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The interesting life of telcos

  • By Alan Knott-Craig
  • January 30, 2012

30 January 2012


So lets think of the evolution of the mobile operators.


When they started, the fixed line operator tried to smash them through predatory pricing, dirty tricks with transmission and games with the regulator. Eventually the fixed line guys realized the world had changed. Mobile operators are here to stay and they’ll make more money. The top guys started treating one another civilly, and whilst the competition continued there were no more dirty tricks. In fact, the mobile operators are now the single biggest customers for fixed line operators.


And then came along 3G. Suddenly the mobile operators found companies like Facebook running services over their data networks that bypassed their voice and SMS billing systems, thereby cannibalizing their primary revenue streams. So they started playing tricks like blocking websites, throttling traffic, and trying to have these products fall within ambit of the regulator and therefore illegal.


The operators were caught in a quandary. The continual upgrade of their networks resulted in faster data speeds and lower prices, which attracted more customers and revenues, but also enabled the likes of Facebook to offer better services and attract more customers.


Eventually the operators chilled out and accepted they needed the application providers.


Then along came content providers like Zynga, selling games like Farmville on the Facebook platform. Facebook suddenly realized that Zynga was piggy-backing on their platform and bypassing their billing systems. So they blackmailed Zynga into passing a revenue share back.


Same thing is happening with the AppStore. Apple forces content providers to bill via its own billing engine.


And the story goes on. It’s a dog eat dog world. Churchill once said, “If there is one thing we can learn from history, it is that we don’t learn from history.”


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