The Teleonomy of Telecoms: Survival of the Fittest
Author: Andrew Tan CIO
Date: 22nd February 2017
Categories: Technology, Data, Telecoms, Billing & Charging, Neural Technologies, Big Data
In the mid-19th century, Charles Darwin formulated the scientific theory of evolution by natural selection, published in his book On the Origin of Species (1859). This process is demonstrated by the observation that more offspring are produced than can possibly survive, along with three facts about populations: 1) physical traits vary among individuals, 2) different traits confer different rates of survival (differential fitness), and 3) traits can be passed from generation to generation (heritability of fitness). Thus in successive generations, members of a population are replaced by offspring that are better adapted to survive and reproduce in the natural selection environment.
Fast-forward 200 years and Darwinism applies not only to the natural world, but to the man-made world we reside in as well. We see this evolution in the speed in which advances are made in design and technology; the ‘latest’ model is obsolete within a year; the ‘new’ becomes second-hand in a matter of months; and photos, apps and videos become viral in a matter of minutes.
So where does this faster-than-light evolution leave the ‘traditional’ telecoms industry? In the world of the Internet of Everything (IoE) and Machine to Machine (M2M) communications, how are Communications Service Providers (CSPs) faring and how will they survive?
In the ‘golden era’ of telecoms, CSPs had immense margins and held all the cards in the communications game. Calls were king and then text messages came along as the next ‘big thing’ and were charged PER TEXT, and all were network reliant. With the dawn of mobile internet, however, all of this has changed. Operators are now purely network providers, with customers placing value in phone brands, apps and OTT services above network provision. Price and quality for bandwidth are key, but there is very little customer loyalty provided they can access the network quickly and efficiently. Operators must therefore provide excellent bandwidth with high quality customer service at a low fee or face losing disappointed customers almost instantly.
Could it be that CSPs are heading the way of utilities? Providing a virtual service via contract, from which customers can switch yearly to enjoy new member perks before changing tariffs in 12 months’ time to a new service provider?
IPads have been running on 3G since 2010, allowing users to pick a 24-hour plan from a range of suppliers with no added commitment. The user ID module is now with the technology, not the service provider, meaning that customers can buy into a service as if they were buying a scoop of ice cream – pick whichever they like for a few hours and then choose another the next time they need to.
So what can CSPs do to ensure that they can stay relevant and survive? Evolution through diversification is the answer. Companies like Softbank, which stated as a distributor and has since diversified into mobile, banking, television and gaming – recently purchasing Cambridge-based technology firm ARM for £24bn. They realised that bandwidth is a commodity, but have also purchased services to push across that bandwidth, expanding into other verticals that add value to customers and using their network to provide them.
In true Darwinian style, perhaps it is time for those best adapted and most flexible to adaption to survive. Those most willing to evolve. Until the next disruptive technology hits the market, the answer appears to be diversify or die. As the man himself said: “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.”
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