Saturday, 6 November 2010

Reports of Net Neutrality's death have been greatly exaggerated (for the time being)

The recent work list for the FCC fails to put any priority on Net Neutrality. Problem solved or vested interest kills progress? So lets look at the facts:

1. The operators need to invest lots of money in order to build the infrastructure to carry net traffic. True.
2. Without content providers there would be no internet. Almost certainly true. Cable operators aside (and even here the content came first), large carriers/operators have a dismal history of producing applications and content people want. Without the Facebooks, YouTube, Netflix there would be no internet and no line rental.
3. Its not fair that these guys can freeload their business model over the top. Not true. These guys do all pay to have access to the internet. They pay carriers/operators to connect large data pipes to their server farms. How is that not paying?

The truth is that carriers seem to be either blaming over the top players for not paying their way (when they set the fees in the first place) or they are trying to argue that they should get a share of the profits.

The first assertion is too ridiculously stupid to comment on as you can't blame someone else if you have screwed up your business model. The second is like saying that if you take your truck on a turnpike/toll road carrying goods for sale you should pay a toll and give up a share of your profits. Anyone in business knows that no company would ever accept these terms in a free competitive market and if it did occur then the market is functioning as a monopoly or a cartel.

Fortunately the market is working as this situation does not exist so Net Neutrality is working on the whole today. Once companies have to give up a percentage of revenue to cross the information superhighway it is not and regulators should move swiftly or see international competitiveness in the digital economy take a dive.

Tuesday, 2 November 2010

It's all about the services stupid!

While many mobile operators look down their noses at the respective 3 operations (part of Hutchison Whampoa) and feel smug about how few subscribers 3 have got, they should remember that out of great arrogance often springs underperformance and failure. I am not sure that this will be at the hands of the various 3 operations - in fact I would say that the odds are stacked against 3. What this shoal of minnows has done and is worth praise is notice that revenue can come from not just the minutes and Megabytes you charge for but also the services you help partners sell. 3 UK recently published that a large percentage of its data traffic was Facebook. Not only does 3 promote Facebook but also Skype and Messenger. While other operator are laughing at how 3 is losing revenue, I am reasonable sure that 3 is making a tidy revenue stream from working with these partners. After all, all these companies such as Skype make money from having these customers so it is logical to assume that 3 is getting a chunk of that revenue. Long term it is the companies such as 3 that see monetisation being not just towards customers but also service companies that will be the winners. The rest will die under the onslaught of Google or its successors. 

Monday, 1 November 2010

My blog manifesto

The communications industry helps shape the world we live in. It offers great hope such as allowing poor workers in remote countries/areas access to vital communications that can help stimulate their economy and improve their livelihood. It offers new ways to keep us entertained such as the web, video on demand and immersive virtual reality shows (although this may not always be positive). In the future it also offers the opportunity to change our lives in ways that have not been dreamed of yet.

Over the last two decades communications have changed beyond all recognition. This growth has unleashed untold wealth and some minnows have become giants such as Vodafone. However like all periods of growth, it has unleashed greed, promoted incompetents and stiffled innovation. In the cellular industry, today we have one trick ponies: the only sales propositions that are understood are coverage and tariffing - even here it is doubtful that many have understood what coverage means to customers. Today O2 in the UK "mulls the use of femtocells for LTE". Well guys here is a reality check - you need to fix 3G first! At the same time, many operators lack any imagination on what they could do to create new revenue streams. Google makes billions out of what people look for on the net, cellular operators get rid of it. Sensible?

So this blog aims to shine a spotlight on what is good and bad. It is not all about doom but also hope and how we could all do better!

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