-purpose businesses in terms of revenue drivers. 

It is an unintended consequence of the move to IP, with serious implications for capex and opex strategies and business models.  

Fully 78 percent of U.S. consumers surveyed by IHS Markit think they will stream video on their 5G devices, for example, making video the killer app for 5G, according to IHS Markit. 

When asked to name activities they are likely to increase on 5G devices, consumers ranked video streaming first, ahead of video calling, social media, mobile gaming, virtual reality and augmented reality, IHS Markit says. 

You might notice something about that list of activities people believe they will engage in more, on 5G devices. Voice and text messaging are not listed. 

source: STL Partners

Keep in mind also that the global standards for 5G actually do not include voice support. Voice is simply assumed to be an IP-based app that runs on the network.

All of that tells you something about changes in the products people pay for when using mobile or fixed communications these days, and the way connectivity providers must structure their businesses.

Recall that a few decades ago, the big advantage of an internet protocol network was that it is, by design, media type agnostic. The old phrase “bits are bits” captures the flexibility of an all-IP network, able to carry any media type: voice, text messaging, video, voice, images or music. 

For those of you with long memories, recall that until the modern era, all networks were media-specific, single-purpose networks. Broadcast TV, broadcast radio, cable TV networks, telephone networks, telegraph networks, paging networks, cellular mobile networks, most satellite networks and microwave networks were created and optimized to handle one media type. 

IP changes all that. Add competition, product substitution, Moore’s Law, open source, virtualization and the economics of the networks business--revenue streams and business models--changes drastically.

The advantage of an all-IP network is that it can deliver, and in principle therefore make money from, providing a range of high-demand services (voice, internet access, television). 

On the other hand, legacy revenue streams are diminishing, reducing the value and magnitude of legacy services of many types, even while unit growth continues in some markets. 

source: PwC

The important implication is that many fixed networks increasingly are driven by a key revenue source, internet access or enterprise data access, the former for consumers, the latter for enterprise services. In other cases a key source of value for the fixed network is small cell backhaul. 

Many smaller internet service providers now build their revenue models almost exclusively on internet access. Cable TV operators now point out that internet access drives their revenue growth for consumers and businesses. 

Telcos--both mobile and fixed--are losing voice and messaging revenues that once drove the business. Video is a source of growth for some telcos, even as cable operators lose market share. 

source: Informa

Geostationary satellite constellations have relied on entertainment video delivery as the revenue mainstay. The proposed new low earth orbit constellations will aim to provide internet access. 

But you see the trend: many networks, though capable of supporting multiple services, are tending to find that growth comes from a single key service. Ironically, networks that can, in principle, deliver any media type are finding that revenue generation actually is coming from just one media type.

will 5G Video be a Threat to Fixed Network Linear TV?

It remains unclear how big a threat to fixed internet access 5G will prove to be, in both fixed and mobile modes. But it might also be argued that mobile video over 5G might indirectly also affect the fortunes of linear video services. The indirect impact might occur as some form of future mobile-optimized video service is possible. 

There are a number of dimensions--some more likely than others--upon which new mobile-specific services could be differentiated. If video is intended for viewing solely on a mobile or other relatively-small screen, some image quality (and degree of image compression) might be possible. 

Though it has not been tried yet, in principle it might be possible to create mobile-only services, formatted for small screens, that focus on micro content (single TV series, perhaps), single channels or single episodes that do not cannibalize skinny bundles or full linear services too much. 

That a la carte access is tricky and dangerous for many content owners. In many cases, there simply is not much demand for whole channels, so both advertising and subscription upside is sharply limited. 

Also, the billing and fulfillment cost for many niche and a la carte buys arguably is simply too onerous for niche services. 

The biggest threat to big linear bundle or many skinny bundles is simply the number of customers who are quite sure there are only a few channels, or perhaps several, that supply 99 percent of the total value of any bundle (full or skinny). 

If those few or several channels are available at low-enough prices, it might well make sense to abandon subscription bundles altogether. 

Personally, I now find, with multiple over-the-top subscription services, that my linear “must-have” channels have dwindled to a maximum of three. In other words, nearly the full value of the linear subscription (99 percent) comes from ability to watch just three channels, and of those three, one of the channels is only required a handful of times a year. 

So maybe 90 percent of total value of a linear video subscription is really from just two channels on an “every day” basis. Even if price can range up to $100 a month, value is something far less. 

For that reason, I’d argue that skinny bundles are not yet skinny enough to prevent most danger of linear video subscription cannibalization. The rule of thumb used to bve that no single viewer watched more than a dozen channels. 

In an era where many consumers routinely buy multiple video subscriptions, that number likely has dropped sharply. 

Use of 5G as a substitute for fixed network internet access is one type of revenue threat to fixed network service providers. What now remains to be seen is what indirect effect 5G-enabled video might have on linear or OTT services. 

Enterprise Software is Driving Growth in Computing Markets

For a couple of decades, the "most important" developments in computing hardware or software were happening in the consumer space. Two decades ago, the most important innovations in enterprise computing were leaking into the enteprise from the consumer market. 

That seems to be shifting a bit, as internet of things use cases emerge in enterprise settings and cloud computing deepens. That is part of a potentially-important shift for connectivity services providers. Where revenue growth has been driven by consumer apps and use cases for decades, growth now will shift towards enterprise use cases.