Telcos Realizing Markets Don't Just Grow Forever
from the maturing-markets dept
It's always interesting to see stories worrying about high growth markets maturing. When a market is growing rapidly, there are always those who believe they'll grow forever. But markets mature and run out of growth potential. The telco industry is now coming to terms with that, as 80% of Americans have mobile phones, and 79% of homes with computers have broadband access. At that point, it's no surprise that telcos might not have the same growth opportunities as before, and might start scrambling to try to find new avenues for growth. That's why you see both Verizon and AT&T pushing into the television market, while poking around in some other areas as well. It's also why Sprint needs to kiss and make up with Clearwire, and get a nationwide WiMax system up and running. Also, start expecting to see attempts to create more innovative uses of the telecom systems already in place, such as non-phone equipment making use of mobile networks (the Kindle was just the beginning). Either way, the scramble is now on for telcos who are used to growing at a certain pace to start aggressively seeking new avenues for growth. While that's happening, don't be surprised to see more aggressive attempts to poach customers from each other as well. That's going to be good for customers, as it's likely to force the various telcos to become more open as a way of attracting more customers by doing more than just dropping prices. No matter what happens, the telco industry recognizes that it needs to change and change quickly if it wants to keep up some form of growth.Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
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Filed Under: competition, growth, mature markets, telcos
Companies: at&t, sprint, verizon
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Losses
http://www.techbanyan.com/archives/146
How does that factor into all this.
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It's not about aquiring new markets
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Can We Go Back to the Year I Made Money From Long
Can we do that again?
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Re: Can We Go Back to the Year I Made Money From L
The telcos were simply trying to buy customers. It was due to lack of differentiation. Once one carrier started it, all the others had to follow giving away $25, then $50, then $100 and so on.
It was odd working there at the time seeing people with long distance bills the same as mine with multiple "checks" that added up to more than I made. It was obvious it could not last.
At least long distance now is unlimited. Yours is now right? Right?
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Telcos growth = consumers getting screwed
Verizon's growth has exploded over the last 5 years, to say the least. The first thing Verizon did was to drop a very respectable family plan ($39.99/mo + $5 for each phone) and raised its base rate to $69.99.
The moment these telcos start expanding into other arenas is doom for consumers. These companies won't be innovative as much as restrictive. After all, when was the last time a Sprint customer could use Verizon's features, and vice versa.
Have you ever thought to yourself, "Gee, I wish my service provider did this."? If so, then you'll see where the future of telco "growth" will lead.
Proprietary. DRM encoded for use on 1 device. Over priced.
But hey, isn't that what capitalism's all about?
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Okay, here's something I don't get
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Re: Okay, here's something I don't get
In my area (which you can call the boondocks) the only cell phone carrier is US Cellular. Due to the lock they have in my area (and others like it) they don't have to worry about expanding into areas where there would be *gasp* competition. Cell phones now have become a very popluar want and in many cases an actual need so if you are literally the only game in town why bother going to another town where you would have to actually work to draw in customers? Look at broadband internet penetration and you'll see the same thing.
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Obligatory Simpsons Quote
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Don't think it's just Telco's
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Do you know how long Verizon has been working on laying fiber? Do you think that happens on a dime? You think they just woke up and said "hey, lets spend $24 billion tomorrow?"
Technology really isn't the issue, business plans really are not the issue. Usually, executives know what needs to be done, but quite a few large companies just can't do what they need to do because they can't get their people to buy into the plan. People are always always always the biggest challenge.
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Opportuinites
It occured to me that there are many other applications that the cellular networks could easily be tweaked to pass updated data to all sorts of things. Instead of looking at their network as person to person communications, why not add the machine to machine element? I was driving by a bus station and saw the old outdated bus schedule and was thinking to myself, why not use the cellular coverage network to update the bus schedule for passengers in real time? This may not be the best example, but the point is these networks can be tweaked to deliver all sorts of real time messages and other data.
Opportunities like this exist all over the place, this was just my first thought, I'd say imagination is the only limitation on this one.
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Re: Opportuinites
The first one is the cost of sending data out via the cellular networks. North American telcos want a large chunk of money for that, you know. And then there's the fact that each cellular network has different transmission protocols which drive customers crazy so they just don't.
We won't see uses like you suggest until the telcos in North America are forces to switch to GSM as Europe and the rest of the world already have and transferring from one service provider to another is made both easier and transparent.
Oh yes, and far more secure than it is now.
ttfn
John
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Endemic Industry Wide Problem
Companies, as they reach marketing limits, should adjust their business model to recognize that their core products are in "maintenance mode" rather than a growth mode. Maybe all those little irritating bugs (err features) would finally get fixed. Unfortunately, the mantra of all these companies is growth, growth, growth, ever more growth.
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On Wall Street, if you are not growing, you are dying.
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Even Growth Can Cause Death
Unfortunately "On Wall Street, if you are not growing, you are dying." is quite true. Admittedly, if you grow your company to match the market and you are in "maintenance" mode, you will have a smaller company. It's unfortunate that this is considered "bad" and Un-American.
One example of what is wrong, with the growth at any cost mentality, is the proposed acquisition of Yahoo by Microsoft. Acquiring Yahoo will not solve Microsoft's problems with its core product lines. In fact it will be a "detractor" since the management focus and corporate resources will now be devoted to "integration". (Of course, there is nothing conceptually wrong with a corporation re-envisioning itself.)
Time will tell, but this acquisition may be a repeat of the failed Time-Warner/AOL merger.
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Here's an idea
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Mergers typically are not done from a position of strength. Where is Microsoft going? Where is Yahoo going? Both are facing tough times.
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Telcos consumer friendly Airmaxed working on free
Kobe Wadsworth Airmaxed
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