Being an ex-monopolist telco

Om Malik has written an interesting post about BT’s way forward and a lot of comments have been posted about the inability of telcos to deliver other products and services. Om writes:

“BT was one telco that completely understood that it was facing uncertain times, and had no choice but to reinvent itself to survive.”

Any of the big incumbent telcos have known this since 1990 give or take a few years.

The basic truth is – being a telco and staying with voice or data services alone is no longer a viable business model.

Fact is, they have known for many years they need to change I just don’t think the know how to. Had they offered this broadband, VoIP, IP-VPNs, etc during these years – their balance sheets would have imploded, because of the massive capital investment in hardware voice-switches (SS-7, etc.). Very little of the progress in those years was innovated by them, since up until then they had no need to, they did not know how to – little has changed.

So while I also have my doubts that these telcos will be able to provide any additional services, this is their only road to survival. So like it or not, they are going down this road because it complements what they do already.

Problem for them is, they got cannibalized once, who says it will not happen again. On the other hand maybe they learn this way what customer service, reliable infrastructure and running a business really means.

But here is the thing, what the ISPs – with IP networks – did to Telcos, bloggers are doing to the traditional media, that is why they are sharpening their knifes pencils and the SaaS community is doing to the big software boys – we are cannibalizing a market and demand created by the likes of Microsoft, Oracle, SAP, in my case Sage and others, in many cases because they provide a poor service and product for inflated prices. Artificially accelerated product cycles, often driven by faulty or unfinished software products, for which the customer had to pay, have done a lot of damage.

They all talk about on-demand this, on-demand that, but in reality they are slow, by the time they made a decision, the world has changed. But these guys have a lot of money to spend to hide these facts, with fancy events and marketing, they are trying hard to win back the initiative, but IMO the writing is on the wall. SaaS vendors need to make sure they do not play by their rules as you can not win on their terms.

We are small in comparison, but we are fast, inventive and clearly set the pace in this industry now. Customer churn may not be an issue for them yet – people have invested interests, money and don’t want change – but once the churn starts and I think it has, these guys are in big trouble – shareholders can be unforgiving masters.

If we keep our companies lean and concentrate on service, technology, innovation, these guys have nowhere to hide, it is just a matter of time.

So relax, I think it is going to be an interesting ride, …. again.

Tags: ACCA, Accountants, Blogging, British Telecom, BT, Client Relations, CPAs, Customer Service, Entrepreneur, Home Business, Homesourcing, ICAEW, IRIS Accounting Software, Micro Business, Microsoft, Office/IT, On-demand, OnlineOffice, Oracle, Sage, SaaS, SAP, SBI, Selfemployed, Small Business Infrastructure, smb, sme, Software as a Service, SOHO, Virtual Assitants, VirtualOffice, Web Technology, WebOffice, WinWeb, WinWeb AccountsOffice , WinWeb OnlineOffice

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