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09/20/2010

Are Telecom Carriers Scared Enough Yet?

Telecom carriers from around the world came to Silicon Valley recently to talk to innovators. The occasion was TC3 2010, the third annual Telecom Council Carrier Connection get-together, put on by the Telecom Council of Silicon Valley. The purpose of the event was to let carriers tell innovators in the valley the kind of innovation they're looking for, and make contact with entrepreneurs they can work with. The big question is how serious the carriers are about pursuing the opportunities that innovators present. And the key to answering the question is understanding how desperate the carriers are.

Carriers presenting at the event ranged from dominant telcos to competitive mobile carriers. They included AT&T, Bouygues Telecom, BT, NTT DoCoMo, SingTel, SK Telecom, Sprint and Swisscom. Even the major wireline carriers focused heavily on wireless businesses. And all made the case that they were looking to embrace innovators and innovation. Most had clearly thought through in some detail what they were looking for. Some had lists of specific areas they were looking to partner in. A handful even had lists of things they specifically did not want to hear about.

The carriers also described a variety of concrete steps they are taking to further their involvement with innovators. AT&T, for example, is setting up innovation centers in Palo Alto, Calif.; Plano, Texas; and in Ra’anana, Israel. BT says it talks to 500 potential partners, further investigates about 50 of those, and launches three to five new services out of the bunch every year. Sprint is doing things like setting up a 3G/4G developers' sandbox, expanding its API portfolio, and supporting and managing a developer ecosystem, all with a particular emphasis on M2M applications. Swisscom says it can offer the entire country of Switzerland, where it is pushing IP to the edges of the network with FTTH and LTE, as a test market for potential partners. And SK Telecom of Korea holds out the lure of partnering in a market that has two world-class handset manufacturers as a way to compete with the iPhone.

Slides, lists and invitations are all nice, of course. But being eager to talk to and meet with innovators isn't enough. Staffing up with smart people who "get it" isn't either. Even setting up new facilities doesn't necessarily do the trick. After all, large companies can set up entire organizations that have little or no real influence, simply to appear to be doing something in a high-profile area.

The carriers that presented at the conference are clearly doing, not just talking. But what really counts is how urgently or even desperately they're doing it. To make innovation work, large carriers in particular have to feel as if their survival is at stake. And the bigger they are, the more threatened they need to feel. Otherwise they will find it too easy to coast along on their considerable strengths, such as financial clout, marketing dominance and "ownership" of the customer relationship, until it's too late.

When gauging such feelings, of course, the only possible judgment is subjective. And based on the presentations and general atmosphere at TC3 2010, here's a totally subjective, entirely visceral and utterly non-scientific verdict: The traditional telecom industry as a whole is about one-half to two-thirds as worried as it needs to be.

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Resources

  •     A selection of free documents for download to help make purchasing decisions when shopping for a business phone system.
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Reports

  • Choosing the (Near-) Perfect Cloud Video Conferencing Solution
         This 7-page buyer's guide gives SMBs the information they need to choose the cloud-based video conferencing service that fits their needs. As a for-purchase download priced at $9.99, this document avoids the conflicts of interest of papers and guides that are offered for free, or sponsored by, vendors and service providers. Instead, it provides the kind of objective and authoritative information that would otherwise require assigning a staffer to spend days or weeks searching out and evaluating.

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  • Voice Over LTE: More Pitfalls Than Promise for Now
        This 18-page Heavy Reading Insider report, written by Robert Poe, analyzes the prospects for delivery of voice calls over cellular networks using LTE (long-term evolution) 4G wireless technology. Operators are originally looking to use LTE mainly for mobile data services, since a number of technical issues make delivering voice traffic over LTE complicated. The report describes the various options available to operators, and explains why they are likely to move to voice over LTE later rather than sooner. Information about the report is available at Heavy Reading 4G/LTE Insider.

  • Making HD Voice Happen: Choosing Codecs, Connecting Islands
        This Heavy Reading Insider report by Robert Poe evaluates the impact HD voice will have on voice services providers ranging from traditional telcos to cable MSOs to cellular carriers to VoIP operators. The 20-page report also analyzes the role vendors' and providers' choices of codecs will play in ensuring that HD voice services can be delivered end-to-end, rather than only within individual providers' or enterprises' networks. It also surveys the HD voice efforts of 14 vendors.
        Information about the report is available at Heavy Reading Insider. A column about the report is available at Light Reading.

  • Disruptive VoIP Services: What Carriers Need to Know
        A report by Robert Poe for Heavy Reading, analyzing the innovative VoIP services with the most potential to disrupt the telecom services market over the next three to five years.
        The 57-page report describes the changes VoIP innovation brings to telephony models, practices and concepts. It identifies 17 categories of potentially disruptive VoIP services, and analyzes their potential impact on the market. It also profiles 50 potentially disruptive companies and services.
        Information about the report is available on the Heavy Reading Website. Coverage of the report is available on the Light Reading Website.


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