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INDUSTRY INSIGHTII TM FT MS SE EW QoS 4G WIA MD EW MA 3G WF DJOwning the wholeinstant communicationstriumvirate –pipe, service,and customer –ensures greaterrevenues than beinga transmission agentcompeting on pricefor portal servicesIM’s attributes by integratingvoice services, expanding messagingacross all devices andcommunication networks, andopening the environment fornew features and customerfocusedservices.Owning the InstantCommunicationsCustomerWho will usher in this newworld of communication andbecome the focal point of thecommunications revolution?One possibility is that theInternet portals will lead thetransformation of IM towardInstant Communications byharnessing carriers as bit-pipeand dial tone providers. Theindustry has seen movement inthis direction to date, as severalcarriers have chosen to integrateportal instant messagingservices.While these partnershipsprovide little investment risk forthe carrier and large user accessibilitywith the established IMcommunities, this also limitsthe leveragability of the carriersand places them at a lowerposition in the revenue-generatingInstant Communicationsvalue chain. Furthermore, theportal retains ownership of thecustomer, so there is no switchingcost to the consumerbetween carriers. The portalsestablish customer loyalty andbecome the communicationsupplier, threatening the verycore of the carriers’ offering tothe end user.If the portal is the primarycommunication supplier, thecarrier is relegated to the role ofan exchangeable entity to theend user (consumer and business)– competing only onprice. For example, if an AOLIM (AIM) customer wants tohop between VoiceStream,AT&T Wireless, or VerizonWireless, there’s no impact onAOL, since they retain theirsubscriber, and the end users’communication community isportable.At risk is not only customerloyalty but also one of the mostvaluable assets for a carrier – itscustomer base. Without thisownership, the revenues associatedwith new services, entertainment,marketing promotions,and more will be forfeitedto the portals for all of theirservices. Additionally, it is thecustomer base that the leaguesof third-party developers covet.Carriers can, and should,own the Instant Communicationsmarket: the service, the customer,and the pipe. Carrierscan leverage their inherentstrengths in voice services:dependability, trust, service,quality, location information,and unrivaled access to theircustomers to become the centralizedcommunications suppliers.True, the portals currentlyhave a fragmented monopoly onInstant Messaging – but not onInstant Communications.Countless precedents illustratehow once-seeminglyinsurmountable market positionswere replaced by new,more valuable alternatives(turntables to CD players, rollerskates to roller blades, portableradios to the Walkman, hairdryersto blow-dryers). Already, theWireless Village consortium iscompleting the protocol, standardization,and open environmentthat will allow carriers toprovide unencumbered communicationto their hundredsof millions of customers – amuch larger customer base andcommunity than that found inthe portals’ walled gardens.Time, customer demand, orthe FCC will eventually bringdown the walls between the portalsthrough SIMPLE (SIP for IMin short) or Wireless Village. Ifthe carriers do not provide theirown Instant Communicationsalternative, end users will haveno choice but to remain loyalcustomers of the portals. Whilethere will always be a symbioticrelationship for contentbetween portals and carriers,customer ownership (loyaltyand the ability provide new revenuegenerating services) is atstake.Leveraging Strengthsin Turbulent TimesA convergence of factors –including communicationtrends, telco successes and failures,communication cannibalizationby the Web portals, thepost-boom economy, high debt,and the need for new revenuestreams – has presented amoment of truth for thetelecommunications industry.As carriers with dwindling capitalbudgets struggle to justifyexpenses for new endeavors,they need to ensure that thenew Instant Communicationsservices galvanize a core strategicpositioning, leveraging all oftheir current assets and buildingthe path for end users to theirnew infrastructure. By focusingon communications and buildingon their inherent advantages(voice, access, dependability,trust, etc.), carriers canbe the giants of InstantCommunications, creating therevenues that may help powerthem through turbulent times.Hopefully, tomorrow’s businessschool students will betaught how the telecommunicationsindustry, under duress,leveraged its inherent strengths,and in doing so, ushered in theevolutionary and revolutionaryinnovations of the early 21stcentury. The lessons wouldhighlight how carriers realizedthat in enabling and improvingcommunications, they own themost natural and powerfulgrowth engine.Owning the whole instantcommunications triumvirate –pipe, service, and customer –ensures greater revenues thanbeing a transmission agentcompeting on price for portalservices. The opportunity fortelcos is here; it is now up to thecarriers to determine how thecommunications revolutionunfolds and what their futurerole in shaping it will be.40 www.WBT2.com O C T O B E R 2 0 0 2Don’t Delay!SubscribeforFREE!at www.sys-con.comFREE E-NewslettersSIGN UP TODAY!Go to www.SYS-CON.comThe most innovative products, new releases, interviews,industry developments, and plenty of solid i-technologynews can be found in SYS-CON Media’s Industry Newsletters.Targeted to meet your professional needs, each e-mail isinformative, insightful, and to the point. They’re free, and yoursubscription is just a mouse-click away at www.sys-con.com.SELECT THE INDUSTRY NEWSLETTERS THAT MATCH YOUR NEEDS!CHOOSE ONE – OR TRY THEM ALL!Exclusively from the World’s Leading i-Technology Publisher