Telecom, Developers and Innovation
Every 2-3 years I sit down and put my thoughts down about the industry I’m part of. I do it primarily to crystalize what I’ve learnt, and what I believe in. In 2006 I wrote about the unmet needs of SMBs in the communications space and that thinking eventually led to Ringio. In 2008 I focused on how the long tail of voice applications could become a Plan B for Telecom. Today I look at what telecom companies could do to improve their future: telecom APIs.
What do you call an organization that knows who I am, where I am, who I talk to, what I buy, what I like and how I spend my time? No, you silly, not the CIA. I’m talking about my telecom provider!
What industry other than telecom has the ability to reach almost 100% of the population with its products, services and marketing, transact with that population wherever they are, and do it reliably and cost effectively?
Yet, despite all these unique advantages, telcos are playing defense when it comes to many of their products, and are seeing global Internet giants emerge as formidable competitors.
The reason why Google, Microsoft, Apple and Facebook have become a threat for telcos around the world, other than their scale, is that almost all value in technological innovation is happening in networked software.
And nobody has understood better how to build this kind of application than Internet developers. Seeing how well their approach to innovation has worked over the last decade, Internet giants have recently decided to expand their business into telecom. After all, it’s a sweet opportunity.
So telecom companies find themselves at a critical juncture, where their customers have gotten a taste of the salient attributes of the products offered by Internet giants (magical user experiences, self-service, simplicity and ubiquity) and feel almost universally negative about what their telco company has to offer.
Will they answer the threat or retrench into their lobbying bastions of protection by regulation and golden shares?
Innovation happening elsewhere
Ironically, it’s not like the world of telecom is devoid of innovation. On the contrary, innovation in telecom is exploding: it’s just, for the most part, not exploding at telecoms, but despite telecoms.
It’s startups and a few service providers who are shaping up the future of telecom. On their side they have a simplicity of purpose and better tools. Against them, a lack of channel muscle and not enough access to the PSTN
These innovators are testing their own concepts in the market. To the untrained eye they may look different. Upon closer inspection, one can see these concepts share common traits:
- Being telecom apps in their own right, they offer the point and click configurability that we’ve come to expect from internet services. As a result, immediacy of service.
- They are dead simple to use. In the worst cases, they are an order of magnitude simpler to use than the alternatives they replace.
- They mix modalities: voice, SMS, chat, conferencing, email, social network updates… it all comes together in a winning formula. The boundaries between communications channels don’t matter to the user, so they don’t matter to the apps.
- They track conversations, not just calls. This is a significant paradigm shift.
- They make the most of the available data out there, whether private, public, or available through the social graph, to enrich and smooth the interaction.
- They’re either broadly applicable and highly innovative or narrowly applicable but very useful.
The skeptic may ask: if innovation is exploding, why isn’t there a true telecom 2.0 industry emerging, why are we not seeing a displacement of the existing players?
The answer lies in the nature of the voice network. This formidable construct of the 20th century has both created immense value and become a natural barrier that acts as a moat to anybody that is trying to disrupt it. Every time one of these applications touches it, it inhibits the growth of the app. A true anticatalyst.
If these innovations were in the hands of a true first-class member of the PSTN they would spread like wildfire.
A time to be brave
In the face of all this pressure, what can telecom companies do?
1 – Rediscover “tele-” and “-communications”
The soul of telecom is
- “tele-” – at a distance: dealing with the reality of physical separation
- “-communication” – the exchange of thoughts and messages: in their 3 manifestations (information exchange, storytelling, presence as articulated by Douglas Galibi and translated for the rest of us by Martin Geddes) For the liberally educated, communication comes from “common”+“union”+“act of”, when we communicate we are reinforcing what we have in common that unites us)
Everywhere and everytime that distance (not just physical, but more conceptually as a gap that separates two parties to interact) is an obstacle for humans to interact, in either exchanging information or weaving their common story, or sensing where each other is in relation to those around us that give meaning to our humanity as social animals, telecom has an important role to play.
Lest I be accused of getting lost in philosophical weeds, let’s observe that a human need of such a high order, and services and products that facilitate the fulfilment of this need will command a high premium in the market.
A sustainable way to measure the relevance of telecom is its continued involvement in the delivery of this mission.
If, as a telecom product manager or strategist you look at your portfolio and you can’t see how it’s delivering on this mission, you can take it as a sign that the apps and services are in need of rethink.
2 – Open the gates to the innovators
So other people today are trying to define the products and services of the future of telecom. Why be afraid? Does this mean that they will own the network? No. Will they own the channel, and the brand? No. These are not to be understimated assets that will invariably remain in the firm control of telecoms for as long as they are relevant to their customers.
How can we be more relevant? Bring products to the masses that deliver on our mission.
How can we bring more of these products? Open the gates to all the innovators out there. Make it possible for internet developers to define category killing telecom apps, then make it easier for them to deploy them to your customer base than to go around you. Put your best people in charge of this process.
What are developers clamoring for?
Telecom APIs to control the network
- Initiate and control phone calls, text messages, videos, chats, twitter & facebook posts. All aspects of it.
- Intercept, redirect, and treat phone calls with voice automation
- Provision, control, modify any of the network objects: DIDs, Customers, CPE, Applications, Devices (anything with a SIM card),
- Manage and extend the identity of customers, as well as understand their privacy preferences
- Locate the customers
- Transact with customers
- Manage the relationship with customers… get their feedback, promote to them, upsell and cross-sell them, reward them, remind them, nurture them.
That would allow them to focus on higher level matters:
- High quality codecs for audio and video (Why did Google buy GIPS and open source their stuff?)
- High quality network stacks for different protocols
- Super-reliable, telco-scale softswitching plaforms
Developers want to know and understand who your customers are, what they buy, what their behaviors are, what messages work with them, and this information is so hard to come by.
Marketing channels that work
It doesn’t matter if it’s an app store, or a a section on your website, or your own custom-made marketing program. What matters is that it be no different from your main marketing efforts that work so powerfully and that took you decades to develop. If you make something special for third party developers it is almost guaranteed to suck.
An open mind about other business models
Charging for minutes and bytes is obscenely great, but will only get you so far. Transactions, subscriptions, two-sided models, site licenses, there’s a rich panoply of alternatives which are working in the software world, why not adopt them?
It’s not just about what the line item is, it’s also about the layer of the value that we charge for. There’s plenty of money to be made selling a utility but sometimes the distance between the utility and a differentiated offering is not that far. (Think bottled water vs tap water)
Access to your salesforce and retail presence
Last but not least, if you find there is demand for an app or service, how can it hurt to use all the assets at your disposal to maximize the demand? All those brick and mortar investments where a customer can have a human explain face to face how it works can dramatically boost the adoption rate, so why not use it?
3 – M&A baby
The last piece of the puzzle for thriving in the next few years of telecom is acquisitions. Every year, hundreds of tech startups are acquired by the software giants. These acquisitions effectively expand the R&D capabilities of companies like Google, Apple, Microsoft and Facebook, and serve them well in recruiting top talent. The acquired companies bring more than IP and bodies, they constantly renew the entrepreneurial spirit within the absorbing organizations. A not-so-unintended side effect is that they take off the market potentially new competitors.
Frankly, I find this to be some of the lowest hanging fruit for transforming a telecom company. A good place for tech startups at a telecom would be their innovation labs. With strong leadership one could successfully merge the hunger of software startup people with the knowhow of top network engineers and marketers from the operating units.