Telecom Is Bumpy

Back in 2005, Thomas L. Friedman wrote The World Is Flat: A Brief History of the Twenty-first Century an interesting history of our recent past. We read it with great interest and imagined what it might mean to the world of telecom. The book was a bit of a wake up call to many industries and we recommended it to many of our colleagues. A world without barriers to business had a very compelling ring to it.

The nut

Friedman’s principle points in the book were based upon his observations that sometime in the 1990’s three things were converging rapidly and globally;

  1. The world has become a flat market place,
  2. The means of communication and production became globally available and economical to use, and
  3. about three billion more people were made available to the global market.

These factors caused many businesses to reconsider their vertical structure and consider if not restructure to a more horizontal alignment.

Who’s doing it?

Interestingly enough, the world has become flat for some players in the telecoms industry, but for the most part it has not. Telecom it seems is a rather bumpy domain with significant obstacles to spreading yourself globally. Some companies such as telecom suppliers have certainly moved into the global marketplace to take advantage of the flatness that they can get to. Providers, on the other hand, have generally just stuck with the knitting, though some recent providers such as Skype have broken the mould from the perspective of business model but have lagged behind in tiny details of making money.

It would appear that there are boundary conditions to telecom that make this transition difficult such as;

  • Regulatory constraints,
  • Difficult and complex trade rules,
  • Product standards,
  • Language difficulties,and
  • In-country partnering hurdles,

To name a few.

What to do?

In a recent article at Telephony Online Augusto Morais, a Principal at A.T. Kearney, has summarized his views of why telecom has not succeeded yet in this flatland. His analysis is thoughtful, informed and well summarized and well worth a read from anyone involved with the global expansion of a business or service offering.

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