Gregor Cuzak

on marketing, business and philosophy



Telecoms are one trick ponies. Just like most other companies.

Ad agencies do ads. Shoemakers do shoes. Cowboys do cows. And telecoms do subscriber lines (be it copper, coax or optics).

What telecoms don’t do is everything else. They don’t develop anything really well. They don’t market really well. They don’t do customer service really well. They don’t develop great products.

Telecoms natural tendency is to become a monopoly. Just like any pther business. If I sell shampoo I want to convince you that my shampoo is the only shampoo good enough for your hair. My problem is that your switching cost is so low, that you switch often. However, as long as you’re with me, I have a monopoly with you.

Telecoms monopoly game is easier, or used to be. Sometimes when lines were scarce, all that you needed to be in the game was a government lease. Hell, in most cases governments established their own telecoms to lay lines.

When lines were laid, there came new technologies. Copper wire was upgraded to “better” copper wire, cable was good for TV, optics seemed to be it for data, yet its cost still enabled all others to solve the last mile problem. Not to mention mobile, itself a wireless last mile by definition.

However with all these technologies in place telecoms started losing their character. The real telecoms went on to integrate networks, develop regional, continental and finally global wiring solutions. All others were left to what was left to them, or stop being telecoms. Most chose former, which meant that they decided to hang on to the monopoly games that they learned in their formative years. Even newcomers wanted to play the monopoly game. If someone could not be the sole player in a country, a city could still do. If someone could not be the sole player in a city, a neighbourhood cood still do.

When the fragmentation of territories became to big, the game turned to where it still is today. Telecoms, without exception, play their own regulatory monopoly games, ad infinitum. Not just that they keep on having long long tentacles within any governments or regulatory bodies, they are like that themselves. Their internal organisations resemble their environments. These are very complex organisms wherein hierarchical power strugles are far more important than any market achievements.

This means that telecoms force their best people to their marginal units. The best innovation in telecoms never happens in the centre, especially not where their management focuses. Innovation occurs in obscure and remote units without any real power.

This strange end-result is not unnatural though. Squashing of good market ideas helps keep monopolies in place. Market savvy ideas are very dangerous to stability, hence destructive, hence negative.

Let me rephrase. It is not necessarily positive to seek growth. Growth in closed markets means someone else will die. This may be very bad, as it may just be that the growth did not come through better offer. It could be that it came through even more abuse. In closed markets wherein abuse through monopoly keeps everyone in a status quo, a status quo might just be the best solution with least injuries to all involved.

Something else happens if such a closed market opens up. Most often such openning comes through territorial expansion. Such expansion is a sort of collonialism. Just like nations with more firepower overrid nations with less, so telecoms from very demanding markets can expand quickly in markets of lesser intensity.

Slovenia, again, has an edge also with telecoms. Not just that Slovenian telecoms managed to put Slovenia in worldwide #1 spot in IPv6 deployment, they are also leading in FTTH, leading in billing, leading in XaaS. Leading in practically everything not related in economies of scale but rather economies of smartness.

If only telecoms in this country would learn that they are so far ahead and would start serious effors of expansion. But not through mergers or acquisitions. That’s silly considering the game of monopolies mentioned above. The only way to expand is through smartness. Knowhow, when packaged properly, travels very fast.

Go out, learn what knowhow is sellable, and then sell. And move fast. And yet, how could telecoms, as descibed above do this? It would take a small miracle to move ahead. And yet, I am sure it can be done.

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