I was thinking the other day how little I now use my phone for day-to-day communications, and then started to think, why is that?
To start with operators have been rather unsuccessful with their communication VAS (Value Added Services) – most people call them communication apps these days. There are hundreds of them, for example missed call alert, missed call completion, do not disturb, call screening, voice control, transcription, visual voice mail, out of office indicator, sponsored calls / services, rented number, anti-SPAM, find-me follow-me, call back when free, etc..
Operators could have such a powerful communications platform. Yet I’m increasingly not using them for communications. I’m not really made aware of the VAS my carrier provides, and even when I do become aware I have to pay before I can even see if the VAS makes sense for me. I’m paying over $100 a month to my operator, that should entitle me to at least some freebie trial services.
An operator’s network should be the easiest and most successful way to communicate. Yet we’re still expected to use weird codes such as “#784*2*3.” That’s a 30 year old user interface and a bad one at that. Operators must stop listening to the “dysfunctional” guidance of investment analysts (look what they did to the economy) and start focusing on being good at the core service customers are paying for: communications.
Operators are also moving into other areas such as IPTV just as the ‘customer math’ is changing on whether subscription TV makes sense. Taking a US-centric scenario of a viewer that likes movies and TV shows and isn’t that bothered about sports. I’ve already ranted about my frustration in paying ESPN in the basic service fee when I never watch those channels. The cost of a premium cable or satellite service (ignoring bundling) is about $1200 per year.
The cost to replace subscription TV with an OTT (Over The Top) solution is: Hulu+ at $120 per year, Netflix on Demand at $120, Amazon VoD at $760 (one show per week night in HD, $2:99) and assuming the cost of box (TiVo, PS3, Wii, Xbox, DVR or your HDTV) is already there the total is about $1000 per year.
So the cost of laziness is about $200 at the moment; and note some of the content owners (the puppet masters in the TV ecosystem) are seeing a bigger share of the customer revenue in the OTT model. Of course bundling impacts the analysis as well as the type of content people want to watch, so the math is not clear-cut. However, its enough for at least 10 families I know to cut the subscription cord and move online and in doing so find the experience more enjoyable – I was surprised.
So in the midst of all the worrying about Google, trying to make advertising work, marketing OTT (Over The Top) suppliers’ phones and app stores, building developer communities, investing in LTE when HSPA is good enough, and investing in IPTV and the re-investing in a OTT model (see Telecom Italia’s CuboVision.) Operators should not miss the point, their core service that customers pay for is communications and they’re simply not making it better.